In today’s job market, a college degree is the new high school diploma. However, the cost of higher education remains the responsibility of students. It’s difficult for people of any age to predict where they, or the economy, will be in 10 or 20 years. Despite this short-term, highly fluid job market, students commit to loans that take up to 25 years to pay off, if paid at all.
The result is what former Consumer Financial Protection Bureau student loan ombudsman Seth Frotman called a “trillion-dollar black hole in our financial market.” He recently testified before Congress about the extent of the situation and advocated for action to correct it. Statistics back up his premonition and urgency. Student loan debt sits at $1.4 trillion, and nearly 40% of borrowers are expected to be in default by 2023, according to The Brookings Institution.