Formal Outline for a presentation
Face the problem: students may need the student loans
What type of student loans available, and how much you can borrow?
Federal loans are borrowed funds you must repay, along with the interest that accrues. A federal loan allows you and your parents to borrow money to help pay for college through federal government programs.
Student Loan Debt Statistics
How many Americans borrow and have borrowed loans for college?
According to Student Loan Debt Statistics, Nearly 20 million Americans attend college each year. And in that 20 million Americans, close to 12 million – or 60% – borrow annually to help cover costs. Besides that, there are approximately 37 million student loan borrowers with outstanding student loans today.
How much Americans borrow and have borrowed loans for college?
There is roughly somewhere between $902 billion and $1 trillion in total outstanding student loan debt in the United States today. And roughly $864 billion is outstanding federal student loan debt while the remaining $150 billion is in private student loans.
How many student loan borrowers struggle with repayment?
Of the 37 million borrowers who have outstanding student loan balances, 14%, or about 5.4 million borrowers, have at least one past due student loan account.
Only about 37 percent of federal student loan borrowers between 2004 and 2009 managed to make timely payments without postponing payments or becoming delinquent.
For every student loan borrower who defaults, at least two more borrowers become delinquent without default. Two out of five student loan borrowers – or 41%- are delinquent at some point in the first five years after entering repayment.
Students who drop out of college before earning a degree often struggle most with student loans
Why do they struggle?
48% of 25-34 year-olds say they’re unemployed or under-employed.
52% describe their financial situation as just fair.
70% say it has become harder to make ends meet over the past four years.
42% of those under 35 have more than $5000 in personal debt that does not include a mortgage.
Student loans account for the most common form of increasing debt among ages 18-24 (54% have seen increased school loan debt) while those in the older group attribute increased debt equally to school loans (37%) and credit cards (37%)
How is student debt impacting borrowers – and the U.S. economy?
A college degree does increase an individual’s potential for earnings:
• In 2010, people ages 25 to 34 with bachelor’s degrees earned 114 percent more than did those without high-school diplomas.
• College graduates earned 50 percent more than did young adults who completed only high school, and 22 percent more than did those with associate degrees.
• The median income for young adults with a bachelor’s degree was $45,000, and with an associate degree, $37,000
But student debt can also negatively impact an individual’s ability to take on other consumer debt – and therefore place a drag on the national economy:
• In 2011, first-time home buyers, with a median age of 31, fell to the smallest percentage of total home purchasers since 2006.
How to manage default?
Most federal loans enter default when payments are more than 270 days past due. Other loan types may default earlier.
Having a loan default can seem scary, especially considering the consequences. Realizing how you reached this point is important—as is knowing what you can do now to manage the situation.
• Take advantage of your options. Whether you pay your loan in full, rehabilitate it, or consolidate it, you can recover from default.
• Take a look at your circumstances. Think your loan defaulted by mistake or due to something out of your control? Find out about loan discharge.
• Take note of how you got here. See how loans reach default status—and how that impacts your loan balance—with our interactive timeline.
Government Profits from student loans
According to USA Today, the federal government made enough money from student loans over the last year that, if it wanted, it could provide maximum-level Pell Grants of $5,645 to 7.3 million college students.
The $41.3 billion profit for the 2013 fiscal year is down $3.6 billion from the previous year but it’s a higher profit level than all but two companies in the world: Exxon Mobil cleared $44.9 billion in 2012, and Apple cleared $41.7 billion.
Bad news for student who may get student loans because loan rates expected to rise: This summer, Congress passed a law tying interest rates on loans to the market. The law set rates for all the loans at different levels, but based them all on the 10-year U.S. Treasury rate and allowed rates to change each year.
For Stafford loans, both the subsidized and unsubsidized, the interest rate is the Treasury rate plus 2.05%, with a cap of 8.25%. Graduate student loan rates are the Treasury rate plus 3.6%, with a cap of 9.5%, and the parent loans are the Treasury rate, plus 4.6%, with a cap of 10.5%
Lanza, Allesandra. “Student Loan Debt Statistics.” American Student Assistance. American Student Assistance, n.d. Web. 26 May 2014.
Net, Inc., and Education Loan. 2013–2014 Federal Student Loan Programs(n.d.): n. pag. Nelnet.com. Nelnet Education Loan Servicing. Web. 28 May 2014.
Press, David Jesse Detroit Free. “Government Books $41.3 Billion in Student Loan Profits.” USA Today. Gannett, 25 Nov. 2013. Web. 28 May 2014.