The Federal Reserve just released a report this month which states that the total amount of loans for college 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.
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.
Before anybody decides to go back to school and be bound with the most toxic debt on earth, you should ask yourself why exactly you are thinking of investing in college education. Some students go to college because they are simply repeating a pattern established in their family. Some others hope that after graduation they will be able to get a job which they couldn't get without going to school. But let's face it. The recession is already here. It will take a very long time for the economy to bounce back to the point where it was before the recession, if ever. Instead of drying off your savings and being bound to a burden of debt in the future, it is better to allocate all your time, energy and money to find alternatives to earn money without having a job.Anything is better than taking out loans for college students
Total Views: 340 | Approx word count : 434 | 09/02/2010