20 Mar Student Loan Debt In Minnesota
Bloomberg reports that approximately 10% of the outstanding student loans were in default during the third quarter of 2011. This represents a lot of student loan borrowers who are struggling to pay their student loans while paying for all of the other essentials of life. I am sure if 10% of all loans are in default, a lot of other student loan borrowers are close to default. Student loan debt is currently near 1 trillion dollars in the United States.
This level of debt is a ticking time bomb that will need to be addressed through legislation, to provide some form of relief to student loan borrowers. The relief will have to include some form of debt forgiveness or the ability to discharge some student loan debt in bankruptcy. As it stands right now student loan lenders do not have any incentive to work with their borrowers, because they do not face any chance of having the loans reduced through bankruptcy. If lenders had to face some risk of their student loans being discharged they would be more likely to negotiate with individuals who are having a hard time keeping up with their payments.
I am sure some of the borrowers who are behind on their student loans are thinking they did not make the right choice when choosing to incur the debt in attending school. The people in the worst shape are individuals who went to school and are currently out of work, or not working in a field that allows them to make their student loan payments. These individuals tend to be younger and may have just graduated from their chosen school. It is also important for individuals to look closely as the value of their education and how it will impact their ability to get a job. Student loan debt does not go away, so once you incur the debt it is with you until it is paid off, unless the law governing student loans is changed.