10 Scary Facts About Student Loan Debt

Student loan debt is a lot more common that many people believe; it’s excessive to the point of costing more than $1.1 trillion. That’s right; that’s how much student loan debt is out there right this minute – and that is a number that is only going to get higher. When you are in college and ready to continue your education so that you can be the fun, fearless, fabulous type that conquers the world and jet sets with the other most powerful people in your industry when you graduate, it’s all exciting. You apply for those loans so you can pay for tuition and books, and you don’t worry much about it.

It’s money being given to you so that you can get a killer job and make a great deal of money one day when you actually have to pay them back. You aren’t paying that student loan debt right now, so why do you care much about it? Oh, because it’s going to have a significant effect on the rest of your life if you’re not a little more concerned about it right now. Ask any college graduate what happens after they walk away from an institute of higher learning with that brand new hundred thousand dollar diploma; they get stuck interning, working in the mailroom and wishing they worked at McDonalds so that they, too, could earn $15 per hour.

Sorry, kids; the real world is not always how it seems. Sure, the diploma will pay off in the long run, but it sometimes takes a little more time than you think. You aren’t going to graduate and become CEO of a company. You’re going to start at the bottom of the food chain and get coffee, mail and be someone’s personal assistant with a glorified title until you work your way up and up and up until, one day, you are the CEO and you do get to show off that shiny diploma in a corner office with a 7-figure salary. Until then, good luck paying that student loan debt off.

Unfortunately, educational costs are skyrocketing at an alarming rate, and the job market is good but it’s not that good. Students are either forgoing school, working their way through at a snail’s pace in order to pay for one or two classes at a time, and many are simply unable to graduate because the surmounting costs are killing them without loans. And then there are graduates who are drowning in student loan debt – and the facts about student loan debt are going to make you feel even worse than you already do. Here are 10 facts about student loan debt that will give you nightmares for the rest of your life.

The Amount of Student Loan Debt has Tripled in Only a Decade

In the years between 2004 and 2013, the amount of student loan debt owed by graduates more than tripled. Those who have graduated are working hard to pay their student loan debt off and move on, but current students are using so much that the numbers have tripled. That’s a scary thought; especially when you consider what this means for our own children.

The cost of college is outrageous, and my husband and I know this for a fact considering we both went and we both paid – and we began our college careers as early as 2001. That’s before rates began to triple, so we can only imagine what our kids are going to have to do to go to college. Fortunately, they are all geniuses and will obviously get numerous scholarships and having colleges fighting over them left and right – or marry wealthy. Whatever.

70% of the 2013 Graduating Class has Student Loan Debt

Let’s be clear on this one; that’s more than half – almost a third – of the entire graduating class from two years ago that has student loan debt. What happened to the other 30%? Did they pay their way, earn scholarships or did their parents finance their education? What’s even more astounding about this number is the fact that it’s not even the only number we’re throwing at you right now. Of those 70% of 2013 graduates, the average amount of student loan debt that these students carry is $35,200. It should come as no surprise that many of these students would make different choices if they understood exactly what they faced upon graduation.

Half of Students have No Idea How much Student Loan Debt They’ve Accumulated

What’s really shocking is that of the 70% of the students that graduated in 2013 with student loan debt is that more than half of them were shocked and appalled when they saw how much debt they’d accumulated over the course of their college career. That’s right; they had no idea they borrowed so much money. You see, student loans are issued a little at a time so it’s sometimes difficult to understand who much debt you have accumulated over time.

Let’s say, for example, that you qualify for unsubsidized student loans and subsidized student loans every semester for four years – that’s 2 loans a semester for four years. If you go to school three semesters per year (we’re counting summer here) and you go for four years, that’s 24 loans. Even if you only take a portion of those student loans every semester to pay for books and classes, it adds up. Sure, $1500 for one and $1200 for the other each semester sounds reasonable and not at all over-the-top, but let’s do the math. If 12 of your loans are for $1500 and the other 12 are for $1200, you’ve just accumulated $32,000+ in student loan debt.

