Wednesday, August 28, 2019

Over 44 Million Americans Carry Student Loan Debt Totaling $1.5 Trillion

This week, my youngest son, Brian, started his university studies. He had taken a "gap year" after graduating from high school in May 2018 -- working a job -- and is now embarking on his higher education coursework. I recently read that 20 percent of young Americans plan to opt out of going to college. The 2019 Young Americans and College Survey by The Harris Poll shows that nearly 73 percent of young Americans planning to go to college say they would choose a less expensive school to avoid going into debt.

Currently, 46 percent of young Millennials say they are paying for their educations with student loans. About a third of Millennials say they expect to still be paying off their student loan debt into their 40s (and 15 percent expect to be doing so after reaching 50 years of age). Also, about 18 percent of Millennials say they have delayed moving out of their parents' home (31 percent), buying a home (47 percent), having children (21 percent), and saving for retirement (40 percent) because of student loan debt.

According to the poll, when asked what advice they might give to their "18-year-old self" regarding college, 19 percent recommended working to earn money while in college, and 8 percent said to "take the bare minimum of student loans."

 As of June 2019, over 44 million adult Americans (roughly one-sixth of the U.S. population older than age 18) currently carry a federal student loan and owe $1.5 trillion in federal student loan debt, plus an estimated $119 billion in student loans from private sources that are not backed by the government. Its been reported that by 2023, nearly 40 percent of student loan borrowers are expected to default on their student loans. "Default" is when a person has not made a payment toward their education debt in roughly a year, triggering it to be sent to a third-party collection agency.

Back in the 1980's, I obtained two Bachelor of Arts degrees with a total student loan debt of around $20,000. I paid that off over the course of ten years following graduation and never went into default. Some young people don't realize that you must repay your federal student loans even if: (1) you don’t complete your education; (2) can’t find a job related to your program of study; or, (3) are unhappy with the education you paid for with your loan. You also cannot claim that you have no responsibility for repaying your loan because you were a minor (under the age of 18) when you signed your promissory note or received the loan.

What about bankruptcy? You may have your federal student loan discharged in bankruptcy ONLY if you file a separate action, known as an "adversary proceeding," requesting the bankruptcy court find that repayment would impose undue hardship on you and your dependents. You must declare Chapter 7 or Chapter 13 bankruptcy and demonstrate that repayment would impose undue hardship on you and your dependents. This must be decided in an adversary proceeding in bankruptcy court. Your creditors may be present to challenge the request.

Among 2018 college graduates, 69 percent took out student loans, and they graduated with an average debt of $29,800, including both private and federal debt. The average monthly student loan payment is $393.

From Him, Through Him, For Him (Romans 11:36),

Paul J. Staso
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