Photo of a character sitting on a diploma.
Student loans aren't making it to debt relief programs. CC by lumaxart/Flickr

It is probable that student loan debt will overtake credit card debt as the greatest financial encumbrance on younger people. Current students and recent graduates are obviously not surprised, but for many this comes as a shock. The cost of attending a four-year university has increased dramatically over the last 20 years, and many have had to turn to getting federal loans, bank loans or education loans from other loan lenders. The number of defaults on student loans is also going up. Student loan debt is one of the many headaches that have become part of pursuing the American Dream.

It’s hard to get through college debt free

If you or your child is going to a university soon, it is highly likely that having to borrow money is a matter of when, not if. Of students graduating with a Bachelor’s from 2007 to 2008, 66.5 percent of them had to borrow money to get through it, according to The average amount of debt was $22,656. Public university students got off lighter. Only 61.1 percent had to borrow money, and they had an average $19,839 in debt. Private schools take a heavier financial toll. Of private university students, 70.6 percent of students at private nonprofit schools and 97 percent at private for-profit schools have to take out loans. Private nonprofit graduates averaged $27,349 and private for-profit students averaged $24, 635 in debt for their educations.

You can’t discharge these loans

Student loan debt is the hardest to discharge. Credit cards, car loans and mortgages can be discharged in bankruptcy. Student loans cannot. There isn’t much in the way of debt settlement relief, either. There’s little in the way of loan modification or refinancing for student loans. There is also a higher chance of default on student loans. From 1995 on, 20 percent of all loans that entered the repayment phase were defaulted on, according to the Chronicle of Higher Education. It is also more likely if a student went to a private for profit university, or only to a two year institution, and the risk increases every year past graduation.

Education costs many dearly

Graduates have to put off the course of their lives for longer because of these things. Graduate school and even buying homes and having children are things that many put off in order to pay down student loan debt.


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