Everyone always jokes about being a ‘broke college student’ and how college is way too expensive. Well, this joke is surely a reality for most college students, and it’s getting worse and worse each year. According to a new study, student loan debt has increased to nearly $1.5 trillion in the United States.
According to a report from Bloomberg, U.S. student loan debt reached up to $1.465 trillion last month, which is double the amount of outstanding debt at the official end of the recession in June 2009, which was $675 billion. The report also states how it’s becoming increasingly difficult for borrowers to pay off their loans.
The reports say how students who took loans out in 2012 have had a more difficult time paying them off compared to students who received loans before 2012. It’s not only impacting younger generations but older ones too. Bloomberg states that American borrowers 62 and older owed a total of $62.5 billion in federal student loan debt as of September 2018.
The amount of people who owe money is definitely a scary number. More than 2.7 million people with student debt owe more than $100,000, and about 700,000 of them owe more than $200,000.
How Will This Effect Our Society?
According to the Bloomberg report, about 90 percent of loans are backed by the U.S. Department of Education (DOE), which means that if too many people begin defaulting on their loans and not paying them off, it could prove a significant blow to the economy. Concerns are arising, the increase of student debt in America could possibly contribute to another recession.
It was reported back in July that Secretary of Education Betsy DeVos had proposed changing a student loan forgiveness program introduced by President Barack Obama. But DeVos’ proposed plan was denied by a federal judge in September.
What Is In Store For The Future?
Recently, The New York Times reported that the DOE will cancel $150 million worth of federal student loans, which will impact 15,000 federal loan borrowers. The future may be unclear for student loan debt for now, but this is just a small step in the right direction.