Student loan debt stands at $1 trillion and has surpassed credit card and auto loan debt in the United States, according to a story in the Associated Press.
That ominous news has some in the financial world concerned that student loan debt could be the next big ‘debt bomb’ to threaten the US economy’s recovery.
Average student loan debt recently topped $25,000, up 25 percent in 10 years.
Nearly 3 in 10 of all student loans have past-due balances of 30 days or more, according to a new report by the Federal Reserve Bank of New York.
And it’s not just recent students. Americans 60 and older still owe about $36 billion in student loans, according to the report.
In case you didn’t know, falling behind on your student loan can be a nightmare. Missing just one student loan payment puts a borrower in delinquent status. After nine months, the borrower is in default. Once a default occurs, the full amount of the loan is due immediately. The government then can –and will — garnishee a borrower’s wages and to seize tax refunds and Social Security and other federal benefit payments.
A dismal job market has made it difficult for people to pay off their student loans and has driven may people back to school and to more loans.
Did you go into debt to get a degree? Have you or did you have a had a hard time paying off your student loan?