From Zero Hedge / By Tyler Durden / April 26, 2012
The numeric
implications as well as the magnitude of the student loan bubble have
been discussed extensively before. Yet just like most people’s eyes
gloss over when they hear billions, trillions or quadrillions, so seeing
the exponential chart of Federal Student debt merely brings up memories
of a math lesson from high school, or at best, makes one think of
statistics. And as we all know statistics are faceless, nameless and can
never apply to anyone else. It is the individual case studies that have
the most impact. Which is why we would like to introduce you to Devin
and Sarah Stang – student loan debt slaves in perpetuity.
First, for those who are still unfamiliar with the brush strokes, here is the big picture, courtesy of AP:
The
Federal Reserve Bank of New York estimates 37 million Americans have
student loan debt, totaling $870 billion. The average balance is around
$23,000 (though that partly reflects a relatively small number of very
large balances; the median is $12,800). Only 39 percent are paying down
balances. An estimated 5.4 million borrowers have at least one student
loan account past due.
Roughly 85 percent of outstanding student
loan debt is owed to the federal government. The remaining 15 percent
that’s counted as private student debt is owed to various non-federal
lenders, ranging from banks to loan companies like Sallie Mae Corp. to
non-profits and state-affiliated agencies (under the Durbin bill, loans
from any government-funded entity still wouldn’t be dischargeable, only
those from truly private lenders).
Generally, it’s these private
loans that bring borrowers to the door of bankruptcy lawyers like
Barrett. Private student loans often lack the protections of federal
ones, and have rates that typically start higher and can shoot up. A
recent survey of bankruptcy attorneys found 81 percent reporting more
clients with student debt in recent years, and roughly half reporting a
significant increase.
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