Education has always been sold as a key toward upward economic mobility. As more and more people followed that advice and pursued higher education, the number of people carrying heavy student loan burdens has increased to the point where the total value of student loans is now greater than the value of credit card debt.
The Washington Post reports that Americans currently hold $870 billion in student loans and only $693 billion in credit card debt. With student loan debt surpassing credit card debt, we may witness a new era of debt difficulties for Americans. When people have become overwhelmed by debt in the past, bankruptcy has always been an option to help people secure a fresh start.
Currently, it is nearly impossible to discharge student loan debt through the bankruptcy process. This may have to change if the trajectory of student loans as a portion of debt carried by most people continues on its upward trend.
A key element as to why this debt trend has emerged may be the economic downturn that began in 2008. The job market has been difficult for most people, college graduates included. Add this to the increasing costs of college and more and more people are left carrying more student loan debt with no way to make any headway on their principals.
The population segment that is bearing a high portion of this debt burden -- young people attempting to build their lives post graduation from college -- are those that we would normally expect to begin purchasing cars, homes and other big ticket items. If that segment of the population lacks serious purchasing power, it may have negative impacts on our overall economy.
If you are facing a difficult debt situation and student loans are part of the equation, discussing your situation with an experienced bankruptcy attorney may help you understand what options are available to help you build a brighter financial future.