Student Loan Debt Has Passed Credit Cards In Delinquency Rates
As the cost of education increases, and the economy is slow in creating new jobs for those with college and graduate degrees, more people are becoming delinquent with their student loans. Americans owe about $1 trillion in student loans. Unlike credit cards and other forms of debt, student loans, absent some limited circumstances, are not dischargeable in a bankruptcy proceeding. So unlike someone who recklessly and irresponsibly runs up $60,000 in credit card debt can file bankruptcy to relieve themselves of that debt, an individual who borrows $60,000.00 for college, who maybe can’t get a job or who works two jobs and has close to $1,000.00 in student loan payments a month plus other living expenses (food, housing etc..) he/she is stuck with that financial anchor.
According to a TransUnion Study deferred student (deferment applies to Federal student loans, it enables those who are unable to make payments suspended payments for an agreed upon time or defer the loans while in school) loans make up about 43% of all student loan debts. According to Forbes’ magazine one cause for the high deferment rate, that more than half of the college graduates under 25 are either unemployed or underemployed.
According to a recent article in Forbes’ in 2012, the average student loan debt was $27,253. Approximately 1.2 million of these individuals had student loan debt in excess of $100,000.00. The question that lawmakers and economist are now debating is whether the Federal government should institute a student loan bailout. Though a bailout is not likely, lawmakers will need to address this issue in some matter.
However, at the end of the day something as to be done to make college and post graduate education more on par with the rate of inflation and the economy. Between 1985 and 2011, college tuition increased almost 600% compared to gasoline which increased by 300%.