Orantes Law Firm
The student loan bubble keeps growing: debt approaches $1 trillion
The issue of student loans and the debt college graduates carry after they graduate has been a hot topic ever since the worldwide financial crisis of 2008. While steps are being taken to recover from that meltdown and though things seem to be getting better, it is still an uneasy economic time in Los Angeles and, indeed, all across the country.
Still, student loan debt is rampantly running out of control. A recent federal report shows the depth of the problem. According to the report, outstanding student debt in the U.S. has reached $965 billion, surpassing even the amount of outstanding credit card debt in the country. The report also showed that in the third quarter, the total debt increased 4.6 percent when compared to the second quarter.
And here’s another amazing statistic: since 2007, outstanding student loan debt has jumped an astounding 56 percent. During that same time frame, other forms of debt — car loans, mortgages, credit card debt — dropped 18 percent.
Clearly there is a major problem here, and it will be up to lawmakers to address the viability of allowing college graduates to discharge their outstanding student loan debt. Currently, it is nearly impossible for such debt to be discharged through bankruptcy. It can happen, but only in rare cases where there are extreme circumstances.
That doesn’t mean bankruptcy can’t help a graduate who is struggling to deal with his or her student loan debt. Declaring bankruptcy could clear out other outstanding debts, making it easier to pay your student loans. You could also restructure your payment plans to make monthly expenses a bit easier to handle.
Source: CBS News, “Student loan debt nears $1 trillion: Is it the new subprime?,” Jill Schlesinger, Nov. 28, 2012