Student loan debt now exceeds credit card debt

Americans are increasingly going into deep debt to retrain themselves in hopes of landing a job in this tough economy.

USA Today cites a Federal Reserve report that shows student loan debt has now exceeds credit card debt, mainly because students and workers are taking advantage of federal loan programs to build new careers.

Outstanding student loans will exceed $1 trillion this year, while more than $100 billion was taken out in loans last year. The average loan was $4,963 last year, up 63 percent, adjusting for inflation, from a decade ago.

Defaults on loans also are on the rise. With big “payment due” notices on the horizon, one student told USA Today that all the borrowing is “going to create a generation of wage slavery.”

140 comments Add your comment

lol

October 19th, 2011
1:19 pm

good luck using unemployment benefits to pay back your loans….

K-Ster

October 19th, 2011
1:22 pm

Forgive student loan debt, not bail out banks!

Quinsho

October 19th, 2011
1:24 pm

How about we do neither? Stop giving my money to other people.

K-Ster

October 19th, 2011
1:26 pm

Quinsho, it ain’t your money. It’s the top 1%’s money. You barely pay enough in taxes to make up for what you use in roads, schools, interstates, and the numerous other services that magically appear.

tony

October 19th, 2011
1:27 pm

Because no one gave you anything… ever.

Scott Beasley

October 19th, 2011
1:30 pm

Why should student loan debt be forgiven? Are you saying you shouldn’t be responsible for taking out a loan? How is this any different than buying a home, car, or credit card debt? At least with a student loan the interest rate is low compared to a car or credit card. What happens to the institutions that loaned the money for these student loans? Are they now just out that money and out of business? It is time for everyone to go back to living within thier means. Back to the things you need being first then saving the the things you want.

Ej Moosa

October 19th, 2011
1:33 pm

$1 Trillion on education loans, and we are still being told by Obama and Co. that more education and training are needed.

So, which party do you think will get the votes from young people with lots of student loan debt and no job prospects?

Perhaps this has been part of the strategy to secure votes from the beginning.

Chief Wiggum

October 19th, 2011
1:33 pm

Nobody made these ignorant kids take out the loans. Seriously, if I see another kid that went to an Ivy to get a degree in Spanish, then whine about their $120,000 in loans, I’m going to scream. How about these kids take a realistic look at job prospects before shelling out (or delaying it) all this cash.

K-Ster

October 19th, 2011
1:34 pm

I said it should be forgiven over banks. Student loans are the lesser of the two evils. Banks raped the system to boost greed. Adults went to college to improve. How about forgive those loans and not help the banks? Why are banks better?

Scott Beasley

October 19th, 2011
1:39 pm

@Chief Wiggum… Great point! How many of these kids today are getting their degree, then they find out that the job market sucks so they get a masters degree, which means more student loans, only to find out they still have no job experience so no one will pay them what they feel they are worth! I saw a sign carried by one of the Wall St protesters that read “Pay off my student loan” this person had an iPhone!!!! If you can afford the phone and the monthly service for that phone you should be able to pay your student loan. Not saying it is easy, I am having to do without right now to pay off my student loans but that is the price I am paying.

Scott Beasley

October 19th, 2011
1:40 pm

The banks have to repay the loans they were given for the bailout, that is how it is different!

PT worker

October 19th, 2011
1:41 pm

lol you don’t qualify for unemployment because you chose to attend college. Those that graduate have 6 mos then have to start paying for their education however there are several deferments you can do, just be sure to keep in touch with the agency that handles your student loans. Students should have learned about this during their entrance and exit interviews.

Fred

October 19th, 2011
1:42 pm

How about they pay back their loans like I and others had to. Screw your marxist flea partystupidity and double standards. K-Ster – go F yourself ya hypocrite low-life loser.

