If you are over your head in education-related debt, you are not alone. In fact, one-third of millennials indicate that instead of going to college, they wish they had joined the work force. What is the problem? Student debt.
A recent Wells Fargo study surveyed 1,414 millennials between the ages of 22 and 32. Of those respondents, more than 50 percent of them financed their education through student loans.
In fact, student loans reached the $100 billion mark for the first time in 2010. According to Forbes.com, student loan debt now exceeds credit card debt in the country, which is at approximately $798 billion. Research from the New York Federal Reserve indicates that delinquencies are also on the rise. The number of borrowers who are at least 90 days late on student loan payments has risen to 11.7 percent in 2013 from 8.5 percent in 2011.
The problem is that in this economy, a college education does not buy a high-paying job. Therefore, it becomes more difficult to pay off debt that has accrued from higher education. Moreover, a report from the National Association of Consumer Bankruptcy Attorneys notes that the educational debt problem can have a bad impact on a good economy. This is because young people with significant debt often delay major life events such as purchasing a car or buying a home. The issue is affecting home ownership in the country. Census data shows that approximately 6 million Americans ages 25 to 34 lived with their parents in 2011. This was a large increase from the 4.7 million in 2007.
Another issue for these scholars is lack of financial education. The Wells Fargo survey found that 79 percent of millennials think finance management should be taught in high school. For example, students might benefit from lessons regarding basic investing, how to save for retirement and how loans work.
While it is very difficult to address student debt through the standard bankruptcy options, the good news is that other unsecured debts can be eliminated through the Chapter 7 process. The debt-reducing methods can help address other liabilities, alleviating stress and permitting scholars to focus on paying back loans.
While a college degree may do serious damage to students' finances, an attorney can help those struggling with significant debt move forward and develop better financial habits for the future. To learn more, speak with a qualified bankruptcy law attorney in your area.