Americans owe some $826.5 billion in revolving credit, according to June
2010 figures from the Federal Reserve. (Most of revolving credit is
credit-card debt.)
Student loans outstanding today – both federal and private – total some $829.785 billion, according to Mark Kantrowitz, publisher of FinAid.org and FastWeb.com.
A consumer who juggles both credit-card and student-loan debt is likely to pay of the credit-card first, as that debt tends to carry a higher interest rate.
In terms of volume, a person is likely to borrow more money to go to school today than, say, spend on necessities using a credit card during a patch of unemployment.
It’s no surprise that many parents reeling from the downturn, would turn to borrowing to make up the difference.
With the cost of education increasing rapidly and the duration of unemployment increasing, perhaps the surprise is that this turning point didn’t hit earlier. But student loan debt, in many ways, is different than credit-card debt.
These loans typically can’t be discharged in bankruptcy. They have different repayment terms, some of which can catch some have heavy consequences for borrowers who miss payments and borrowers’ families.
Story by Mary Pilon for the Wall Street Journal
http://blogs.wsj.com/economics/2010/08/09/student-loan-debt-surpasses-credit-cards/
Similar Posts:
- Chase Drops Chasing Some Bad Auto Debts
- Study Shows the Hazards of Credit Card Indebtedness
- Facing Credit Card Debt? There Is Hope – In War
- Capital One Illegally Chasing Borrowers Who Had Filed For Protection
- Consumers Crying Foul Over Illegal Debt Collector Practices
- Credit Card Debt Protection Great For Banks, Not For Consumers
[...] Studen Loan Debt Larger Than Credit Card DebtConnecticut Watchdog (blog)A consumer who juggles both credit-card and student-loan debt is likely to pay of the credit-card first, as that debt tends to carry a higher interest rate. …and more » [...]
This information is actually pretty troubling. The one thing I can think of are students not applying for the financial aid scholarships to save them from loans. Many of them stupidly take out loans to pay for a semester and splurge the money on other items.
[...] This post was mentioned on Twitter by George Gombossy, blogs of the world. blogs of the world said: Studen Loan Debt Larger Than Credit Card Debt. By LowCards.com | Last updated Aug 15, 2010… http://reduce.li/vi5ink #larger [...]