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University students in the US could be indebted for credits for decades

The average student debt grew by 25% between 2000 and 2010, while the income of graduates between 25 and 34 years was reduced by 15%.

In the heat of debate on the educative reform Spanish and after the announcement of the ascent of the university rates, with which the Ministry of Education, Culture and Sport anticipates a saving of up to 1.542 million Euros , in the United States the debate on the serious problem of student loans, according to the newspaper The Wall Street Journal.

As people fall behind or postpone payments, the total amount they must grow as interest accumulates. A few months after the presidential election the issue has sneaked into the political campaign, and there are those who think that to avoid the huge debt contracted by the university students to pay for their studies , the Government should intervene by amending again the law on bankruptcies for defaults.

As the article explains, in 2005 the United States prohibited its university students from declaring bankruptcy in the face of their academic debts, except in exceptional cases.

The measure arose from the concern that young people often do not have important assets with which to repair the credit , such as a house or a car, so they would be tempted to move away from the obligations of the loan.

The situation has led some lawmakers to warn that a significant number of Americans could be buried under education loans for decades.

Young and indebted

In a decade, the country’s student debt has skyrocketed as university enrollments did , and at the same time, the income of graduates has declined.

The average debt of students already graduated in the US grew by 25% between 2000 and 2010. Thus, the average debt of students already graduated in the US grew by 25% between 2000 and 2010, while during the In the same period, the average income of titled workers between 25 and 34 years old was reduced by 15%, the newspaper said.

Many graduates are struggling to keep up with their debt payments, however, around 27% percent of young people who have borrowed money to study and have begun to repay their loans are in arrears , according to the Federal Reserve Bank of New York.

“As people fall behind or postpone payments, the total amount they should grow as interest accrues,” the article concludes.

Loans for the lowest incomes

In the case of Spanish university students, a few weeks ago, after the announcement of the snippet in Education , Minister José Ignacio Wert announced that his department plans to establish a system of loans through the Official Credit Institute (ICO) that will allow young people with the lowest incomes cope with the rise in university fees.

Wert questioned in his day the arguments of those who assure that the increase of the university rates could prevent to the families with low incomes access to these studies , emphasizing that a family of four members and with an income not superior to 38,000 euros is exempt of the payment of the fees.