Student loan debt all across the country and right here in Memphis, Tennessee, continues to grow. New estimates suggest that one in five houses has student loan debt over $26,000. As loan debt grows more and more, debt management will become more important in providing debt relief for students.
All across the United States, the total amount of student loan debt has reached approximately $1 trillion. Student loans are not like any other loans. In addition to not being able to discharge student loan debt in bankruptcy, the application for student loans does not require a credit check. Student loans, unlike other loans, are issued to the borrower whether or not they have good credit or the ability to pay back the loans. Additionally, the federal government issues a large portion of student loans as compared to private lenders.
A new suggestion has emerged in an effort to reduce student loan debt. The new idea proposes that the government consider fact-based questions when assessing whether or not to issue student loans. The government should consider the student's ability to repay the loans. The government should also consider the students GPA, major and academic institution. Different majors and institutions may have an effect on students' ability to repay their loans.
If this proposal succeeds, student loans will become more like regular loans (such as mortgages). Makers of the proposal hope that placing limits on student loan borrowing will limit the number of students taking out loans and will limit the amount of money that students takes out in loans.
This new solution may be able to help students pay back their loans. A student, however, must still consider all of his or her debt management options before taking out loans.
Source: Forbes, "Student Loan Crisis Solved -- Next Problem?" Raj Sabhlok, Dec. 14, 2012