Student Loans the Next “Debt Bomb” to Detonate?

College students borrowed more than $100 billion last year, the first time that’s happened, pushing total student debt to more than $1 trillion, according to recent report released by the National Association of Consumer Bankruptcy Attorneys.

The report highlights the following facts:

• 2010 college graduates did so with an average debt-load of $25,250, which is up 5% over 2009 grads.
• People in the 35 to 49 age group have seen their debt skyrocket – it’s up 47%.
• Loans to students’ parents are also way up – 75% increase since ’05-’06.
• The 17% of parents who took out a loan have an average debt of $34,000, which the report says equates to $50,000 over a 10-year term of the loan.
• The college class of 2005 is not doing well paying off their loans. One analyst said 25% became delinquent at some point and 15% defaulted. The Chronicle of Higher Education puts the default rate on government loans at 20%.

The report states, “This concern is echoed by bankruptcy attorneys from across the country who report that what they are seeing at the ground level feels too much like what they saw before the foreclosure crisis crashed onto the national scene: more and consumers seeking their help with unmanageable student loan debt, and with no relief available.”