Student Loan Debt now Higher Than Credit Card Debt Load

Paying for College
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<p>Student</a> loan debt hits record levels - Utica, NY - The Observer-Dispatch, Utica, New York</p>

<p>From the article:

[quote]
The amount of student loans taken out last year crossed the $100 billion mark for the first time and total loans outstanding will exceed $1 trillion for the first time this year. Americans now owe more on student loans than on credit cards, reports the Federal Reserve Bank of New York.

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<p>Yikes.</p>

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<p>That is pretty scary! The media frequently does pieces about students who graduate from name brand not for profit schools with huge amounts of debt and it scares the bejeezus out of us all. But I think those cases are a drop in the bucket compared to the students who drop out of no name school before the graduate, with little hope of securing a decent job and repaying their debt. And then there are the throngs of students who get sucked in by the for profits schools, again amassing huge debt with little hope of graduating, not to mention the federal grant money they receive! I read somewhere (I know, don’t believe everything you read!) that a significant portion of the enrolled students at one of these for profits universities were actually homeless people, not attending any type of classes what soever. So while legitimate student debt is a huge problem in this country that we seriously need to address, in my opinion, there is a whole other underbelly to this that is far more insidious.</p>

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<p>Credit card debt is down, which is not a bad thing. There are more workers being retrained for new industries/careers…also not a bad thing. However, there are many more delinquencies than actual defaults and that is not often reported. The Institute for Higher Ed Policy published an interesting 5-year study last spring that is worth a look. </p>

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<p><a href=“http://www.ihep.org/assets/files/publications/a-f/Delinquency-The_Untold_Story_FINAL_March_2011.pdf[/url]”>http://www.ihep.org/assets/files/publications/a-f/Delinquency-The_Untold_Story_FINAL_March_2011.pdf&lt;/a&gt;&lt;/p&gt;

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<p>I have a relative that works in the collections industry. She says a very high percentage of the student loan defaults are coming from the students who attended the online, for-profit schools.</p>