The federal student loan program seemed like a great idea back in 1965: Borrow to go to college now, pay it back later when you have a job. But many borrowers these days are close to flunking out, tripped up by painful real-life lessons in math and economics. Surging above $1 trillion, U.S. student loan debt has surpassed credit card and auto-loan debt. Average student loan debt recently topped $25,000, up 25% in 10 years. And the mushrooming debt has direct implications for taxpayers, since eight in 10 of these loans are government-issued or guaranteed. Economists say the student debt explosion jeopardizes the fragile economic recovery, increasing the burden on taxpayers, and might even be setting the stage for a new economic crisis. “This could very well be the next debt bomb for the U.S. economy,” says William Brewer, president of the National Association of Consumer Bankruptcy Attorneys. “As bankruptcy lawyers, we’re the first to see the cracks in the foundation. We were warning of mortgage problems in 2006 and 2007. The industry was saying we’ve got it under control. Nobody had it under control. Now we’re seeing the same signs of distress. We’re seeing huge defaults on student loans, and people driven into financial difficulties because of them.” President Barack Obama has offered a raft of proposals aimed at fine-tuning the system and making repayments easier. Yet the predicament of debt-burdened former students has failed to generate much notice in the GOP presidential campaign. Instead, the candidates are dismissive of government student loan programs in general and Obama’s proposals in particular. Get the full story from The Associated Press here.
Today’s poll question: How much student debt do you have?
