Is a student loan debt crisis brewing?

A new survey looks at the growing student loan debt crisis in the nation.

Wed, Feb 08 2012 at 7:26 PM

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Education, Economics, Save Money

Photo: zilinsky/Flickr

When the housing bubble burst, the nation’s economy went into a tailspin. While we are still slowly recovering from the affects of the housing crisis, another financial crisis may be brewing. A new survey and report published by the National Association of Consumer Bankruptcy Attorneys (NACBA) looks at the possibility of student loan debt crisis.

The survey included responses from 860 bankruptcy attorneys and the results are actually quite startling.

48 percent of those attorneys surveyed have seen a significant increase in potential clients with student loan debt over the past three to four years
23 percent of those surveyed have seen their student loan related case loads increase by 50 to more than 100 percent
95 percent of the attorneys said that only a few of their clients will have their student loan debt discharged due to undue hardship

Essentially, bankruptcy attorneys are seeing more clients with student loan debt and the vast majority of these clients will still be responsible for their student loan debt after bankruptcy. For those that have the bulk of their debt tied up in student loans, bankruptcy will offer little to no financial relief.

The news gets worse, though, student loan debt is up over the past few years as well. Perhaps part of the rise in student loan debt can be attributed to unemployed adults returning to school to boost their skill sets in hope of getting another job. Another reason could be that the economic recession ate through the savings parents had set aside for their children’s college costs.

Regardless of what is causing the average student loan debt to rise, it is. The cost of a college education is out of reach for so many families unless they choose to take out a student loan and so that is exactly what these families do, take out student loans. But if the times get tough, the student loans will still need to be repaid.

If you are attending college in the fall or sending your high school senior off to university, heed the data presented in this report and really take the time to decide if a student loan is a viable option for you or your loved one.

Download the entire report now, The Student Loan “Debt Bomb”: America’s Next Mortgage-Style Economic Crisis? (PDF)

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Comments: 2

Anthony Eller Apr 19 2013 at 2:34 PM

“ Please Remember all ideas have merit! What's your's? The main problem right now is President Obama and the Congress are not willing to do anything. The government is making so much money $34 Billion off the backs of our students this year alone! We need solutions right now! My program cuts through a lot of the red tape associated with the way our government works. It helps put our tax dollars back in the hands of small business where it is needed not giving tax breaks to companies like GE who

.... More

actually received a refund? while sending jobs and their money off-shore! How is this allowed to happen? We need a jobs in the small business sector. Have you driven down the street and seen how many small business are being taken out of the market place by the Wal-Marts of the world...... There are other simple things can be done add a minimum payment warning on all student loan statements which is"now law" to include on all credit cards statements. A student loan debt clock ticking away every where you turn put in the President and Congress face everyday so they can't say they didn't know! There are young companies that offer services to help payoff loan quicker StudentLoanHero please google them they started this FREE service to Student! Solutions...Solutions... Solutions..... Not Just talk! Follow the money........ if you want to see why this crisis is not being fixed Please google ProjectTuitionReimbursement Please read several post If you like comment and tell your friends and you don't it comment and tell why