The student loan debt crisis is being compared to the mortgage crisis by an association representing bankruptcy lawyers. Lots of families are in over their heads, and cannot pay back what they owe.
Credit card debt used to be the biggest burden for consumers, but not anymore. Now, it’s student loan debt – and experts are worried that it could prove similar to the mortgage crisis.
While the cost of higher education has gone up, salaries have not kept pace, especially for those new to the workforce.
"Even though most college students are getting jobs, they’re not the same professions or not at the same rates that people had anticipated," said Mick Swartz, associate professor finance at USC.
More than 80 percent of bankruptcy lawyers said they have seen the number of potential clients who are saddled with student loan debt increase "somewhat or significantly" over the last three to four years, according to a survey by the National Association of Consumer Bankruptcy Attorneys.
Few students have a chance of getting their loans forgiven because of hardship, according to 95 percent of the lawyers surveyed.
Students are not the only ones taking on debt. Since 2005-2006, the amount of loans taken on by parents has ballooned 75 percent.
Parents have an average of $34,000 in student loans, which, over a standard 10-year loan period, grows to about $50,000.
In 2010, college graduates owed on average more than $25,000 in loans.