There is a growing crisis in our country and it impacts the next generation of our best and brightest talent who will be responsible for the economy as baby-boomers turn over the reins . The crisis surrounds the crushing student debt that today totals $1.5 trillion, affecting over 45 million borrowers who had an average outstanding loan balance of approximately $37,000. The default rate for student loans is over 12% and growing.
The negative impact of this situation has yet to be measured, but it is safe to say that it will manifest itself among families who are trying to establish households, and in the workplace where the stress of debt will impact performance. Some employers are beginning to respond with repayment assistance, according to the MotleyFool.com. They report that 23% of employers are considering programs to help struggling employees with some form of assistance. These programs could make a business more attractive to new recruits while alleviating a major source of stress to help workers better concentrate on their jobs.
On the political front, the politicians angling to become president are all proposing bonanzas for the repayment of student debt by the federal government, of course to be paid for a yet another tax on the “rich”. Our educational system is a shambles, and the student debt situation is only one manifestation. Both sides of the aisle better start focusing on addressing the situation across the spectrum from pre-school through undergraduate programs and technical schools. Alas, I’m not optimistic.