The cost of college attendance has increased over the years according to a CNBC article, and this increase may indicate the potential need for financial assistance. According to Forbes, approximately 57% of students from “private nonprofit four-year institutions took on education debt.”. In another Forbes piece, it indicated that the average amount borrowed is over $28,000. Between the years 2020 and 2021, interest rates for student loans were at 2.750% according to an article on Saving For College. In just one year, that percentage has risen to between 5.5% and 8.05% depending on the status of the student – undergraduate or graduate. This percentage is the highest it has been in a decade.
To give some perspective, Forbes notes that just a half point increase in the interest on a $30,000 loan can be about $3,000. During a recent Federal Reserve meeting, it was determined that 5.25% would only be a benchmark, meaning it is only the minimum percentage they will set according to the source. This leaves many borrowers nervous that rates will continue to skyrocket in the coming years, making repayment even more stressful. Additionally, the source describes that interest rate numbers on federal loans have fixed interest rates.
Another article indicates that more highschool graduates are looking to go to trade school. According to James Rhyu, CEO of Stride Inc., Tech Elevator’s parent company, “…skills necessary for much of the workforce are not going to be predicated on a 4-year degree.” Even some large companies like Apple, Bank of America, Google and IBM have stopped requiring college degrees.
Recent studies noted on CNBC found that high school students are becoming less likely to go to a 4-year college or university. In less than a year, the number went from 53% to 20% with the biggest reason being affordability of both tuition and student loans. A survey from Gallup and the Walton family foundation found that more than 80% of their participants said they believe college is important, but only 60% of them plan to actually go to college.
With the cost of continuing education becoming arguably less attainable, the silver lining is that there are options! Looking for grants and scholarships is a potential optin. There are also non-profits and education sponsors to help sponsor a student’s education potentially.
By: Mel Laureano, Contributing Writer
Graphic by Shae-Lynn Henderson, EIC