Runaway student loan debt hurting economic recovery?
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?
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67 comments Add your comment
fes
April 3rd, 2012
3:40 pm
pay your freaking bills! i’m tired of making the right decisions (like postponing the purchase of a home until i can truly afford it) only to see others that make poor decisions get bailed out time and time again. you signed up for the loans. now man up and pay them back like the rest of us.
Cutty
April 3rd, 2012
3:45 pm
Ray Turdinski can say what he want over the internet. Most Morehouse graduates move on to business, medical, and law school. He wouldn’t step foot on Morehouse’s campus and actually speak those words. Plus, we’re way cooler than those Tech nerds.
Facts that hurt
April 3rd, 2012
3:46 pm
Kim, maybe you should have taken a math class? Yah think?
marktwain
April 3rd, 2012
3:50 pm
This is what you get for imposing the death tax on the wealthy. They’ll keep jacking up the cost of college until their children will be the only ones that apply. Then we get back to the good ole days when rich morons could get by on martinis and jokes and didn’t have to deal with this crap about studying.
DawgDad
April 3rd, 2012
3:55 pm
“How is it fair that some are having to decide between talent, intelligence, and future societal contributions, and what he or she can afford? ”
Most people do this every day, day in, day out. Most intelligent people, educated or not, realize life isn’t inherently “fair”.
This is nothing more than trolling for votes, cloaked in “compassion” and “caring”.
Tolls Bane
April 3rd, 2012
4:15 pm
Fact’s :
Why should the new generation be any different from mine? I graduated college with a business degree in 1992 … and I am only now earning 6 figures …. I did not have a vacation or high end suit for a long time.
Dan
April 3rd, 2012
4:15 pm
In no way is it capitalism gone way wrong, it is simply supply and demand, a law of nature much like gravity, that is manipulated by the government along with poor decision making. If a a business that sells oil or cars or construction claimed all these wonderful benefits attributable to their product and then delivered a product falling far short of those claims you would be suing for compensation. Education gets a free pass and we keep throwing money at it because it sounds good. All the pols want to say they support education, so they throw money at it without considering the ramifications. Perhaps people should work their way through college and not take loans, or maybe take loans just for tuition and not for “spending money”, and do your research make sure what you are studying is likely to result in a return on your investment. All those things are up to the individual not the school or the government
jimbob
April 3rd, 2012
4:25 pm
Gene, and others, yes, the freshman class at Georgia has a high SAT, but most of the school’s graduates come in as juniors from the community college system. You’ll never see UGA factor in their SAT averages. And loan balances have skyrocketed not just because of college costs, but because everyone, it seems, needs a car, an apartment instead of a dorm room, and a smart phone. They rarely eat in the cafeteria, although they pay for it, choosing instead to “go out.” And student fees, which used to be paid for at state schools with HOPE but no longer, largely go to the athletic department. Why do you think student section tickets are so cheap? Just like the rest of society, students are largely living beyond their means. If you want to dance, you must pay the fiddler. And yes, the for profits are the biggest con game going, bar none. Signed, a seasoned, tell ‘em as I see ‘e college administrator
Just Wondering
April 3rd, 2012
4:31 pm
How many colleges and universites will go under if this comes to fruition?
Butch Cassidy
April 3rd, 2012
4:41 pm
I got both my BA and MBA in Finance, and had a great career. Having said that, there are only a handful of industries where post secondary or post grad education (or both) should be required:
Medical
Law
Science
Engineering
Finance
The rest of the job market could easily accomodate a High School or Associates degree by bringing back apprenticeships, OTJ training, management training, dedicated succession planning etc..Of course, that would require companies to once again view the employees as an asset rather than a line item.
LJ
April 3rd, 2012
5:47 pm
Its time to cut off the line of free credit to students who clearly won’t be able to pay it back(I’d wager thats 50+%)
Just like with the housing crisis the majority will be kicking and screams that its not “fair” to have a sustainable education system. Then, when it all blows up in their face, they will point fingers at everyone but the fun
This issue goes beyond politics. The MATH of the situation guarantees that we are running at full speed towards a very solid brick wall. You can debate all you want on “fairness,” but that big brick wall doesn’t care.
guy
April 3rd, 2012
5:51 pm
hey all you people who sucked at your jobs and got fired during the crash and went to go hide in some school somewhere and now want me to pay for your bills and loans… suck it! thanks
c.c.
April 3rd, 2012
6:21 pm
Attention class: Overpriced and overinflated tuition + no job or low paying salary (may or may not be in field)= loan default Class dismissed!
Educator1
April 3rd, 2012
6:24 pm
Damn academic 1 percenters gouging prices to line their pockets. We should tax them more to pay for education
S.R.
April 3rd, 2012
7:43 pm
It doesn’t matter what you major in if you go to a good school (i.e., >1400 average SAT). Everyone else is just fighting over the crumbs. I guess a math or hard science major is better off than a humanities major at an SEC school, but that’s a lot like being the world’s tallest midget.
Some of you will assert–in responses rife with grammatical errors, logical fallacies, and conservative talking points–that you went to [insert inferior college], got a degree in business (which isn’t even a major at legitimate schools), and now make [insert unrealistic salary]. You’re not fooling anyone.
debtload
April 3rd, 2012
10:58 pm
the government should forgive all the student debt for the low income–especially minorities who can’t find good jobs to pay back all this debt.
Bob Walters
April 4th, 2012
1:20 am
The student debt problem is much more of symptom of the complete collapse of the American work ethic that anything else. Most of these dead beat debtors are doing the minimum to get by. So long as the penalty for renegging on student debt is little more than a paper tiger, the defaults will continue.
We have plenty of prison space available in many rural areas just waiting for these dead beats to pay a vist and work off some of that debt the old fashioned way. Take some advice from Ron Paul and demonstrate some personal responsibility.
Nine more months to slack off, then things are a changin’. Get to work or go to jail!
Tea Party 2012 !