2 in 5 Graduates are Delinquent with Payments

Every sing month when student loan payments are due, 2 in 5 former students are delinquent with their payments. What does this mean? It means that these students are unable to pay their loans and they are unable to make the payments on time. Some of them are so late that they are more than a month past due, becoming delinquent. This is a serious problem since it does have a negative effect on your credit score, as well as on your ability to do just about anything in life, from finance a car or a home to even being hired for certain jobs in certain industries.

Federal Profits

Student loan debt is a favorite of the federal government. They love it over there; the more you take, the more they make. Sure, they risk that you will not pay them back, but they know they’ll get their money from you somehow since there is literally nothing you can do about owing them money – you have to pay. The federal government profited more than $50 billion off of your student loans in just 2013. That’s one year – just one year. Did you know that even the biggest corporations in the world that actually do business that brings in money left and right and serves an actual purpose in the world didn’t profit that much in 2013? Seriously, even Exxon Mobil only profited $45 billion the same year. That is a shocking amount of profit, and the government has no issue with that

No Bankruptcy Protection

You went to a nice school; you paid a lot of money. Now you’re making a decent living, but you have years to go before you’re making the big bucks. Let’s say you make $100,000 per year. You’re in the market for a nice paycheck every few weeks, right? Well, if you have $80,000 in student loan debt, you’re not doing so hot. So, you make the decision to file for bankruptcy because you owe so much money and you cannot keep up with the payments. It wasn’t an easy decision to come to, but you did it and now you will live with the consequences of your poor spending and borrowing habits.

Now you are stuck paying off those loans and you’re bankrupt. Why? Because there is no such thing as bankruptcy protection for student loan debt. You have it, you pay it, that’s the end of the discussion in every which way.

Student Loan Debt Haunts your Job Search

You might not have credit card debt. You might not make late car payments or mortgage payments. Your entire life might be in order every which way; but those darn student loans and your student loan debt will prevent you from ever being hired from jobs. You miss a payment here or there and that goes on your credit report. Eventually, you are stuck with these loans you cannot afford to pay, and you are looking for a job you can earn more money so you can pay your bills.

You need more money so you can make payments to student loan issuers. You apply for jobs, but your inability to pay your student loans has led to poor credit. Nearly 60% of employers check credit history reports for potential hires, which means now you don’t get that job. You still cannot afford your payments, you miss more. You still aren’t making any money to pay your debts, and you cannot ever get out of that cycle. It’s a real nightmare.

The Cost of Student Loan Debt

Are you sitting down? I think that you might need to sit down; this is information that is going to blow your mind, and absolutely not in a good way. You pay a lot of money for your diploma and your degree, and the expectation is that you will get that money back a hundred times over since you will be an educated job candidate who can apply for most any job, right?

If you ask the graduating class of 2010, the answer is no. One half of the students who graduated with a Bachelor’s Degree in 2010 are working at jobs that don’t even require a college education. That’s right; half of graduates are working somewhere they could have worked without their degree. Furthermore, 38% of the rest of those graduates are working for employers that don’t even require that their employees have a high school education. How’s what for a sad and desperate fact designed to make you realize your college education was one big waste of time, money and late nights?

More than 9% of College Grads are Unemployed

That is a huge number of people without a job. You might be sitting around here thinking that the number seems about right since many college students might have married, had kids and chosen to stay home with their kids, right? Wrong; this is not a number that takes into consideration those who are willfully unemployed. This is the number of college graduates currently accepting unemployment compensation after losing their jobs.

Basically, if you line of 100 people from your college graduating class, 9 of them are currently without work. That’s a lot when you take into account that more than 70% of those young men and women owe student loan debt to the federal government or private lenders. It’s a shocking statistic that makes the world seem almost cruel and unusual at the same time. What we are trying to say here is that your degree might not actually do anything for you but leave you unemployed and still owing a lot of money to the federal government.

Almost Half of 25-Year-Olds have Student Loan Debt

Approximately 40% of all people age 25 or over have some form of student loan debt, and much of it is debilitating to their financial situation. Even those with reasonably small loans in comparison to others are paying significantly, and they are doing so because they wanted an education. This is forcing many students to go back to school so that they can get another degree in another field where there is some student loan forgiveness. Additionally, many men and women are joining the military because they want to get that student loan forgiveness that’s being offered to them.

Photo by Getty Images