A report by ABNdigital says that SA could be heading for a major fall as student debt continues to spiral out of control. This crisis could potentially cause greater damage than the recession of 2008 yet there is no end in sight to the financial commitments made by a desperate and unknowing student population.
The message to young people is that their hope, opportunity, future depends on a higher education, and some have bought into the idea that they need to get that education at any cost.
Student loans were initially marketed as the ideal medium to obtaining a quality education which would no doubt lead to a high paying job.
What is not made clear however is that the principle of a student loan consists in sacrificing your future solvency with no guarantee that you would be able to buy it back.
This situation has been exacerbated by the global unemployment crisis and high dropout rates, and as result what was meant to be a short term loan is turning into long term debt.
According to HESA (Higher Education South Africa) students owed universities R2.8 billion in January 2010.
Have we let our youth down by introducing the concept of student loans? Have we encouraged them to give away the only thing they had left to barter – peace of mind, freedom from binding contracts, and a debt-free future?
More importantly are student loans still a viable option when unemployment is at an all time high??
For more insights on the student loan bubble read