Student debt crisis threatens US economy
A series of independent studies and reports at various levels are jolting Americans out of their sense of lull over a looming crisis that has been in the offing for quite some time now, but was largely ignored. The growing student debt in colleges and universities across the nation seems to be headed in the direction of the massive foreclosure crisis, going by recent data released by the U.S. Department of Education.
The report shows that the national cohort default rate on federal student loans is 7 percent for borrowers who entered repayment in 2008, which is comparable with the default rate for credit cards (8.8 percent) and home mortgages (9.1 percent). In fact, earlier this year it came to light that the total amount outstanding on student loans was $875 billion, which actually exceeded the amount that Americans owe on their credit cards.
Another report from the Project on Student Debt – an initiative of the non-profit Institute for College Access and Success – indicates that college seniors graduating in 2009 had an average of $24000 in student loan debt, marking a 6 percent rise from the previous year. These figures, however, are based only on data reported voluntarily by public and private non-profit four-year colleges and the actual average is likely to be significantly higher when one takes into account many for-profit institutions, where student loans are typically higher.
http://www.ibtimes.c…-us-economy.htm
Join the conversation and have a little fun at Capitalstool.com. If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.
