Deputy United States Treasury Secretary Sarah Bloom Raskin showed her concern on Tuesday regarding the prevalence of student loan debt in the U.S., where the number of students defaulting on their loans is moving up quickly.
According to official statistics cited by Raskin, more than 40 million individuals have taken out a student loan, and by the time these students finish school, the average amount of debt to pay would be $30,000, with the students taking an average of ten years or more to pay off the loan. Worse, Raskin warned that these students may not be able to pay off their loan at all. “While delinquency rates on many other types of debt have fallen in recent years, delinquencies on student loan debt are rising,” Raskin said, speaking at the University of Maryland on Tuesday. The total amount of student loan debt at the end of calendar year 2013 was estimated at close to $1.1 trillion, far higher than the amount of credit card debt recorded at that time of the year.
Other distressing statistics mentioned by Raskin included the percentage of students finishing school still owing money on their loan. According to Raskin, 60 percent of 2012 graduates did not pay off their loans in full – that is twice the 30 percent of graduates recorded in 1993.
With figures such as this rising to a “daunting” level, Raskin cautioned that defaulting on student loans could prevent an individual from finding employment, as companies tend to review credit history and consider previous debts as a possible sign of an irresponsible character.