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Student loan dilemma

It’s not been an easy year for any of the world’s economies.  The housing market crumbled and took down banks and brokerages left and right, destroyed the American auto industry, which was once regarded too big to fail, and sapped the U.S. economy alone for over $1 trillion in stimulus money attempting to slow the free fall and break us out from the worst economic situation we’ve had in most of our lifetimes.

Unemployment has shot up, with the national average nearing 10 percent, while some metropolitan areas, such as El Centro, Calif., are looking at upwards of 26.9 percent unemployment.  

Jobs are hard to come by, and to make matters worse, jobs that pay enough to make ends meet are even more scarce.

There is, however, one group of people that the media keeps claiming are the beneficiaries of the moment: college students.  Student loans, scholarships, grants and cheap living make lives for these individuals easier, according to the news outlets and general consensus.  

I beg to differ on the matter.

Student loans, as Obama has promised, are supposed to be easier to obtain and more readily available.  With students jumping through enough hoops, money becomes more available and should help.  Unfortunately for students that don’t live off of their parents, what Obama would have us believe is quite the opposite of the truth.

You may say Obama is opening up more grants and scholarships for those who put in community service hours.  Tell that to the struggling med school/chiropractic/physical therapy student who virtually cannot have a job or volunteer hours outside of internships in clinics and hospitals that are required for graduation, on top of attending school and performing the necessary studying to pass the courses.

Banks still don’t have the money to loan, as was demonstrated when Citigroup was dropped from the Dow at the start of June.  Credit cards are seeing higher interest rates and lower spending limits, and the benefits on cards are diminishing.  The housing market is still stale, and those with money are still hoarding it.  Banks are reluctant to shell out any money, even small amounts in comparison to what they’ve received in stimulus.

The catch 22 of student loans is a frustrating issue.  Students go to banks for money when their income alone is not enough to pay for the cost of education, even with grants and scholarships.  The banks, in turn, require students meet a certain income in order to qualify for loans.  Students wouldn’t need to turn to the banks for money if they were making as much as is required to secure a loan, strictly limiting the number of people that even qualify for financial aid from these institutions.

Students that have relied on credit cards meet another problem outside of the income issue.  Having too much credit will negatively affect your ability to gain a loan because you’re capacity for debt is so great.  Having a credit card with a long history of payment is not beneficial, and on the contrary, it will also negatively impact your attempts at securing a loan.  What we have all been lead to believe as positive things for building credit have turned into our financial Achilles’s Heel.

Its a sad situation when the high school dropout can work at McDonald’s and make enough to pay rent, but the college student looking to better him or herself can’t find the money to eat.