New analysis shows rise in student debt
On behalf of Ellett Law Offices , P.C. posted in 1. Personal Bankruptcy on Thursday, January 5, 2012
It is expected by many people attending collegiate or post-collegiate institutions that a large amount of debt will be accumulated. This is usually seen in younger age groups, but a new study indicates an increased amount of borrowing from an older demographic who are returning to school during these tough economic times.
According to the report which spans the past three years, educational borrowing has risen across all age groups, but for people aged 35-49 their debt jumped 47%. Younger people still have the largest average amount of debt, with those aged 26-29 holding about $14,000 in debt. Still, a subset of the older demographic, aged 38-41, saw their debt increase from under $9,000 to around $12,000 since 2009.
With an estimated total of $966 billion in student debt in the U.S. – a number larger than the total amount of credit card debt in the nation – student loans can lead to personal bankruptcy.
Like many states in the southwestern United States, Arizona has a high personal bankruptcy rate. In addition, Arizona State University has roughly 56,000 undergraduates, and the University of Arizona is just south of the Phoenix metropolitan area with about 30,000 undergrads. The matter of increased educational debt is a familiar reality for some Arizona residents.
Personal finance professionals note that school borrowing is pretty easy to get and since the debt is backed by the government, it cannot be discharged if you file for bankruptcy.
The report is a cautionary tale for those entering a borrowing situation, may it be to get a college education or to reinforce your current education with further schooling. In either situation, it is important to secure a knowledgeable legal representative to support you in a personal bankruptcy matter and give you a legal plan of action for your financial situation.
Source: Reuters, “Middle-aged borrowers piling on student debt,” Mitch Lipka, Dec. 27, 2011
Tags: educational borrowing, personal bankruptcy, student debt