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Federal Loans Burying Students in Debt
Posted at 8 a.m. on Nov. 29, 2012
“Nearly all student loans—93% of them last year—are made directly by the government, which asks little or nothing about borrowers’ ability to repay… But rising student-debt burdens and stories about students and parents drowning in debt…is focusing attention on risks to the government and borrowers,” according to the Wall Street Journal.
“Unlike most other types of consumer credit, student debt is extremely difficult to discharge in bankruptcy. After falling behind on payments, a borrower typically finds it harder to obtain other types of consumer loans, or can only do so at higher interest rates… Since the end of 2007, just before the financial crisis hit, total student debt has grown by more than 56%, adjusted for inflation… During that time, overall household debt—including mortgages, student loans, auto loans and credit cards—fell by 18%, to $11.31 trillion as of Sept. 30.”
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Alkonost