Student loan debt has just topped $1 Trillion and is becoming a massive problem for young Americans. $1T is more than auto loan debt and credit card loan debt.
This will keep the economy from having a robust recovery and could be our next crisis.
First, this debt disproportionately affects the young. Many young Americans saddled with massive debts have to put off major purchases like a home or a car. They have to postpone things like marriage.
For those that have a job, their earnings are going to go towards paying off student loans instead of being pumped into the economy.
There will be a lot of people unemployed in this economy and will be unable to make any payment at all. And those with low paying jobs will find it a burden to pay off their student loans.
According to the Federal Reserve Bank of New York, 30% of student loan debt is 30 days late.
Statistics show that graduates earn a lot of money during their lifetime. Student loan debt is generally considered ‘good debt’. But good or bad, they still need to be paid.