Student Loan Debt
March 7, 2012 by staff
Student Loan Debt, Could increasing student debt be the economy’s next ticking time-bomb? According to a recent survey, conducted by the National Association of Consumer Bankruptcy Attorneys, it could very well be.
Of the 860 bankruptcy attorneys surveyed, nearly half of them observed a “significant increase” in potential clients who seek their help due to student loan debt over the past few years.
For students with accumulated college debt, this is a scary number.
“I’m pretty concerned (about my student loan debt),” said Mary Giardina, an OSU student. “After I graduate, I’m going to be a schoolteacher, and I’m not going to have that much money to pay it off in the future.”
Third year law student Michael Batchelder sees this as a significant national problem, unspecific to OSU.
“The problem reaches far beyond just school,” he said. “These debts are even prohibiting students from doing things independent of academia such as buying houses after graduation.”
The U.S. Department of Education’s most recent data shows that the national default rate for student loans was 8.8 percent in 2009, the latest year such information is available.
To put that into perspective, that means that out of the more than 3.6 million borrowers from 5,900 schools who entered repayment during the one-year window in which the department focused, more than 320,000 of those students defaulted.
In 2008, 7 percent of students defaulted on their loans, while that figure was 6.7 percent in 2007 and just 5.2 percent in 2006.
“These hard economic times have made it even more difficult for student borrowers to repay their loans, and that’s why implementing education reforms and protecting the maximum Pell grant is more important than ever,” said U.S. Secretary of Education Arne Duncan in a press release. “We need to ensure that all students are able to access and enroll in quality programs that prepare them for well-paying jobs so they can enter the workforce and compete in our global marketplace.”
In Ohio, the percentage of students defaulting on loans is a little lower than the national average, with 8.2 percent of students defaulting on their loans in 2009. But the state ranks seventh nationally in terms of the amount of money ($27,713) students are borrowing to go to college.
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