livesafely.

Our economic system is inherently designed to create wealth for lenders by creating consumer debt. Problem is, that personal debts are at record levels, so much so that most of us will spend the rest of our lives being enslaved by it. Fresh out of high school, young adults are being solicited credit cards as if they were “free money”. Fact is, that with wages that have been stagnant for decades, people have been going into credit card debt to top up wages, just to keep up with the rising cost of living. In our over-credentialized society, we basically need a university degree to qualify for jobs that we could have gotten decades ago with merely a high school diploma. So, the problem is that people are faced with either working for minimum wages or going into debt to obtain a degree, just to have a middle class standard of living. University and college is set purposefully set up to be the only escape from a life of poverty. Unless young people are lucky enough to have affluent parents, getting student loans is the only path to getting the education they need. Student loan debt is effectively taking away the buying power of a whole generation.

Getting a university degree is the minimum necessity for entry into middle class life today, but the security that once came with that status is long gone. According to one study, the “Generation X” (of which I am one), now 25 to 40 years old, work almost three hours more per week than young baby boomers did way back in 1977. And all of those extra work hours aren’t adding up to enough additional earnings to cover the liability of student loan debts. Compared to 1980, the median earnings for a young worker 25 to 34 yrs old with a bachelor’s degree or higher were only 6.6 percent higher in 2004. During the same time period, student loan debt has more than doubled!

There are many things one can do to deal with student loan debt, such as typical debt strategies, like building a “debt snowball”. However it is an option that is difficult for those just starting out in a new profession as they may not have the earnings one needs to do this. Fortunately, there are other options, such as Federal student loan consolidation, loan reduction programs, consumer proposals and bankruptcy. We can look at some possible angles to help you deal with student loan debt, first in the USA, and then in Canada. The best plan is Federal student loan consolidation.