The Mounting Problem of Student Loan Debt

There is an increasing emphasis on obtaining higher education in America, but there is little emphasis on providing it to students for free. The demands of employers have made it so that many students are taking out loans against their own credit, and such loans are encouraged by both the educational institution in question and the school that provides the services. While this is a decent service to be offering students in need, especially in such a deflated economy, there are some problems, and they are all strongly related to that deflated economy. The primary problem is that the recipients of these loans are unable to repay their debts in a reasonable amount of time, either because they are unable to find a job, or they cannot find a job in their field. Either way, they find themselves making far less money than they intended, which tends to have some rather detrimental effects. That being said, a solution needs to be found, though there is likely not one on the horizon.

A Growing Epidemic

According to Statistic Brain, 60 percent of individuals who attend college take out a loan in some form to pay for their education. They could be taking it out to address the entire cost of their schooling, or they could be doing so to pay for books. Either way, it results in a large debt that may or may not be payable. Currently, approximately 14 percent of outstanding borrowers have to deal with an outstanding loan, which tends to lead to other issues. For example, those who cannot pay normally find themselves harassed by creditors, or, if they do hold a job, they find themselves paying unwillingly as their wages are garnished. This tends to leave the borrower in poverty, or at the very least, struggling financially.

The direct recipient of the loan is not the only one that has a problem. If there is a co-signer, they too will be sought out for the balance of the loan, and their wages too will be garnished. It is of course understood that the loans need to be repaid, but until something is done to fix the economy, it is unlikely that there will be a full solution. This is especially true since as Mondaq states, student loans cannot be vacated as a result of a bankruptcy declaration.

No Solution in Sight

It is estimated that the average individual who has completed college owes somewhere in the neighborhood of $40,000 with a multi-year repayment plan. In fact for many, it is a life sentence, and they may never see the end. The truth is that many of these students were never informed that the repayment plan would be quite this rough, or that their chosen job market would be so difficult to find employment in. It could be argued that students need to ‘do their research’ before making such a financial obligation, but it is also clear that these institutions are taking advantage of the shortsightedness of today’s youth.

If your mounting student loan debt is keeping you up at night, contact our attorney at Van Horn Law Group for a free case evaluation.