Student loan debt in numbers
Almost everyone knows these days that student loan debt is an urgent problem. Millions of young college graduates are leaving school facing huge burdens of debt and the inability to find well-paying jobs to pay off these debts. The economy is unable to sustain the number of graduates, and since student loan debt cannot be canceled in bankruptcy, many find themselves unable to get out of debt.
National debt for student loans $ 1 trillion
The latest estimates indicate that US student loan debt is just under $ 1 trillion or about $ 1 trillion, depending on the source. The average college graduate owes more than $ 26,000 in loans when they receive a diploma.
Some people blame the easy availability of federal funds for the increase in these numbers, while others point to factors such as for-profit institutions offering high-interest loans to potential applicants and the use of misleading hiring techniques. on the availability of jobs for graduates.
Federal student loans are available to almost anyone applying to college, a fact that some experts have pointed to as a major source of problems with individual student loan debt. While it can’t be canceled in bankruptcy, federal student loan debt has a variety of built-in protections like deferment and forbearance, as well as income-based payment options for those struggling to make payments. Also, the federal interest rate has been set at a manageable percentage for some time, although recent legislation could be put in place to increase it.
A major point of controversy has been the high-interest private loans offered by companies to borrowers in graduate school and enrollment in for-profit institutions. These high-interest loans do not have the same built-in protection as federally backed loans, yet they still cannot be canceled in bankruptcy. What this means is that more and more students from higher education and for-profit institutions are graduating with student loan debt at interest rates much higher than the federal levels, without the income-based protection of which federal loans count. These graduates are denied the bankruptcy protection offered to other loans of this type, such as credit card debt, to which private student loan debt is most closely related. The result of all this is a growing number of people who cannot find the kinds of job opportunities that their degrees should provide, and cannot get any relief from their debts, which can quickly threaten to overwhelm them.
Many experts are actively pushing to fix this problem and hopefully a solution will be found in the near future.