Is Your Student Debt Becoming a Threat to the Economy?

Ever since the 2008 financial collapse in the United States, credit-card debt as well as foreclosures on mortgages have risen dramatically. But the threat of student loan debt could the final straw that breaks the camel’s back. The financial ramifications for student loans unable to be repaid could be devastating for the U.S. economy. Americans owe hundreds of billions of dollars in student loans and if something isn’t done soon, it could cripple America’s economy.

The debt load of American students surpassed that for general credit card use for the first time in 2010 and is only going to get worse unless something is done quickly. For every three college graduates, two of them had debts before they even started their schooling averaging over $25,000 in student debt, soon to top One Trillion Dollars in federal and private loans by U.S. citizens.

It certainly doesn’t help that the U.S. economy itself has already suffered in recent years. Depressed job prospects makes repayment of those student debts even more overbearing. Students who started repaying their student loans in 2009 were hit with default rates of almost 9%.

What many students still fail to realize is that (more…)