Student loan debt was a problem long before Occupy Wall Street protesters added it to their list of grievances. The recession hit the younger end of the workforce particularly hard: the combination of a jobless recovery, rising tuition bills and mounting debt have become a crushing burden. Total student debt today is approaching one trillion dollars — exceeding the balance due on credit cards — and is second only to mortgage debt in American households. In fact, it's the only class of debt in which defaults are increasing. Given the state of the economy, much of this debt will never be repaid. It will remain an albatross weighing down an entire generation.
It's time to look ahead to a new paradigm, in which student loans are not the only answer. Let's consider the power of savings. Currently, we know scores of students never make it to college because they perceive it as financially out of reach. Others bail when they realize the debt burden will be too high. The cost proportionality of getting an education compared to the amount of borrowing necessary to finance it is way out of line. Students need a way to finance college without compromising their future financial well-being. Beyond efforts to limit tuition growth and create affordable educational options, there are significant advantages for placing a greater emphasis on savings.
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