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Americans Owe More on Private Loans for Students than on Credit Cards
The Federal Reserve just released a report this month which states that the total amount of private loans for students
have reached more than the total amount of credit card debt in the United States. The report shows that Americans owe $826.5 billion mostly on credit card debt and $829.78 billion on student loan debt. According to the Federal Reserve, this is the first time ever that the Americans owe less money on their credit card debt, outpaced by their student loan debt.
According to Mark Kantrowitz, publisher of Finaid.org and Fastweb.org, the student debt will continue to rise as this is just another consequence of the economic downfall. He has calculated that there are $605.6 billion in outstanding federal student loans and about $167.8 billion in outstanding private student loans
. The number of private student loan lenders has increased to 23 last month, but the most debt the students of America has is mostly due to federal loan lenders.
The US government can keep saying that the economy is recovering. However, it is exactly because it is nowhere near recovery and also because of the inflation that is starting to kick into the US economy, college tuition is skyrocketing. About 20 percent of student loans are in default because of this recession. Students should understand that debt that they acquired in their 20's will be even a bigger burden in their 30's and 40's. If you look around in your family or neighborhood, you can easily see that people whose kids are almost in college are still trying to pay off their student loans.
If you are currently considering to go back to school to further your education, stop yourself and ask why you would want to bound yourself to the most toxic debt known on earth. You may think that investing in education would give you a better chance to finding a job or a better job than you already have today. But the recession we are in is going to last much longer than the education that you are going to pursue on a debt. As soon as you graduate, there is a big chance the unemployment situation is going to be much the same if not worse. Taking out a student loan now will soon dry off your savings or probably even your retirement fund as you will have to repay all the debt. A better option for you might be to allocate all your time, energy and money in creating alternatives to help you earn money from other sources besides having a job. Anything but committing the heavy burden of any private loans for students
around your neck is better.
Total Views: 599 | Approx word count : 463 | 09/02/2010
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