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New Student Loan Debt Numbers

28 September 2012 by

New Student Loan Debt Numbers

The Pew Research released its most recent numbers regarding student loans. What it found is 19% of American families now carry student loan debt, which is a three percent increase from three years earlier. It used the word “exploded” when describing student loan debt. More of us are taking college courses and as a result, more of us are financing it via student loans for larger amounts and higher interest rates. Not only that, but many analysts were sure the trends that included reducing our debt would continue well into 2013. Turns out, we’re doing anything but. The silver lining, though, is that loans more than $100,000 account for only 4% of all student loan debt.

In 2010, the average consumer carrying student loan debt rose to $26,670 and that’s a whopping 14.3% increase from 2008 and twice of what it was in the mid 1990s. And, as you might expect, those numbers are expected to continue to climb – it’s how we deal with them that determines how big of a burden student loans become.

Debt Climbs

We all recall the news last year about how quickly student loan debt was nearing a record $1 trillion. That number continues to climb as do fears that as a whole, consumers won’t be able to repay the debt. Make no mistake – analysts are in agreement – this is the next crisis that promises to be as bad if not worse than the mortgage meltdown that kicked the recession into high gear. Delinquent student loans are climbing and there’s not a job market to support those graduates. Then, of course, there are those who take out student loans and then find themselves in too deep and must drop out of school in order to help their families pay those climbing debts associated with credit cards.

The 2009 CARD Act put into place guidelines that prohibited the way credit cards were marketed on college campuses. Despite that, the average credit card debt for college seniors is around $3,000. While some have parents who shoulder those burdens, there’s a still-growing number of people who can no longer afford additional credit card debt. Many families are already shouldering other expenses that come with having a kid in college and then taking on that student’s credit card debt is more than some can take. And worse, many don’t believe the economy is improving, they believe the fiscal cliff will occur and it’s entirely likely we will see a new low in voter turnout come November.

No Work Here

There’s a new concern, too. Many college students who can’t find jobs, but who have taken on auto loans and credit card debt, along with their student loans, are turning to bankruptcy as their out. Many graduate college with the certainty they’ll be able to secure a job in their chosen professions, only to discover they’re limited in what they can secure in terms of a job. They can’t include the student loan debt, but they can get out from under their other debt they shouldered with confidence they’d be able to pay for it. Even the Direct Subsidized Loans that Congress saved earlier this year isn’t helping. This is the loan designed not to kick in until six months after a senior graduates. Many say it’s just too little, too late.

2010 was the first time in history that the total amount borrowed in student loans surpassed the $100 billion mark. Those numbers are rising every year too. In 2011, according to some sources, the total amount of money outstanding in student loans was was already more than $1 trillion. It should be noted the Federal Reserve Bank of New York says student loans haven’t quite reached the $1 trillion mark.

Interestingly, student debt levels are rising mostly for the country’s poorest and the country’s wealthiest college students, or rather, the students’ families. The poorest ow 13% of total student loan debt, which was up 11% and the wealthiest account for 31% of student loans and that’s up 3%.

The Numbers

Nearly half of all the money owed is owed by people under the age of 35. Those between the ages of 35 and 44 owe a quarter of the total and 2% of the total is held by senior citizens. And now, and likely what’s the most alarming aspect, is recent grads now fall into the lowest income categories. There simply re no jobs for them to come into. They struggle to cover their bills and when they can’t, they take drastic measures, including filing bankruptcy.

Others are opting to return home to their childhood bedrooms and then there are those who think their only option is to go back to school, take on more student debt, but also find some kind of shelter until it’s safer to emerge again. It’s a burden and it’s growing, but the best educated in this country are struggling more than their parents and perhaps event their grandparents.

What are your thoughts? Are you shouldering student loan debt? If so, share your story with us.

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