The Wall Street Journal looks at the mostly ignored issue of students that are unable to pay back their loans. It is a bigger problem- and more widespread than you think.
Today 16% of all student loans are in forbearance-not being paid. that amounts to about $125 billion of the $778 billion in repayment according to the WSJ.
But forebearances aren’t technically in “default.” The number of student loans in default is even more alarming.
“…the share of borrowers in default is still trending upward. It now stands at 19.8% of borrowers whose loans have come due—some 7.1 million borrowers with $103 billion in outstanding balances. That’s the highest share since the Education Department began making the statistic available in 2013, and given other trends, it probably is a record high.”
If student loans are a key part of your plan for college- consider carefully- about 20 % of all student loans are in default, and another 16% are in forbearance.
That 36% is remarkably close to the fact we published here last July:
“Four in 10 college graduates, according to a recent Gallup study, wind up in jobs that don’t require a college degree.”
The odds are not good for your ability to repay student loans according to the current performance of borrowers.
Consider a career where you can earn while you learn and where the employer may help out with tuition reimbursement.
Charts credit: Bizmology Hoovers