Jump to Navigation

Student loan debt saddles taxpayers, borrowers

Student loan debt used to be a practical risk; borrow to obtain an education and pay off the loans after getting a high-paying job. But with the tenuous state of current economic conditions, many graduates are struggling to repay what they owe, which makes the need for debt relief more important for these young adults.

Student loan debt in America amounts to more than $1 trillion, surpassing both credit card and auto loan debt. This heavy burden could fuel another financial panic because of the economy remaining fragile, experts say.

According to financial analysts, tuition inflation is largely to blame for the skyrocketing cost of student loans. Tuition has consistently increased faster than the rate of inflation, a trend that did not stop when the recession hit.

Not only are today's youngsters being held accountable for the debt, parents have taken out loans that they, too, are unable to repay. More than 30 percent of student loans are at least 30 days overdue, according to official records, and Americans older than 60 still owe some $36 billion in student loans.

Further complicating the situation is the fact that public and private student loans are rarely able to be expunged during traditional bankruptcy proceedings. The federal government is also able to seize all assets if payments are delinquent for more than nine months. Borrowers can have their wages and Social Security payments garnished, tax refunds may be seized and federal benefit payments could stop.

Experts have compared the student loan situation to the mortgage crisis, when lenders claimed to have everything under control. But sadly, in this increasingly partisan political environment, experts say that borrowers are unlikely to see relief any time soon.

Source: Pantagraph.com, "U.S. student loan debt threatens recovery," Tom Raum, April 3, 2012

No Comments

Leave a comment
Comment Information
Start Right Now

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close
Visit Our Bankruptcy Law Website Subscribe to This Blog's Feed
Office Locations

1115 Massachusetts Ave NW,
Washington, DC 20005
Phone: 202-559-1428

10512 Pohick Court,
Fairfax Station, VA 22039
Phone: 703-550-7030

6926 Seven Locks Road,
Cabin John, MD 20818
Phone: 301-890-4500

Toll-Free: 877-441-4076
Fax: 202-638-5858

Twitter link