It is undeniable that having a college or advanced degree brings many advantages and opportunities, not the least of which is the promise of higher overall earning potential. But in an economy with an extremely tight job market and an ever-growing gap between the degree haves and have-nots, those who had to borrow large amounts of money to obtain those degrees are facing more and more financial challenges.
One of those challenges, according to a recent report by the Pew Research Center, is that those with higher levels of education debt tend to have a lower net worth and higher amounts of other types of debt, including credit card debt, than those who did not borrow significant sums for school. The report looked at households with college-educated adults under the age of 40. Those with no college debt had an average net worth of $64,700 and median total indebtedness of $73,250. Those households with college debt had an average net worth of only $8,700 and overall indebtedness of over $137,000. These comparisons are startling.
Currently, the average college graduate leaves school with slightly less than $30,000 in student loan debt, and many students are even exceeding $100,000 to get their degrees. There is no doubt that graduates are struggling to repay these loans after they leave school, and economists say that their struggle is a drain on the economy because it is preventing them from investing and making large consumer purchases such as homes and cars.
Even though student loans are generally not dischargeable in bankruptcy, those in New Jersey who are struggling with high student loans and other types of debt might want to consider consulting a bankruptcy attorney to determine whether some relief may be obtained by addressing credit card debt, medical debt and other types of debt that are dischargeable.
Source: New Jersey Herald, “Graduates face long road of loan repayment,” David Wenner, May 24, 2014