After years of studying and spending tens of hundreds of hours in the library, you're finally free from school.
Unfortunately, you're not free of the student loan debt you accumulated.
If you just graduated from law school or medical school, your student loans will be even higher and possibly saddle you with debt you'll need to repay for many years to come.
The good news - if you consider this good news - is that you're not alone. It is now estimated that 70 percent of the graduating classes of 2013 owe an average of $35,200.
$1.1 Trillion in Student Loan Debt
According to the Consumer Financial Protection Bureau and the Department of Education, 38 million student-loan borrowers now owe in excess of $1.1 trillion. Their debt includes federal, state and private loans and loans made by their families. Some students placed a portion of their debt on their credit cards and are paying exorbitant interest rates.
The student loan debt in California is lower than the debt in New York but more students in California are delinquent in repaying their debt, according to a Wall Street Journal report. Some experts believe this discrepancy is due to students attending East Coast private schools that better equipped them to repay their loan debt.
After graduating college, it's common for most adults in their 20s or early 30s to purchase homes. Not these days. Some graduates need to first focus on reducing their debt before taking viable steps toward building their futures and taking any job that's available.
They can't buy a vehicle, get married or assume a mortgage. Some even have to move back home with their parents. And they can't pursue the jobs for which they've been trained.
The Federal Reserve now views student debt - the largest consumer debt class after home mortgages - as a risk to economic growth.
Consider these facts:
- Between 2007 and 2010, the average student-loan balance for households increased by almost 15 percent, according to the Consumer Financial Protection Bureau.
- FinAid.org created a student-loan debt clock to show outstanding federal and private student loans. It reached the $1 trillion mark on May 8, 2012.
- A recent TransUnion study found that more than half of student-loan accounts are in deferred status, where the repayment of the principal and interest is temporarily delayed. Deferred loans now represent 43.5 percent of all student-loan balances.
- A year ago, the National Association of Consumer Bankruptcy Attorneys warned that the student-loan "debt bomb" would be America's next mortgage-style economic crisis.
- In the Fidelity survey, half of 2013 graduates with student loans said their level of debt surprised them. They hadn't realized how much they had borrowed
If you are concerned about your student loan debt and are considering whether you should file for bankruptcy, be sure to speak with a Sonoma County bankruptcy lawyer first.
The Law Offices of James V. Sansone offers a full range of family law and bankruptcy legal services. We are located in Santa Rosa, California and serve clients throughout Sonoma County, Mendocino County, and Lake County, including Santa Rosa, Petaluma, Cotati, Rohnert Park, Sebastopol, Healdsburg, Sonoma, Kenwood, Glen Ellen, Windsor, Bodega Bay, Ukiah, Willits, Clearlake, Lakeport, and Kelseyville.