The mounting debt from student loans is quickly becoming a national problem in the US. The statistics are staggering.
The Huffington Post: Bernanke's son's case is a high-profile example of what is a nationwide epidemic: mounting debt from student loans. College graduates from the class of 2010 carried an average of $25,250 in student loan debt, and the nation's total student debt almost reaches $1 trillion: This is a 14-fold increase from 15 years ago and dwarfs the country's credit card debt, which is just shy of $800 billion.we've seen recently comes from these increases in federally held student loans.
|Student Loans Held by the Federal Governemnt|
The borrowers under these federal programs qualify for Income-Based Repayment, a system that allows repayment over an extremely long period of time - similar to a mortgage but with no assets to back it up. There are also provisions that allow for partial principal forgiveness.
Up-to-date student loan default rate data is hard to come by but the trend is not good.
|Source: The NY Times|
Update: here is an interesting perspective on the issue of student loans from someone who is a borrower.