On average, one out of four Americans owe some form of student loan debt. With this massive amount of 1.59 trillion dollars of student loans, calling it a crisis will be an understatement. These loan payments also negatively affect the financial well being of individuals as well as the whole economy. Find out more about student loan debt in the U.S. and what are the recent advancements to overcome the issues.
It’s 2019, and the Americans are more stressed about student debt than ever before. Because they now owe an alarming amount of student loans debts. It is also the fastest growing consumer debt category and second highest after the mortgages.Additionally, it has become a major point of concern for people of all ages and across all demographics.
Student Loan Debt Statistics in America
Today, 70 percent of all the college students leave their collegewith some form of debt. Collectively, the overall amount of student loan debt is 1.59 trillion dollars as recorded in the first quarter of 2019. This a massive amount which makes up roughly eight percent of the national income. Even this amount is larger than the GDP of 175 countries. Also, no company in fortune 500is able to generate half of the revenue of this figure.
About 45 billion borrowers in America owe some form of student loan to FED or a private institution. While the student loan default rate is 11.4 percent (a loan that is 90+ days default).
An average American loan borrower owes $37,172 as student loans to both federal and private institutions. This amount has increased by $20,000 in the past 13 years.
This Alarming Student Loan Debt Is Bankrupting the American Dream
It’s only after a decade of great recession that the increasing volume of student loan debt is crushing Americans’ dreams.Despite the higher costs of college education, students need to acquire it for securing a high paying job. According to research done by Georgetown Center on Education and Workforce(CWE), 65% of jobs will require postsecondary education by the year 2020. But the average price tag of college educations is quite high and was recorded $34,740 in 2017-18. This means the only way to peruse higher studies is to take student loans. And to get trapped in a vicious circle of financial instability.
Such unsustainable finances are what stressing Americans the most. According to a survey done by Bank of America, About 51% of Americans are worried about their financial wellbeing.While student loan is the biggest factors adding to this stress.
Far-reaching Impact of Student Loan Debt Crises
According to recent researches and surveys, Americans are putting off their dreams of making a family or buying a home. This is because they are already struggling with crippling debts while trying to make the ends meet. Not only this, but these loans also hamper the growth and formation of small businesses. As per a 2015 study, there exists a strong negative correlation between student loan and small business formation.
This issue has also gained attention on political grounds. That’s why three of the presidential candidates including Julián Castro, Elizabeth Warren, and Bernie Sanders have presented their separate student loan forgiveness proposals. Now time will reveal what type of good these steps will bring to our economy.
Student Loan Bankruptcy
It’s a common belief that student loans are not discharged in bankruptcy. But it is, in fact, possible to discharge your student loan debt in both chapter 7 and chapter 13 bankruptcy. However, they are quite difficult to discharge as compared to other loans.And you have to file a sperate action called adversary proceeding. It needs you to prove that the repayment will lead you and your dependents to undue hardship. While your creditors can even challenge your claim. So, it’s better to discuss the matter with an experienced bankruptcy attorney regarding your situation.
Moreover, lawmakers have recently presented a bill know as Student Borrower Bankruptcy Relief Act of 2019. If it gets passed, then discharging the student loan debt will become much easier in the future.
Student Loan Debt Denver
If you are in the Denver area and are struggling with Student Loan Debt there may be a solution.