Federal Student Loan Debt
According to the Federal Reserve, student loans (federal and private) totaled almost $830 billion in June 2010. There is $605.6 billion in federal student loans and $167.8 billion in private student loans outstanding. It’s estimated that $300 billion in federal student loan debt occurred in the past 4 years.
For the first time in history, in 2010 student loan debt in the U.S. has surpassed U.S. credit card debt. 1 in 14 graduates who started paying their federal student loan between 10/07 and 9/08 defaulted on their loan debt by 9/30/09.
For profit colleges have the highest percentage of student loan debt and the highest average debt. The average debt for a 4 year public college is $20,200, for a 4 year private non-profit college its $27,650 and for a 4 year private for-profit college it’s $33,050.
The national average debt for seniors graduating with loans has increased from $18,650 in 2004 to $23,200 in 2008.
Over 40% of college graduates don’t pursue a graduate education because of the amount of money they owe in student loans.
Since 1993, the number of students graduating with at least $40,000 with student loan debt has increased 10 fold.
Being saddled with a big student loan after graduating is tough, especially if you have a job that pays less than what you expected. However, when it’s time to start paying the loan back, your lender will not care about your salary or situation. You lender expects for you to pay the money back based on the terms you agreed to. If you don’t pay it back, you face serious consequence that will affect your ability to attend graduate school or buy a car and/or home.