Student Loan Debt By the Numbers

Student Loan Debt By the Numbers

Most everyone knows these days that student loan debt is a pressing issue. Millions of young college grads are coming out of school facing huge debt burdens and an inability to find the high-paying jobs to cover the repayment of these debts. The economy is not able to sustain the number of graduates, and with student loan debt not dischargeable in bankruptcy, many are finding themselves unable to dig their way out of their debt burden.

National Student Loan Debt $1 Trillion

The latest estimates have U.S. student loan debt at just under or right around $1 trillion dollars, depending on the source of the information. The average college graduate owes more than $26,000 in loans by the time he or she receives a diploma.

Some people blame the easy availability of federal funds for the rise in these numbers, while some point to factors such as for-profit institutions offering high interest loans to possible candidates and using recruitment techniques with misleading information about the availability of jobs for graduates.

Federal student loans are obtainable to just about anyone who applies to go to college, a fact which some experts have pointed to as a major source of problems with individual student loan debt. While not dischargeable in bankruptcy, federal student loan debt does have a variety of built-in protections like deferment and forbearance, in addition as income-based repayment options for those struggling to make payments. In addition the federal interest rate has been fixed at a manageable percentage for some time, although recent legislation could be set to increase it.

A major point of contention has been the high interest private loans offered by companies for borrowers in graduate school and enrolling in for-profit institutions. These high-interest loans do not characterize the same built-in protection that federally backed loans do, and in addition are nevertheless non-dischargeable in bankruptcy. What this method is that more and more often students of higher education and for-profit institutions are graduating with student loan debt at much higher interest rates than the federal levels, featuring none of the income-based protection that federal loans boast. These graduates are denied the protection of bankruptcy offered to other loans of this kind, such as credit card debt, to which private student loan debt is more closely related. The upshot of all this is a growing body of people who are unable to find the types of job opportunities their degrees should provide them, and equally unable to get any relief from their debts, which can quickly threaten to overwhelm them.

Many experts are actively lobbying to fix this issue, and hopefully a solution to the problem will come in the near future.

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