The ‘American Nightmare’.

A recent story published in Forbes online, “The American Nightmare: Student Debt Will Be A Long-term Drag On The Economy”, examines how student debt burdens in the US have skyrocketed in recent years, causing many to default on their loans and contributing to the stagnation of the economy.  Universities in the U.S. have for many years charged students tuition fees, and the total cost of studying at a U.S. institution (tuition plus food/housing/other fees) can range anywhere from $15,000 to $60,000 per year, depending on the institution (public or private, in-state or out-of-state).

Many American students take out hefty student loans to pay for their education (me included).  Getting a university degree is seen as an investment, and students are resigned to the fact that if they want to go to university (and their parents can’t pay for it all) they will have to take out student loans.  At the time, you (as a student) don’t really think about paying it back – how long it will take, how much of your monthly salary it will eat up, what will you do if you can’t afford your bills.  Reality hits six months after graduation when you get that first invoice in the post from the student loan company. 

As of next September when UK universities will be charging higher tuition fees, British students will be going the way of their American counterparts and taking on student loans at amounts previously unheard of here.  And it seems that UK students’ attitude is already matching the Americans’.  “It’s going to happen so why worry about it? I want to get a degree and I won’t let that stand in the way.” says a student quoted in The Guardian when asked about the rise in tuition fees.  So, will the American Nightmare drift across the Atlantic to scare us all?

Maybe.  It’s really too early to say.  There are a number of differences between the way American student loans are issued and repaid and the way British ones are dealt with.  But still, debt is debt, and with the economic forecast as gloomy as ever, students everywhere (and their parents) will be carefully considering what is worth paying for.