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.
The publisher of websites that searches for student loans and government grants for education such as Finaid.org and Fastweb.org, Mark Kantrowitz, the economic downfall is one of the reasons for student loans to continue rising. According to his Math, the total outstanding federal student loans of Americans has reached $605.6 billion and the total outstanding balance of all private student loans
is $167.8 billion. Despite the increase of student loan lenders to 23 companies last month, most student debt of Americans are still owed to federal student loan lenders.
Despite the constant denial by the government that the recession is not over, this recession is exactly the reason, along with the inflation that has started to kick in, that college tuition now is skyrocketing. The default on student loans has now reached 20 percent because of the economic recesion. Unfortunately students are not well informed that whatever debt they are acquiring now in their 20's will be an albatross around their neck as soon as they get into their 30's and 40's. In fact, even now, you can easily find parents, whose children are almost in college, still paying towards their student debt.
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.
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