Student Loan Blog Series I: The Student Loan Crisis
Student Loan Debt is Drowning Americans
According to the Chronicle of Higher Education approximately 60 percent of the 20 million new American college students each year take out student loans annually to cover their college expenses. US News reports that Americans owe over $1 trillion in student loan debt, and half of that debt isn’t being repaid because borrowers are struggling in today’s economy.
Moreover, 7 million borrowers are over 90 days late on their payments. These are borrowers in default. This does not include the borrowers that have their loans in forbearance or deferment.
How Much Do Americans Borrow for College
The average student loan balance is $24,301. However, 25 percent of borrowers owe more than $28,000; 10 percent owe more than $54,000; 3 percent owe more than $100,000; and 1 percent owe more than $200,000 (Federal Reserve Bank of New York)
Over Half of Borrowers Struggling
Currently nearly 63 percent of all student loan borrowers are failing to make timely payments according to the U.S. Department of education. Even more worrisome is that 2 of every 5 borrowers become delinquent at some point in the first five years after entering repayment.
A major problem, along with the low wages, unemployment situation and credit crunch, is that the borrowers are not educated on their options. Many students misunderstand their student loans and also failed to realize other options to finance their education. For example, they did not utilize the number of scholarship programs, financial aid options, or simply did not understand that some degrees provide for higher salaries than others.
This is why, in the following posts to this blog series, Orange County bankruptcy attorneys will discuss the types of student loans available, and the options you have in different situations to help fight this financial burden.
In addition to managing your student loan debt, you should also consider reading our blog series on credit debt. Together, you can manage all of your debts into something more manageable.