If you’ve ever been to college or know someone who has, the subject of student loans has certainly come up at least once. Over the years, as recessions, economic slowdowns, and politics have shifted the burden of tuition from taxpayers to students, the price of a college education has skyrocketed. The cost of higher education in America is beyond the means of most citizens without help from student loans. Years of steadily increasing student loans have finally caught up with us. According to recent reports, the amount of outstanding debt held by United States citizens totals $1.2 trillion.
On average, American students graduate with $26,000 in student loan debt. That amount may seem reasonable, given that student loans are typically paid off over years or decades. The problem is student loans accrue interest over those years. So what started as a reasonable amount may end up costing the student two or three times the initial amount owed. The student loan crisis, which some have called a coming apocalypse, hits people at every stage of life.
It may be tempting to view the student loan crisis as a recent phenomenon, but Forbes Magazine recently debunked that myth. According to the publication, 16 percent of the $1.2 trillion of outstanding student loan debt is held by individuals over the age of 50. These individuals are in particular danger, because they are approaching retirement age while still carrying loan debts that often date back to the 1970s or 1980s, but sometimes representing loans taken to help their children through college. People who forgot about their loans or simply chose not to pay them will no longer have that option once they receive Social Security. Since 2001, the Federal Government has been able to garnish as much as 15 percent of social security payments to repay outstanding student loan debts.
Once a loan is taken on, it can not be shaken no matter how many years pass since the borrower was a student. Student loan debts cannot be discharged through bankruptcy unless they were taken out prior to 1976. If the loan was cosigned and the initial borrower dies, the cosigner becomes responsible for any outstanding loan debt. In some cases, not even death can offer escape from outstanding student loan debt.
There may be some hope for those already carrying student loan debt. In July 2014, new rules took effect for what constitutes a reasonable and affordable monthly student loan payment. The new rules take into account family size as well as income and expenses.