There’s been no shortage of news surrounding the student loan debt crisis recently – almost every day, media outlets publish new stories or updates about the crisis.
Per CNBC, there are currently 42 million Americans holding an estimated $1.4 trillion in student loan debt, and the problem is only getting worse.
The average student loan debt has been rising, from $29,400 in 2012 to $37,172 in 2017, with 70% of college graduates having student loan debt. It has become the next largest category of personal debt, behind mortgages. A study by Nerdwallet suggest that as a result, this can push off retirement until age 75.
The outreaching effects of this extends negatively to people, businesses, and industries beyond the borrower him/herself.
- It weighs down the economy
Student loan debts can affect one’s ability to purchase a home or car, get married and start a family, and limits spending on vacations, restaurants, or entertainment
- Providing adequate support is a burden on agencies
Nine loan servicers must support millions of federal student loans, making it difficult to provide consistent service and assistance. Private lenders must provide their own staffing and support.
- Delinquencies and defaults affects all involved
For the borrower, a late payment can negatively affect 35% of one’s credit score. For lenders, having too many delinquent loans can hurt their FDIC ratings; however, working with collection agencies may lead to aggressive and abusive tactics.
As a result, student loan scams are on the rise.
In an effort to ease some of this burden, we are partnering with lenders and banks to create a unique program that helps borrowers pay down their student loan debt using other people’s money!