Nowadays, more and more students are taking out loans, and while other types of debt are being paid back, student loans are not. It is clear that students are struggling with debt management and need debt relief.
Students across the country, and right here in Memphis, are struggling to pay back student loans. According to new reports, the amount of student loan debt has been growing every quarter since 2003. In September 2012, the total amount of student loans left outstanding hit $956 billion, up $42 billion from last quarter. While student loan debt continues to grow, other consumer debt continues to shrink, possibly showing that consumers are becoming more aware of their debt.
One of the biggest issues involving student debt relates to the delinquency rate. The new study finds that approximately 11 percent of student loans are now at least 90 days late. This is the first time ever that student loan delinquency has been higher than credit card debt.
As students graduate with more and more student debt and struggle to find jobs, this crisis will continue to spread. Students need to be prepared to face this dilemma head on. They must begin to develop a debt management plan before they graduate from college. Students must be aware of how much debt they are amassing and should consider all of their options when they graduate. This is not to say that students should not take out loans, but they should be aware of what they are doing and the consequences of debt.
Another important consideration is the fact that student loan debt cannot be discharged in bankruptcy. While other kinds of debt are discharged, student loan debt is exempt from bankruptcy.
Students must prepare and look at debt management options before they graduate from college. Someone experienced in debt management can provide the support that students need.
Source: The New York Times, "Student Loan Debt Rising, and Often Not Being Paid Back" Catherine Rampell, Nov. 27, 2012