Student loan defaults are soaring throughout the United States, with many predicting student loan debt is likely to lead to another major financial crisis. Although loan default rates are highest among student graduates of for-profit schools, the overall number of borrowers who default within two years of their loans becoming due has risen a full percentage point.
The number of students in default is troubling, especially with more than a trillion dollars in student loan debt outstanding in the United States. Many of the young people who face financial hardship have turned to bankruptcy, with an estimated 17 percent of people in bankruptcy reportedly having student loan debt. Unfortunately, individuals who file Chapter 13 could actually end up owing more on their student loans after the bankruptcy than they did prior to filing. A bankruptcy lawyer in Las Vegas should be consulted by those individuals with student debt to determine if bankruptcy is the proper course of action and for help making sure bankruptcy reduces debt problems.
As Many Students Default, Congress Considers Bankruptcy and Student Loan Issues
CBS News discussed the rising default rate, reporting that 10 percent of borrowers default on student loans within two years after college and 14.7 percent have defaulted by the end of three years. For students graduating from for-profit institutions, 13.6 now default within two years and 21.8 default within three years.