The student news site of Carlmont High School in Belmont, California.

Scot Scoop News

The student news site of Carlmont High School in Belmont, California.

Scot Scoop News

The student news site of Carlmont High School in Belmont, California.

Scot Scoop News

Editorial: Graduating seniors must confront soaring student debt with caution

Urvi Kulkarni
Roughly 43 million Americans have outstanding student loan debt, according to census data. It’s important for current seniors to exercise caution before taking out hefty student loans.

For many graduating high school seniors, the step into higher education is coupled with one of the most crucial financial decisions they will ever make. With attending a four-year university being a target for most students, the daunting possibility of student debt sometimes takes a sideline to the high aspirations that come with a college degree.

The sum of outstanding student loan debt now stands at a staggering $1.73 trillion, according to an Enterval Analytics student loan report, and serves as a representation of the struggle of repaying student loans. According to Federal Student Aid, 43 million Americans have outstanding federal student loan debt, which is about 13% of the population.

Annual federal student loan interest rates set by Congress make it difficult for borrowers to fully repay their loans within the recommended 10-year timeframe set by the United States Department of Education. Interest rates can significantly amplify the total amount owed over time, and graduates can consequently find themselves paying off interest more than the principal amount they borrowed. In fact, the average borrower takes 20 years to pay off their loans, according to the Education Data Initiative.

Of course, it is difficult for graduating seniors to navigate career and financial situations when having to balance the benefits of a college education with the downside of taking on debt early in their adult life, which is why financial literacy is so vital in these moments.

Before taking out a loan, students should create a clear repayment plan, which involves understanding future earnings, living expenses, and the total cost of the loan with interest. They should compare different loan types and repayment options, like income-driven plans or forgiveness programs, to find the best fit.

However, if affording a four-year school is unrealistic, community college, trade school, and professional certificate programs are otherwise great options that minimize the cost spent on post-secondary institutions while still providing valuable education and skills.

Financial literacy, then, becomes a necessary framework for students to understand the economic implications of higher education. It allows students to recognize what they are investing in their education compared to potential earnings, leading to an informed decision that not only aligns with their career goals but also their financial reality.

Later, it becomes easier to budget a repayment plan when it is treated as a fixed expense, and a general framework for paying it off has been present since taking on the initial loan. This also opens up room for paying more than the minimum monthly payment, which reduces the loan quicker and saves on interest.

Facing the prospect of student debt in likely the first year of adulthood is difficult, however, making a financially-driven decision will greatly help in minimizing post-college debt while also building a strong foundation for any future financial decisions. Whether this financial knowledge is built through a personal finance class or spending time researching online, it will surely be a valuable investment in anyone’s economic future.

*This editorial reflects the views of the Scot Scoop Editorial Board and was written by Alexander Menchtchikov.

The Editorial Board voted 14 in agreement, 1 somewhat in agreement, and 1 refrained from voting.

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About the Contributors
Editorial Staff
The Scot Scoop Editorial Staff strives to maintain reliable reporting while covering the hard-hitting topics that interest our community. Content on Scot Scoop is managed, reviewed, and maintained by the editorial staff using various tools and methods to produce, edit, and publish content daily. Editorial Staff members are Gabrielle Shore, Myles HuErik ChengAnnabel ChiaAimee TeyssierUrvi KulkarniEvan LeongUjala ChauhanCharlotte GordonAlexander MenchtchikovBen RomanowskyJackson SneeringerArianna ZhuEmma GoldmanElizabeth CruzAudrey Finigan, Rachel Alcazar, and Alessandra Tremulis.
Urvi Kulkarni, Scot Scoop Cartoons Managing Editor
Urvi Kulkarni is the Cartoon Managing Editor for Scot Scoop who finds an interest in local climate stories and visual arts. When she is not editing, cartooning, or writing, you can find her on the courts playing for the varsity tennis team, working on a painting, or spending time with her friends. Check out her portfolio here.

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