Quantavius

October 19th, 2011
1:46 pm

Quantavius

October 19th, 2011
1:48 pm

I agree with kster, forgive student loans. Why you can’t declare bankruptcy on them is infathomable.

creditmeister

October 19th, 2011
1:49 pm

A loan is a LOAN! There is no distinquishing factor between a bank loan and a student loan, period. Any loan is required to be repaid within set time restraints and if it isn’t, the loanee must take the consequences which are written in the body of the loan. Facts be known, the institution of higher learning doesn’t loan the money for student loans, it comes from a bank backed by the government. There are just too many people out there that feel if they can’t purchase the car or home or whatever it is after finishing school, then why pretend to repay their loan.

commoncents

October 19th, 2011
1:51 pm

“Quinsho, it ain’t your money. It’s the top 1%’s money. You barely pay enough in taxes to make up for what you use in roads, schools, interstates, and the numerous other services that magically appear”

I may not be the top 1%, but I do pay for these services you want to give away… My gas for my daily commute pays for the road, my property tax pays for the public schooling I had. My sales tax and every other tax you can think of pays for everything else, including the handouts of others.

The Man

October 19th, 2011
1:53 pm

It takes Public Safety forever to pay back these loans. I guess we will take them to our graves. we’ll look athow much money give away overseas.

Bill

October 19th, 2011
1:55 pm

I am sure the Liberal answer is to have free college education.

They still can’t figure out nothing is “free”, the money comes from somewhere.

Scott Beasley

October 19th, 2011
1:57 pm

Quantavius, again if you forgive these student loans who is going to repay the banks that made these loans? Since these are government guaranteed loans…. guess who repays them! Forgiving debt is not the answer, a change in living is the answer.

commoncents

October 19th, 2011
1:59 pm

“I agree with kster, forgive student loans. Why you can’t declare bankruptcy on them is infathomable.”

Then every person can go get a top notch education, graduate, then declare bankruptcy. Who would be willing to loan to a person if this were possible? And it’s not like the lender can repossess the knowledge that person gained. (Of course, it doesn’t seem like there is too much to repo if the graduating student thinks they should be absolved of debt for agreeing to loan terms and then not repaying)

Tom

October 19th, 2011
2:00 pm

If they are going to ‘forgive student loans’ and I’m upside down (no fault of my own, multiple foreclosures in the area), then the same government should fix it so I’m no longer upside down.

Bill

October 19th, 2011
2:00 pm

creditmeister@1:49

Actually a loan isn’t a loan. You can BK out of a House or Credit Card debt and any other kind od bedt but you can’t BK a Student Loan.

I confess to not knowing the origin of this policy.

Bill

October 19th, 2011
2:01 pm

Dave

October 19th, 2011
2:09 pm

Why should any taxpayer money be used to pay for any loan a person takes out. The person who requested the funds has responsibility of repayment. Nobody forced them to take the loan.

Typical

October 19th, 2011
2:12 pm

Americans….B!#ch and moan instead of work and solve….

Rich

October 19th, 2011
2:12 pm

Quantavius – Student loans are backed by the Federal Government and like tax debt, you can not have them removed in bankruptcy. If you could, there would not be anyone willing to provide student loans.

Fannie

October 19th, 2011
2:13 pm

First, far more than the top 1% pay taxes… how about the top 50%.

Second, if we allow student loan bailout to the tune of $1 trillion, someone has to pay (either the banks or the taxpayer)

Third, if we allow students to default on student loans, student loans are dead. There is absolutely no reason any lender would lend a student money. It would actually make HUGE sense to, as an 18-22 year old… run up hundreds of thousands in debt and just declare bankruptcy upon graduation. You have plenty of time for your credit to recover.

Fourth, the problem here is the colleges and universities (public and private). They have jacked up the price of college faster than inflation for the last 40 years! You want to occupy something? Occupy the lawn in front of your college president. Demand he cut the cost of college in half!

Fifth, lets entertain (for a moment) what could be done with the $1Trillion that they propose be forgiven for students. That is enough to lower the principle on every single underwater single-family home in America to turn it rightside up. THAT would completely revive the housing market. That would result in a far bigger boost to our economy than paying of student loans.

It completely amazes me that the students who know everything, have every answer to all the worlds problems, can’t do simple math when borrowing $30k or $50k or $200k for a liberal arts degree. This fundamental inability to see reality shows what a bunch of moronic twits they are.

Rich

October 19th, 2011
2:16 pm

The root of the problem is that people took out loans that they could not afford. My child wants to spend $200,000 on an undergraduate degree. It makes no sense to spend that when the degree could be had at an in state public school for about $52,000. If all goes as planned, she should be able to pay back $200,000 after her PHd. But what happens if she does not get a PHd? She has debt that the degree will not support.

