Student loan debt hit a new record of $1.6 trillion during 2020, affecting people of all ages, demographics, and occupations. Unfortunately, these numbers are expected to grow as college tuition costs at both the undergraduate and graduate levels continue to rise. With a highly dysfunctional job market and rising educational requirements, many students find themselves needing an advanced degree to pursue their career goals and earn a living wage.
When faced with an ambiguous situation as such, students are left with one of two options: risk falling into a debt spiral or pass up a college education. Many consider this situation one of the world’s worst economic crises.
2020 Student Loan Debt Overview
After mortgage debt, student loan debt is one of the highest consumer debt categories in the United States. The following overview of statistics collected from a 2020 Education Data report serves to put the student loan debt crisis in perspective.
- There are a total of 44.7 million borrowers with an average of $37,584 of debt per person
- About 42.3 million borrowers have federal student loans and owe an average of $36, 520
- About 2.4 million borrowers have private student loans and owe an average of $38,819
- The average loan amount to obtain a bachelor’s degree from a public university is $30,030
- 8% of students borrowed loans to pay for undergraduate school, whereas 44.2% borrowed for graduate
- The total private student loan balance sits at $135 billion
Factors Causing Slow Repayments Among Students
Despite staggering loan amounts and millions of borrowers, the amount of existing loan balances resolved annually sits at a rate of 3%. Of those who arranged to pay back their loans from 2010 to 2012, only a little over half have substantially decreased their loan balance after five years. The rest have yet to pay down their total balances. One big, fundamental question on many people’s minds is, what’s causing slow repayments? Well, several different factors may be involved.
The two largest sources of slowed repayments is the widespread use of income-driven repayments and extended repayment terms. While these programs are designed to help by allowing borrowers to make a reduced monthly payment, loans still remain active and are subject to interest rates the longer they are left unpaid. Coupled with limited job opportunities and a global pandemic, you can imagine how difficult it must be to make minimum loan repayments.
How Student Loan Debt Affects Borrower’s Life Decisions
One thing student loan debt has unmasked is the effects it has on borrower’s life decisions. Many borrowers are forced to sacrifice significant milestones, like buying a home or a car, getting married, and having children. What’s more, the discourse around the burden of debt has discouraged many students from following their dreams, especially those seeking employment in the sciences like medical and engineering. Others, who currently borrow money or plan to, anticipate future struggles—which has proven to be extremely taxing on mental health.
Ditch Debt with the Help of Arizona Debt Settlement Lawyers
If you’ve fallen behind on repaying your student loans, debt settlement may be the best option for eliminating or reducing your debt. Negotiations with creditors can be complex and sensitive matters. For best results, it’s wise to retain a skilled Arizona debt attorney with proven experience in this area of law. The attorneys at McCarthy Law PLC have a dedicated focus on achieving our client’s goals so they can move forward towards their desired futures. It’s our responsibility to help you counter the burden of student loan debt and rebuild your financial life.
To arrange a free case review and discuss your situation with a trusted debt lawyer, call (855) 976-5777 or fill out a contact form today. We are a debt settlement firm. We help our clients negotiate with their creditors for a significant reduction in their due balance.
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