In today’s economy, many individuals are struggling with high amounts of debt. There are many types of debt which individuals can hold. One type of debt that individuals in Florida and the country as a whole are increasingly holding in high amounts is student loan debt.
This can be seen in statistics regarding this type of debt. Nationwide, there is reportedly around $913 billion in student loan debt being held. It is worth noting that, last year, the amount of this type of debt nationwide reportedly exceeded the amount of credit card debt. Thus, these numbers would seem to indicate that students are increasingly facing high amounts of student loan debt.
Unfortunately, it appears that individuals are also increasingly struggling to keep up with this debt. Reportedly, nationwide, the default rate on student loans within the first two years of payment is currently 8.9 percent. This is a nearly 2 percent increase from the previous year’s rate. This could perhaps be due to the high amounts of debt students are facing and the fact that many students are having difficulty finding work after graduating.
These numbers are troubling, given the impacts student loan debt struggles can have on individuals. Defaulting on a student loan can have major consequences for a borrower, as it can negatively impact a person’s credit and can expose him or her to harsh collection methods.
These statistics give rise to some questions. What is causing students to face such high amounts of student loan debt? Will this trend of increased student loan debt and increased default rates continue? Is so, how long? What long-term effects will these trends have on the economy? Will governments and schools start taking actions to address student loan debt issues? If so, what effects will these actions have on students? It will be interesting to see how these questions are ultimately answered.
Source: The Sun Sentinel, “8% of Florida students default on school loans,” Scott Travis, 30 May 2011