Good Citizen

October 19th, 2011
2:28 pm

I put myself through college by working part-time and applying for scholarships and loans. I paid 100% of my student loan back. I struggled to find suitable housing in Atlanta because back then banks weren’t loaning out vast sums of money to people whose income didn’t warrant it. I pay my bills on time and have great credit, yet I feel I’m being penalized for all those who did NOT work hard for their education, home, etc. I know of people who are offered credit before the ink on their bankruptcy paperwork is dry.

Never mind for a moment what message this sends to deadbeats; what kind of message does this send to those of us who followed the rules and worked hard to get what we have?

How about a tax break for those of us who have managed to pay our mortgages on time despite the failing economy? I’m tired of working hard only to see my taxes used to prop up people who have no incentive to pay back their debts because bankruptcy is an easy alternative.

Whatever

October 19th, 2011
2:42 pm

@GoodCitizen Stop your whining! Bankruptcy is NOT easy.. if it was then everyone would do it rather than pay their bills… Geez….

Bob

October 19th, 2011
2:43 pm

Charging students 6 to 7% interest on unsubsidized Stafford loans is really steep interest in these days, given what prime is. It does seem unfair to burden them, with so much compounded interest at premium rates. Especially given it is not dischargeable.

Already Done

October 19th, 2011
2:44 pm

The good news? No more tuition

The bad news? Paid full boat at a top 20 school.

The better news? I am employed and owe zero student loan debt.

My parents are at the bottom of the 1% that pay 40% of the federal taxes. If you forgive student loans you owe my parents about $240,000.

They pay their mortgage on time too. In other words, they are responsible and self reliant.

Model that, Obama.

JD

October 19th, 2011
2:46 pm

It is understood/taught in our society that a college degree or an advanced degree will ’set you free’. Students are told to do well in high school so that you can get accepted into a great college. Students are told to do well in college so that you can get accepted into a great grad school. Students are told to do well in grad school so that you can get a great job! As a matter of fact they (the students) are told that with a college/advanced degree their income will be higher than the person without a degree (the higher you go the more you will know). Students are fed this line of crap all throughout their ’student’ days. Then they graduate and FIND OUT THAT THERE ARE NO JOBS! They have been lied to and fed a bunch of crap. By whom??? By the keepers of this society (teachers, bankers, pastors, parents, etc.)! They have taken out loans of great proportions to find that they have no way to pay the damn things back! Get a job at Mickey D’s making minimum wage and start paying back your $150,000.00 loan. GOOD LUCK!

GG

October 19th, 2011
2:51 pm

They should forgive student load debt, I mean the banks, wall street, and other big corporations get bailouts, but the american people that help contribute to their wealth cannot?? I don’t understand this concept whatsoever. Maybe if they did forgive student loans, consumers would have more money to pump back into the economy. It makes sense to me??

dw

October 19th, 2011
2:56 pm

James

October 19th, 2011
2:58 pm

Fannie is right on! College isn’t for everyone and
those who are lucky enough to go should not go to these
high priced schools when they don’t have a pot to pee in….
The Ivy’s, Emory’s, Duke’s, Vanderbilts, etc should only
take people that actually have the $$ to pay for that type
of school… Students in debt up to their eyeballs is no
ones fault but their own… Good luck to them as they sit
on their rear ends at these OCCUPY rallies trying to get a job…

Ellen

October 19th, 2011
3:03 pm

Maybe instead of forgiving student loans, we should just BAN banks from charging interest on top of interest for them. Private student loans (from banks not the federal gov’t) have obscene interest rates. Why can’t they just charge reasonable rates?

Rich

October 19th, 2011
3:04 pm

If we forgave student loans, who would be out the money? The simple answer is the banks, which loaned the money, but the borrowed the money. The money was borrowed from the other bank customers that have a savings account or CDs. So, if we forgave these loans would the kids and seniors who have savinga accounts and CDs lose money. That is really who put the money up.

Rich

October 19th, 2011
3:05 pm

Ellen – What is an obscene rate and why would a borrower agree to an obscene rate?

