Credit card debt has fallen behind student loans when it comes to the number one debt. While individuals are paying down their credit card balances in the aftermath of the financial crisis, college costs continue to rise. Many think this is happening because there has been less consumer protection. It isn’t really worth getting student loans anymore with college costs being so high. A bachelor’s degree isn’t even needed for the fields growing the fastest right now. Source for this article – Student loan debt exceeds credit card debt as college costs rise by Personal Money Store.
More student loans required with increasing college prices
Americans owe about $ 826.5 billion in revolving credit, as outlined by June 2010 figures from the Federal Reserve. Americans have $ 829,785 billion in student loans according to a Wall Street Journal article showing a report from FinAid.org. The Journal talked to the publisher of FinAid.org and FastWeb.com, Mark Kantrowitz, who said that in just the last four years there has been $ 200 billion taken out in student debt. There is a higher rate of unemployment and college costs more meaning parents borrow to get every little thing done.
Student loans lack consumer protections
Credit card debt is usually safer than student loan debt. Student loans nevertheless stay with a person, even through a bankruptcy. And some student loan repayment terms inflict harsh penalties for borrowers who miss payments. According to Student Loan Justice, federal student loan borrowers have none of the consumer protections that come with credit card debt, including statutes of limitations, truth in lending laws, state usury laws and fair debt collection statutes. As outlined by the same group, student loans are “an inherently predatory lending system that succeeds when the students fail.”
Family finances take a hit with college costs
Student loan debt is rising along with college costs. Bank Investment Consultant reports that average total college costs for 2009-2010 were $ 35,636 at private universities and $ 15,213 for in-state students at state colleges. An increase of 5 percent has happened each and every year. Many top institutions have announced that total charges will top $ 50,000 within the current academic year. This is too much for families trying to use all of their savings and spend income also to pay for school.
Bachelor’s degrees net poor returns
Because student loans are increasing, people are concerned that getting a degree doesn’t even have a point anymore. By 2012, only half of those who started a bachelor’s degree program in 2006 may have graduated, reports the New York Times. Only seven of the 30 jobs that are supposed to grow fastest within the next ten years even need a bachelor’s degree, reports the Bureau of Labor Statistics. You will find also 10 of the top growing job categories, 2 of which need degrees. 15 percent of all mail carriers have bachelor degrees as shown in a 1999 federal study discussed in the Times by Richard K. Vedder who is the founder of the Center for College Affordability. He was quoted saying:
“Some of them could have bought a house for what they spent on their education.”
Wall Street Journal
blogs.wsj.com/economics/2010/08/09/student-loan-debt-surpasses-credit-cards/
Bank Investment Consultant
bankinvestmentconsultant.com/bic_issues/2010_8/college-cost-gone-wild-2668047-1.html?zkPrintable=1 and amp;nopagination=1
New York Times
nytimes.com/2010/05/16/weekinreview/16steinberg.html
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