A new report released by the New York Federal Reserve reveals total student loan debt is approaching $1 trillion. This figure amounts to a 70% increase in both the number and size of loans per student in the past 8 years.
With the credit crisis still fresh in our minds, it is bad for the US when 17% of borrowers are past due on student loan payments. The domino effects can already be seen: only 4% of those between the ages of 25 and 30 took out a home mortgage, which is a 50% decrease from 2005.
While student debt tops all other forms of consumer debt, it's the only kind that cannot be absolved in bankruptcy. The fed's report comes less than 24 hours before the federal sequester is scheduled to take effect, the automatic budget cuts that will cut off federal financial aid for as many as 280,000 students nationwide.