Greg

October 19th, 2011
3:06 pm

Re: Scott Beasley’s comment about student loans being cheaper than other loans–that is true for current grads, but not for older grads who took out loans before rates plummetted. I have loans at over 8%, and because of the stupid rules, I can’t re-consolidate to lower the rate. If you can refinance a house, you should be able to do the same for student loans and lower the burden.

Faith Repayer

October 19th, 2011
3:16 pm

I am faithfully paying my student loans back as I should and doing the best that I can. But one thing I will say, how about lowing the interest rates on these suckas. The interest rates are so high, many people just say forget it, I will never pay these off so they just go into default and never pay them back. I mean with all the interest that accrues on these loans, by the time I pay it off, I would have paid my principal balance off twice. Makes no sense!! Work with me people.

mr brasco jones

October 19th, 2011
3:22 pm

what has always been interesting to me is that “we” have this fantastic idea that all you need to get ahead in life, a good job and a successful career is a college degree. that couldnt be farther from the truth – a college degree has NEVER guaranteed you anything. one would be lucky enough just to land a job that you enjoy let alone one in your field of study – and even then, your field of study could’ve been something that your parents forced you into = mid life crisis – what i dont understand is, why are people continuing to return to school, taking out more loans for more education to get a better or higher paying job…with unemployment at 9-12% respectively across the country, where are these jobs??? and you cannot blame the illegal immigrants – this country was seized and built by immigrants – its the american way – there are 24hrs in a day – most jobs have a 8-9hr work day – solution – be creative – get another job, another source of income – another stream to fish in – bill gates didnt get his degree until after he was a billionaire…

OCCUPY UNIVERSITIES!

October 19th, 2011
3:24 pm

Sounds like we need to mandate a FINANCE course as part of accepting a student loan. Either that or start your march on the UNIVERSITIES for being GREEDY and charging so much for an education!

[...] Here is the link to the article about student debt exceeding credit debt: http://blogs.ajc.com/business-beat/2011/10/19/student-loan-debt-now-exceeds-credit-card-debt/ [...]

Recent Grad (with a job)

October 19th, 2011
3:34 pm

Unemployment for college graduates is estimated between 4-5 % as compared to 9-12%. The majority of the unemployed are therefore those who don’t get educated or aquire technical skills, but I do agree you can’t whine about loans that you agreed to. Period.
Grants and scholarships exist, as long as you are studying fields that are valuable and earn acceptable grades. Otherwise, why are you even in school, right?

Forgive Student Loans

October 19th, 2011
3:36 pm

When someone defaults on a student loan the government pays. Everyone is correct on that. However, what most are leaving off, is that that person is still responsible for the loan. They can not have the loans removed via bankruptcy. So the loan companines that have already received the funds from the government are still entitled to the money owed them from the defaulter. Meaning they get paid twice, plus interest and fees!!!!!!!!!!!!!!!!!! And before anyone wants to blame a Rep or Dem. It was passed by a Rep Congress and signed by Bill Clinton.

Finance

October 19th, 2011
3:37 pm

The federal government (US taxpayers) back the student loans. If they aren’t paid, then the taxpayers take the hit, not the banks or the depositors. The reason banks charge higher rates on student loans is because there isn’t any collateral. What will they come after if you don’t pay, your brain, your diploma, or maybe all of that useful knowledge in women’s studies? When you borrow for a house, if you don’t pay they come take the house. The higher the risk and the lower the collateral, the higher the rate. Get used to it, it’s called reality not classroom.

Marjorie Morningstar

October 19th, 2011
3:40 pm

In response to James, if the Ivy’s only take those who can afford it, you create a society where only the rich get richer (which is where we are now). Those are the folks who get the top jobs. Two people going for the same job, one with a degree from Georgia State and the other from Yale, who gets the job? Tuition at colleges, professor salaries and student loan interest needs to be cut across the board. Our society is out of control, salaries are out of whack. We need a revolution

SJ

October 19th, 2011
3:41 pm

I agree w/ KSher.. forgive us all for trying to better ourselves while big banks get bail outs and the federal government gives out FREE money to programs such as WIC/EBT…

Come on government WAKE UP!