US Lawyers' Group Warns of Accumulated Student Loan Debt

Washington, Mar 14 (IANS/EFE): The National Association of Consumer Bankruptcy Attorneys warned of the danger posed by the accumulated student loan debt in the US.

A recent report from NACBA underlines a situation that the US Federal Reserve Bank of New York confirmed last week, namely that for the first time in US history the volume of student loans exceeds credit card debt and automobile purchase debt.

NACBA members said they are getting more and more young customers with problems paying off the loans they took out to be able to pay for their university studies.

The average graduate of a public university has a debt of around $20,000.

Family income, aid and scholarships, as well as the state investment in higher education are no longer enough to meet the rate of increase in college education costs, the NACBA report says.

Also, ratings agencies like Standard & Poor's and Moody's have sounded the alarm about the risk of the student-debt bubble blowing up.

The percentage of Americans ages 18-34 beginning their college studies rose during the 2008-09 recession at one of the fastest rates in recent decades, according to figures from the Pew Research Center.

High unemployment led young people to become indebted and reduce their participation in the labor market to pursue college studies in the hopes of finding better-paying jobs in the future.

According to Pew, the employment rate among people 18-34 is the lowest in the past 60 years.

The recent unemployment data from the Labor Department shows that people with a college degree have an unemployment rate of about 4 percent in recent months, substantially below the national average of 8.3 percent.

Those figures imply that there is a magnet drawing young Americans to go to college despite the fact that the cost of education has risen by 130 percent since 1988, far outpacing the increase in median income.


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