Student loans reach $870 billion, bringing bankruptcies not jobs
USA Today reports,
The average student debt load tops $25,000 in the U.S., while the job market for recent graduates continues to struggle. More than 95 U.S. colleges report that their 2010 graduates — the most recent data available — owed on average more than $35,000, and 73 colleges reported that more than 90% of the 2010 class had student loan debt, according to an analysis by the nonprofit Institute for College Access & Success’ Project on Student Debt.
That has some economists worrying that federal student loans could become the nation’s next huge financial crisis, like the mortgage bubble that plunged the U.S. into a recession from which it’s still recovering. . . .
The Federal Reserve Bank of New York estimates 37 million Americans have student loan debt, totaling $870 billion. Bankruptcies are on the rise, with 81% of bankruptcy attorneys reporting more clients with student debts in the past few years. . . .
Graduate after graduate tells stories of owing so much money on student loans that they’re spending half of their monthly salary on the payments, which means in many cases they can’t afford rent on a place to live by themselves.
That appears to be changing attitudes toward higher education, said Andre Dua, senior partner at McKinsey & Co., a global management consulting firm that has studied the issue.
“There are increasing issues of affordability,” he said. “That’s leading to issues with trust and causing people to think: Is this worth it?”