The student loan level is now almost $1 trillion. How big a threat is it? Here is the assessment of the National Council of Consumer Bankruptcy Attorneys.
With student loan debt now topping U.S. credit card debt and few or no options available for distressed borrowers (including
unwary parents who co-signed loans and now face the loss of nest
eggs, retirement homes and other assets), America faces the very
real possibility of another major economic threat on a par with the
devastating home mortgage crisis.
The president of the association said this. “This could very well be the next debt bomb for the U.S. economy. The amount of student borrowing crossed the $100 billion threshold for the first time in 2010 and total outstanding loans exceeded $1 trillion for the first time last year because of rising college costs.”
This is serious. It will get far more serious. There is no escape from these debts. Students cannot legally walk away from these debts.
So, they go home to their parents.
Jenni Guarascio took $30,000 in loans to earn a degree in textile and apparel design. She could have gotten this training and a salary as an employees. Instead, she studied with professors who were not in the industry.
The monthly payments are $00 a month. She could not get a job that could support her. She moved back with her parents. She now has two part-time jobs. She pays $11 a month on these loans. This is suicidal. They are building up, higher and higher.
Another young woman owes $80,000. She lives with her parents. She teaches retarded children in an elementary school.
She went back to grad school. Then she will owe $100,000. She plans on a higher salary — an M.A. degree.
What happens if the school fires her and replaces her with a lower-paid teacher with no graduate degree? It’s cheaper for the school. The retarded kids won’t notice.
She has an undergraduate degree in sociology, which is useless. She had to earn a special education degree to get a job.
She wasted all that time as an undergrad, earning a useless degree.
She can’t buy a home: too much debt. No man wants to marry $100,000 in debt.
Another woman went into debt $100,000 to get a job teaching high school English. She cannot afford to pay her loans, she says. The principal is building.
She is trapped. She knows it. “Have you ever read ‘The Pit and the Pendulum’ by Poe? It’s like that.”