In a new statement released by FastWeb.com, a website dedicated to helping eligible students find financial aid and scholarships, American student debt totaled 830 billion as of June 2010. For the first time in history, this is a number that actually surpasses the total American's owe in credit card debt. These findings are causing some serious concerns when it comes to the financial future of current students, their credit, and for the economy in general.
In response to these concerns, The Department of Education has released new regulation in an attempt to help protect students in the future. These regulations will apply to for-profit, nonprofit, as well as public institutions. The regulations seek to make improvements in three main areas including improving the quality of degrees, defining "gainful employment" standards for universities, and conserving tax payer and student dollars.
According to a new press release by the U.S. Department of Education, the new rules and regulations were set in 14 different areas. They aim to certify program integrity and ensure that students can use their degrees after graduation. For-Profit institutions are now required to disclose accurate job placement records and graduation statistics to students. Another initiative aims to protect tax payers by ensuring that students use any federal aid dollars in degree programs that actually offer them a shot in the workforce, instead of wasting time and federal dollars.
Some are skeptical about the new regulations, claiming they won't do enough to alleviate students' woes. While the costs of college educations are continually on the rise and salaries and employment are down, students are likely to continue to amass large debts as they try their best to gain what is necessary to have a shot at becoming a permanent part of the workforce. To make matters worse, those who were lucky enough to have college funds set aside may have seen a decrease in account value when the recession hit.
According to earlier reports, in addition to amassing student loan debt, students themselves are also funding things such as food, textbooks, and housing costs on credit cards to pick up where student loans leave off. With more and more young Americans starting out in debt, their credit could be at risk.
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Matt
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