Ameritech Financial: The Student Loan Crisis Signals More Than Problems Within the Educational System
ROHNERT PARK, Calif., October 29, 2018 (Newswire.com) - The student loan crisis is larger than the educational system; it’s also one of structural racism and economic disparity according to a new report from Generation Progress. In looking at student loan debt on a national level, there were clear regional differences, even between neighborhoods within the same city. Marshall Steinbaum, one of the research directors who worked on the report, believes this is due to the racial and income segregation within cities, as well as the increase in credentialization. Ameritech Financial, a document preparation company, assists student loan borrowers to apply for income-driven repayment plans (IDRs) which may be of particular assistance to borrowers located in areas of greater social and economic inequality.
“There’s a national narrative that college is an investment in your future and loans are part of that investment,” said Tom Knickerbocker, executive vice president of Ameritech Financial. “If you don’t have much money to begin with, loans can just compound financial issues.”
There's a national narrative that college is an investment in your future and loans are part of that investment.
Tom Knickerbocker, Executive Vice President of Ameritech Financial
For people who grew up in more economically challenged and racially segregated areas, the cost of college is far more burdensome than for those in more economically stable regions. Going to college to achieve upward mobility is appealing, but according to data, difficult to achieve. One 2016 study found that white students were more likely to be from a higher socioeconomic background and have more family financial support to pay off their education costs. Non-white students, however, were more likely to be from a lower socioeconomic status and have less family financial support, making it more difficult to afford college or get help in paying off debt. The study also found that black students, in particular, owed $7,400 more on average for their loans versus white students, but over the period of a few years, the gap grew to $25,000 more on average due to differences in interest accrual and graduate school borrowing. Even accounting for family wealth, there was still a significant gap.
Steinbaum attributes the geographic disparities noted in the Generation Progress report in part to credentialization, which is when jobs that previously didn’t require a college degree now require one. Credentialization has been on the rise for years, and many jobs that used to require a high school diploma are now looking for candidates who have a bachelor’s degree. Consequently, those who live in lower-socioeconomic neighborhoods with lower-performing job markets end up with a higher debt burden. This also creates a domino effect for student loan borrowers, who are more likely to delay many adult milestones such as marriage or buying a house. IDRs may provide relief to borrowers who feel like they have to put life on hold or are struggling to make ends meet. By taking into account a borrower’s discretionary monthly income and family size, monthly payments can be reduced to a more manageable amount and potentially end in forgiveness in 20-25 years.
“Getting a college education should be an option for everyone who wants one, period,” said Knickerbocker. “IDRs can help those who were struggling financially before their loans to better ensure that they don’t have to continue struggling after graduation.”
About Ameritech Financial
Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of consumers with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.
Each Ameritech Financial telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).
Ameritech Financial prides itself on its exceptional customer service.
Contact
To learn more about Ameritech Financial, please contact:
Ameritech Financial
5789 State Farm Drive #265
Rohnert Park, CA 94928
1-800-792-8621
media@ameritechfinancial.com
Source: Ameritech Financial
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