A Snapshot Of U.S. Student Loan Debt: Who, What, Why & How

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Student loans are the biggest thorn in the rear for 45 percent of millennials in their mid-20s. Oh yeah, you read right — nearly half of the nation’s 25-year-olds are shackled by their student loan debt. National Journal zooms in on our nation’s student debt troubles, answering your pressing “who, what, why, and how” questions.

The share of American students who owe their lenders nearly doubled from 2003 (25 percent) to 2013 (45 percent), NJ reports. In 1999-2000, only one percent of post-grads were burdened with more than $50,000 of debt. During the 2011-2012 academic year, that figure stood at 10 percent.

The percentage of borrowers who are tardy with their payments climbed from 20 percent from 2004 to 35 percent in 2012.

NJ notes that the rising tuition prices over the past decade, of course, contributes to these dreadful stats — but there are other variables, too: Shady, underhanded practices from conniving lending institutions. ThinkProgress calls out Corinthian Colleges (the head honchos behind Everest College schools), for example, for allegedly luring students into predatory loans:

“…Corinthian intentionally inflated its tuition charges to exceed the maximum amounts that federal education loans will cover. When students came up short as a result, Corinthian offered them alternative loans under the Genesis program that were far more expensive […] and used illegal debt collection tactics to strong-arm students.”

On top of these crooked practices, other reasons for difficulties in repayment include economic hardships and lack of education on how to properly manage student debt. “Sometimes loans are simply forgotten about in the haze of post-school transitions,” NJ added.

NJ notes that there’s a typical face to your struggling debtor — and it’s not the White student graduate with the engineering degree in hand. Black borrowers are much more likely to default on their loans, in comparison to White and Hispanic students, and tend to owe 22 percent more. Asians are in the same boat as Black debtors, but with one exception: “Defaults in the Asian group occurred after a larger portion of debt had been repaid,” NJ adds.

The high default rate among Black borrowers might be due to family members inability to financially assist their post-grad kin;  wealth in the African-American community is notoriously low. It’s not insufficient post-school income that makes one vulnerable to default on their loans per se, but poor financial support.

And if you’re a liberal arts major, forget it! Students with a degree in humanities are more likely to default on their student loans. As for business and engineer majors, payments are a breeze.

Regardless of race and socioeconomic factors, the average post-grad student owes $34,722 and has a monthly bill of $350. Quoting a new studyNJ says that the only way to combat the rising student debt burden is for lenders to disseminate flexible borrowing programs.

“Students of different abilities, making different investments, and borrowing different amounts should generally face different repayment schedules.”

These one-size-fits-all lending practices just don’t cut it.

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