December 28, 2012 /24-7PressRelease/ -- With tuition costs skyrocketing and the economy still lagging, the educational debt load has been on the rise for each successive graduating class, and Tennessee is no exception.
Student loans surpass credit card debt in U.S.
Student loan debt in the U.S. exceeded the $1 trillion mark in 2011, and it is still growing steadily. According to an NBC report, Americans now owe more for student loans than for all of the nation's credit card debt combined. Many experts fear how these unprecedented debt levels will affect the long-term financial outlook of today's college graduates, speculating that student debt could trigger the nation's next major financial crisis.
In Tennessee, more than half of students who graduate from college have student loan debts, according to a recent report by the Project on Student Debt, a nonprofit independent research and policy organization. In its October 2012 report, the PSD found that 53 percent of people who graduated from college in Tennessee in 2011 had student loans, with an average educational debt load of $20,703.
As huge as the educational debt problem has become in Tennessee, it is even worse in other parts of the country. Nationwide, two-thirds of college seniors graduated with student loan debt in 2011, owing an average of $26,600 each. Parents of college students are also taking on more debt; Forbes reported recently that parental borrowing is up 75 percent since the 2005-2006 academic year, with parents taking out an average of $34,000 in student loans.
Many graduates overwhelmed by student debt
Both in Tennessee and elsewhere, often the burden is simply too much to bear. More people are defaulting on their student loans than any other type of debt in the U.S., according to the most recent quarterly release from the Federal Reserve Bank. At least 11 percent of student loan balances are at least 90 days overdue, according to the report -- the highest default level since the Federal Reserve began tracking student loan defaults in 2003. As Forbes reported, the actual delinquency rate is likely much higher because loans that are currently in grace periods or deferment are not counted toward the delinquency rate.
A recent survey by the National Association of Consumer Bankruptcy Attorneys revealed that 81 percent of bankruptcy attorneys have seen a spike in the number of people with student loan debt looking for relief. Although student loans are typically not dischargeable during bankruptcy like many other debts are, bankruptcy can still offer relief in many cases by eliminating other types of debt such as credit card debt or medical bills. Thus, while student loan debt may remain after bankruptcy, the payments may be much more manageable if other debts have been discharged.
In many cases, it is even possible for people in Tennessee to file for bankruptcy without forfeiting any of their assets. People struggling with unmanageable debts in Tennessee should contact an experienced bankruptcy lawyer to find out about their legal options and discuss whether bankruptcy may be a good fit for their individual circumstances.
Article provided by David F. Cannon
Visit us at www.nashvillebankruptcylaw.com
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