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Student Debt Delinquency At All-Time High


Student debt has just hit a grim new milestone: the number of overdue student loans has reached an all-time high, as college students fall deeper into debt and their employment prospects dim. Bloomberg reports:

Eleven percent of student loans were seriously delinquent — at least 90 days past due — in the third quarter of 2012, compared with 6 percent in the first quarter of 2003, according to the report by the U.S. Education Department. Almost 30 percent of 20- to 24-year-olds aren’t employed or in school, the study found.

Even worse, student loan debt is actually increasing after students leave college. Student debt now averages $26,600 per student, which is more than half the average salary of a college grad. And the overall landscape for college grads is darkening. Nearly half of college grads are underemployed—attempting to pay off their vast loans in an unfavorable job market—working for hourly wages in jobs that don’t require a college degree. And 37,000 advanced degree holders are doing the same.

As they work in low paying jobs, chained to debt they can’t shed, young people are delaying getting married, buying homes, and generally putting down roots. Perhaps rather than fuss over student loan interest rates, Congress and President Obama could use their time to create policy that drives down tuition costs before this bubble gets any bigger.

[Ball and chain image courtesy of Shutterstock]

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  • Fat_Man

    Kids must be given the ability to discharge student loan debt in bankruptcy.

  • Daniel Nylen

    As someone who saved for my kids’ college and has paid off my kids’ college debts, why should I have to pay off my neighbor’s kids loans too? I ensured that my kids went to cost-effective schools (having discussions with my 17 year olds about ROI and college; and why this school was okay and not that one!) My adult children are currently succeeding–so why should they be taxd to pay for their fellow students who enjoyed a several year party-fest instead of working hard and learning something useful?
    signed: becoming scrooge

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