Americans owe $800 billion in credit card debt and $700 billion in car loans. Higher still is student loan debt; it has now surged past more than $1 trillion.
Just how many graduates are beginning life in the “real-work-world” saddled with significant debt? In all, more than 37 million former students still owe money on their student loans. The most recent statistics available show that the student loan default rate as of 2009 has risen to 8.8 percent, up from 7 percent in 2008.
Most 18-year-olds have no comprehension of the level of debt they are signing on for when they sign those debt loans and are then embraced with open arms into the college of their choice.
How many universities, for-profit colleges, and other post-secondary education programs have truly made plain to the students just what it means to take on thousands of dollars in debt at the age of 18? Who has explained to these students how carrying upwards of $100,000 debt or more can impact their quality of life just at a time when they are meant to be spreading their wings? These are questions that must be addressed. Colleges must be transparent. And perhaps young people may begin to question: Is a college education really the single greatest indicator of financial success over a lifetime?
Public Radio recently did a story on student debt. One of those interviewed for the story, Ricky Evans, age 32, earns close to $70,000 yearly and works in finance. Yet, he still has more than $80,000 in student loans he is working to pay off. He says, “Back then, I barely understood the interest rates.”
Another young woman, 27-year-old Beth Hansen, works full time as a middle school teacher and also holds down two other part-time jobs. Yet she earned just $46,000 last year, and still owes more than $60,000 in student debt!
Says Hansen, “I was seventeen when I signed my first promissory note…[Was] I really going to read the said promissory note from beginning to end?”
The impact of the student loan debt is far-reaching. Young people saddled with debt are putting off major life decisions like having a family, purchasing a home, and more. They don’t even have confidence in their ability to earn enough to have a stable financial future.
Students would be well served to be counseled in financial literary BEFORE being allowed to sign a loan of any significant sum. These days, however, students see the carrot, and they get a wonderful tour of the college, but no one makes sure that these same students are financially literate enough to make wise choices about loan terms, interest rates, and payback options.
About Law School Debt
The average amount of debt a law school graduate incurs is astounding. In 2011, four law schools had graduates whose average debt was above $135,000. This year, 17 law schools had graduates whose debt exceeded $135,000.
In spring 2012, Brian Tamanaha, professor at Washington University in St. Louis, wrote:
“What’s remarkable is that the majority of graduates from these law schools … do not obtain jobs with salaries sufficient to make the monthly loan payments due on the average debt. At some of these schools 90% or more of graduates with debt do not earn enough to make the loan payments on this level of debt (not all indebted students will carry the average debt).”
Student loan debt is not dischargeable. Meaning that some people could potentially be paying off debt for the rest of their lives.
Are you uncertain how to resolve your problems with debt?
Speak with an experienced debt-relief attorney at the law firm of John Hargrave and Associates. Call for a free initial consultation. 856-547-6500. You may also contact us online to schedule your appointment.
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Located in Barrington, New Jersey John Hargrave & Associates have helped people towards a fresh financial future through bankruptcy for over thirty years. We serve South Jersey, Burlington County, Camden County, and Gloucester County along with Camden, Cherry Hill, Pennsauken, Maple Shade, Lindenwold, Cinnaminson, Collingswood, Haddonfield, Bellmawr, Gloucester City, Marlton, Pine Hill, Audubon, NJ and also Philadelphia, PA. Contact us today to learn more about your options under the current bankruptcy laws. We’re here to help.