As overall student loan debt in United states reaches a staggering $1 trillion( that is 1 with 12 Zero). Average American student now owes about $28,000 USD in student loans. This is quite a huge amount. It is more than Obama’s package for kick starting economy. It is more than total debt on all credit cards issued in U.S. It is even more than amount of mortgages owed to bank be every citizen.
This could be our next financial crisis. It can be a bubble that can bust whatever economic recovery we have made so far. Tax payers can see more of their money go down the drain pretty soon.
Job market data, that has emerged over the past few months is also not very promising. Having more college graduates jobless means they will not be paying off the loans. Some students are even going back to college to acquire new skills to compete in changing job market. This is adding to their total debt burden too.
Stafford is the largest network of federally subsidized loans. It issue loans to cover college tuition fees and other education related expenses for students from middle class. It has so far issued loans to 7.8 million students.
An average student borrows $25,000 USD to cover college expenses. Students can currently get these loans at 3.6 percent interest rate. The terms for repayment are flexible and students can chose to pay back in easy installments spanning 10 to 20 years.
