Bad news, college students: Congress failed to stop government-funded student loan rates from doubling over the weekend from 3.4 percent to 6.8 percent.
The issue isn't settled yet; Senate Democrats are pushing for a vote on July 10 to retroactively bring the rate back down. Republicans favor tying student loan rates to the markets instead of setting a federal lending rate. As it stands now, college students can expect to pay an additional $2,600 on their loans.
For those in school, the rate increase is just another part of what is turning out to be an increasingly bleak financial future. Here is what college students have to look forward to after they graduate.
1. Staggering student loan debt
Even before the rate increase, Americans were burdened by nearly $1 trillion in outstanding student loan debt. Around 38.8 million people owe an average of $24,803 for pursuing a college degree.
Why are students taking out such big loans? Because it's more expensive than ever to go to college. Board and tuition costs jumped 42 percent at public universities over the last decade, with private schools seeing an increase of 31 percent.
To put that in historical context, the cost of college has increased 1,120 percent since records were first kept in 1978, rising four times faster than the consumer price index, which measures inflation.
This wouldn't be a big deal if companies were gladly hiring young people without a college degree. The problem, however, is that the "undergraduate degree has become the new high school diploma," as one debt-addled graduate told PBS Newshour.
2. Dim employment prospects
Even when shelling out tens of thousands of dollars for college, graduates have little guarantee of a job afterwards. As of March, the unemployment rate for young college graduates was 8.8 percent, compared to 5.7 percent before the Great Recession hit. (They fare much better than those with only a high school degree, who suffer from 29.9 percent unemployment).
Even if they find a job, there is a good chance it doesn't pay much. Forty-five percent of college grads between 22 and 27 years old are "underemployed" — meaning they have jobs that don't require the college degrees they paid so much for.
"You always have a lot of young college grads working as baristas," Heidi Shierholz, an economist with the Economic Policy Institute, told Crain's New York. "The reason it is so high right now is part and parcel of the overall weakness in the labor market."
3. Long-term salary disadvantage
Sure, young college graduates might have trouble finding a job now, but they'll pick themselves up and make up the lost salary later on, right?
Nope. Studies show that 70 percent of overall wage growth occurs in the first 10 years of a person's career. The least advantaged students who graduate during a recession "suffer permanent earnings losses and are permanently relegated to lower wages," according to a study from the National Bureau of Economic Research. Even graduates with degrees in high-earning fields take a hit, requiring 10 years for their salaries to make a full recovery.
The combination of low wages and high student debt is bad news for the U.S. economy as a whole. Young people attempting to climb out of debt aren't likely to make big purchases on homes or cars.
On the plus side, today's lazy, entitled millennials will be able document their economic hardships on their iPhones.
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- The U.S. Marines are developing laser weapons. Here's why.
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- How 1,000-year lifespans could remake the economy
- Why the Supreme Court is allowing Texas to hold an unconstitutional election
- 6 things the happiest families all have in common
- 43 TV shows to watch in 2014
- 3 horrific inaccuracies in Homeland's depiction of Islamabad
- Gamergate has backfired spectacularly on its nincompoop perpetrators
- Ban PowerPoint!
- Rise of the machines
Subscribe to the Week