College Loan Debt Just Passed Credit Card Debt!
Americans now owe more money on their college loans than they do on credit cards.
I just read about that scary reality on The Wall Street Journal’s website.
According to Mark Kantrowitz, the financial aid guru over at FinAid and Fastweb, Americans owe about $829.7 billion in student loans. In comparison, consumers owe $826.5 billion in revolving credit card debt.
Most of the college loan debt – $605.6 billion — is owed on federal student loans. Private student loans are in a distant, but troubling, second place. These numbers, by the way, don’t include the debt that parents absorb when their kids head to college.
College loan debt is scarier than credit card debt because it can hardly ever be discharged in bankruptcy. The penalties for students, who fall behind with their student loan payments, are nothing short of draconian. You can read heart-breaking stories of student-loan casualties at Student Loan Justice.
Students who take out federal loans are in better shape than those who carry private college debt. I was just telling a friend this week about a fairly new federal program called Income-Based Repayment Plan that can help reduce the student debt burden at least temporarily. There are, however, no magic bullets for students who have overdosed on private loans.
What’s equally frightening, is how heavily college students have been turning to loans recently. Kantrowitz estimates that students have accumulated $300 billion in federal student loan debt in just the past four years.
Here are some posts that I’ve written recently on college loans:
A Cheat Sheet for Repaying Student Loans
What is the Best Student Loan?
Best College Loan Advice: 9 Tips for Borrowing for College
5 Things You Need to Know About Private Loans
Lynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller, and she also write college blogs for CBSMoneyWatch and US News. Follow her on Twitter.
What I find interesting is how the students in America are in such high debt. It is very confusing to see them put in debt in order to get an education. I only hope this problems gets better.
Take a peek at Maslows hierarchy of needs and see where all those low paying educations attempt to influence culture or better yet how all the high paying educations are transforming us into individuals deprived of creativity and individuality…Sorry, make money and become a new third world country, what a winner, remember the Peter Principle… it worked then it will work now.
[…] and editor with AOL Money & Finance and he is earning his college degree without relying on student loans. Just as impressive, even though he’s paying for college on his own, he’s still managed […]
This is not at all surprising. I worry about the future of our college system.
Julie Abbott
Editor, http://www.collegeinutah.net
A Directory of Colleges in Utah
I have come up with a creative way of financing my $45,000 in college debt. I have started a site called http://www.quarterforcollege.com where I am asking visitors to donate 1 QUARTER to help fund my college debt. My hope is that by asking thousands of people to donate a small amount that together we can go a long way. If you are curious check it out.