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December 30, 2013 By Stephen Kass

Are Student Loans the New Debt Epidemic?

Student debt overwhelms millions of recent college graduates and their parents

Many recent grads and their families are being overwhelmed by a serious student debt problem. American student loan debt has ballooned to more than $1 trillion, with more than 7 million borrowers in default. The United States leads the world in abandoning students to bear the enormous burden of educational loans.

This problem isn’t unique to the United States. But the level of debt incurred by student borrowers in the U.S. is higher than anywhere else on the planet. In stark contrast, Argentina, Sweden, Norway, and Iceland offer students college education at no charge whatsoever. The UK shows concern by not requiring their students to make payments until they’ve earned the equivalent of approximately $33K per year, and even then only collect 9% of their earnings above the base amount of the debt. Many people from other countries are amazed that the American higher education system is even sustainable under conditions so adverse to students.

The price of education

The average student debt for a 2013 graduate is $35,200. Many of us want to pursue the American dream of a college education but in order to pursue it, we must take out loans to finance 4 or more years of college.

Average tuition, room and board for in-state students at four-year public schools is about $16,000; at four-year private schools, it’s approximately $40,000. When a student attends 4 years of college at a public institution they are most likely to pay at least $64,000 if they have no grants and do not live at home. Costs at the most prestigious post-secondary institutions are nearly $60,000 a year. The U.S. Department of Education is the largest provider of student aid in the nation, offering more than $150 billion per year in grants, loans and work-study funds to 15 million students.

It’s so easy to apply to schools of your choice and initiate a debt process that’s simple to begin and seems so right, yet may grow to become the greatest financial burden of your lifetime.

Living with Student Debt

Students graduating from college are plagued by mounting installment debt. Student loans, credit card debt and car loans contribute to the burden. When you can’t pay your loans it can be overwhelming. Those who want to minimize debt at a later stage in life need to learn debt management techniques early on.

Not all former students take advantage of loan consolidation. When you consolidate your student loans together, you can often pay the aggregate amount of debt back over a longer period of time and at a lower monthly rate. Those who qualify can get income-based repayment, which helps those with lower income levels.

Student loans will be there until you have paid them off, unless you get debt forgiveness. Failure to pay back your loan can have many negative consequences. A likely result is a reduction in your credit rating. This might cause your credit card interest rates and monthly payments to soar. With a lower credit score, it may be more difficult to find a job or a place to rent or buy.

When you’re unemployed or have an extremely low income for the number of people in your household, you may qualify for deferment for forbearance status, enabling you to receive a temporary delay in making your payments. Just as importantly, your credit score will also be protected during this time.

By consulting with attorney Diana Revzin Esq, you may learn how to make the forbearance and forgiveness process work for you, and turn what seems an overwhelming student debt burden into a manageable one.

Filed Under: Bankruptcy News

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I highly recommend using Steve Kass as an attorney. I had a serious issue with the IRS involving real property, a company I built and sold, and multiple years of taxes which were unfairly and incorrectly assigned to me and had been hanging over my head because my efforts to negotiate...

Sean

Mr. Kass and his professional office staff helped me through every step of the way which without his expert guidance would not have been successful. Mr. Kass was able to a access my situation quickly and advise me. I highly highly recommend making an appointment with Mr. Kass

Vivian

I consider myself very lucky to have found Stephen B. Kass last year. We were drowning in credit card debt and were on the verge of filing bankruptcy. Mr. Kass was able to negotiate with all of our creditors and reduce the balances SIGNIFICANTLY. Within one year we are debt free

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Stephen and legal staff provided superb, accurate, and detailed financial analysis. Stephen has an exquisite knowledge of financial planning and tax law, and was able to make tailored, individualized recommendations that have helped me tremedously with regard to long-term financial planning and resolution of tax issues. Office staff are skilled

John

I had a great experience with Stephen Kass. He took legally complicated case from another attorney and resolved it. Years later, when his assistance was needed, he responded right away, remembering every detail of the case. He is an expert in his field and great person to work with.

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