<p>I"ve cut and pasted in the first part of the article. Very sobering numbers.
Makes me wonder about what will be the future for these kids down the road. </p>
<p>"Total student loan debt exceeds total credit card debt in this country, with $850 billion outstanding, according to Mark Kantrowitz, publisher of FinAid.org and FastWeb.com, websites that provide information about student aid and scholarships. </p>
<p>Consumers owe about $828 billion in revolving credit, including credit card debt, according to seasonally adjusted numbers in a report on July credit from the Federal Reserve.</p>
<p>Finaid.org says it first happened in June.</p>
<p>Oddly, some students don't even know how much they owe or to whom.</p>
<p>"I'm scared to know," said Carla George, 20, of Detroit, a junior majoring in biology at Wayne State University. She knows that her mother, at one point borrowed about $10,000 through a federal Parent Loan for Undergraduate Students. The PLUS loan lets parents borrow for costs not covered by a financial aid package.</p>
<p>George estimates that she has taken out at least $10,000 in other loans.</p>
<p>"I think it's a whole bunch more," she said. "</p>
<p>If the numbers weren’t so high I’d say this is probably a good thing. I mean, wouldn’t you rather people invest more in their future than that new flatscreen TV?</p>
<p>(For the record, at the peak I had around $22k in student loans and I’ve never carried a balance on my credit cards. I figure this is the way we’d want more people to act with debt.)</p>
<p>Geez, that’s good news, not bad – it means that consumer credit is not as out of hand as it could be. People use credit cards for all sorts of non-essential stuff, like charging vacation expenses and buying flat screen tv’s; the credit card companies charge double-digit interest and tack on $30-$50 late fees when payments arrive a day late, and allow people to pay so little each month that the debt never gets paid off. Student loans are lower interest rates; amortized in a way that if a person pays the minimum required each month on time, the debt actually will get paid off in the time specified – and at least in most cases spent on something that’s got more potential long term benefits for the student. </p>
<p>The reason the college junior in the article didn’t know the amount of her total debt is that she has probably taken only SUBSIDIZED loans, so the debt isn’t due and she’s never seen a bill. She just signed the promissory notes with her financial aid dept. when she enrolled. But the system limits the amount of subsidized loans – so even if she is maxing out on staffords & perkins loans, she’s going to probably end up with a moderate loan burden – and she’s a bio major at a reputable public university, she’s probably going to be able to get a job and make the required payments. </p>
<p>The reporter who wrote the article appears to be woefully uninformed, as apparently she doesn’t know the difference between a “student” loan and parent PLUS loan. Hint: the <em>student</em> doesn’t have to pay the PARENT loan. And if the total figures for “student” debt include parent loans… well then that’s even more good news for the students. </p>
<p>I have 0 long-term credit card debt (I pay the credit cards off in full each month) - and a big chunk of PLUS loan debt. Like the student in the article, I’m not sure how much I owe – I could add things up and tell you the total I borrowed over the years for 2 kids, but since I’ve been making payments over the years, I can’t tell you what the current balance is without pulling up records. I don’t see statements because I signed up for auto-withdrawal. But I’d much rather have the PLUS loans than credit card debt. The interest is lower; it’s actually good (not bad) for my credit rating to be carrying those loans; and since my kids have graduated, there is no way I can add to that debt. </p>
<p>I would agree that many students carry far too much debt and that it is problem, particularly with private lenders – but I can’t imagine an article doing a worse job of explaining what the issues are.</p>