A recent report by the Institute for Higher Education Policy has shed light on the burden that student loan borrowers face. The institute went further than other research by looking at students who had fallen behind on their payments without defaulting, as opposed to focusing solely on gathering information on those students who had actually defaulted on their loans. The resulting report found:
- For every student who defaults on a loan, at least two more fall behind on their payments.
- Two out of five borrowers were delinquent at some point in the first five years after beginning to repay their student loans.
- Almost a quarter of these borrowers used an option to postpone payments in order to avoid delinquency.
- 35% of student loan borrowers who started repaying their student loans in 2005 were able to pay them back in full, on time.
The study was conducted based upon data from five of the largest student loan agencies in the U.S. It is expected that student borrowing will continually grow. According to an annual report from the Project on Student Debt, the average student loan debt of college seniors who graduated in 2009 was up 6% from the previous year. The total student debt in the U.S. is estimated to be approximately $896 million, according to the publisher of Findaid.org and Fastweb.com. This is more than the amount of credit card debt in the U.S.
Overwhelming student debt is one of many reasons that a borrower may run into financial difficulty. Though student loan debt typically cannot be discharged through bankruptcy, eliminating or restructuring your other debt may free up your income to pay off your student loans. To discuss this important matter with a professional who understands the ins and outs of student loans and bankruptcy,
contact a Long Island bankruptcy attorney at Jacoby & Jacoby. The firm is here to help and guide you.