Over the past decade, attending colleges and universities has become progressively more difficult, not to mention expensive. Well, sadly it doesn't look like this latter problem is going to get any easier, because our collective student loan debt has increased to almost $1.5 trillion, according to a new analysis. I guess it's time to start saving those pennies, people.
According to a Dec. 17 report from Bloomberg, U.S. student loan debt reached up to $1.465 trillion last month, double the amount of outstanding debt at the official end of the recession in June 2009, which was $675 billion. In addition, the report shared that it's becoming increasingly difficult for borrowers to pay off their loans. According to the study, students who took loans out in 2012 have had a more difficult time paying them off compared to students who received loans before 2012. And this isn't an issue that's only impacting younger generations: older Americans are still faced with heavy student loans. According to Bloomberg, 1.8 million American borrowers 62 and older owed a total of $62.5 billion in federal student loan debt as of September 2018.
Even scarier? A lot of people who owe money owe a lot of it. Per Bloomberg, more than 2.7 million people with student debt owe more than $100,000. And about 700,000 of them owe more than $200,000. That's not reassuring.
The amount of student debt could be a real problem even if you yourself don't have any outstanding loans. According to Bloomberg, some 90 percent of loans are backed by the U.S. Department of Education (DOE), which means that if too many people begin defaulting on their loans and not paying them off, it could prove a major blow to the economy. In fact, some experts are concerned that ballooning student debt in America could contribute to another recession, much like housing debt did in the 2008 financial crisis.
Nevertheless, in July, The New York Times reported that Secretary of Education Betsy DeVos had proposed changing a student loan forgiveness program introduced by President Barack Obama. The Obama-era policy was introduced after the collapse of two for-profit colleges in order to assist students who had been left with enormous debt by schools that drew them in through false advertising. Under DeVos' proposed plan, students would have had to prove that schools had intended to mislead them, and it would have be up to the Trump administration to decide which, and how many, students could receive loan forgiveness. In addition, the proposal would have cut $13 billion in debt relief, which means that even those students would be eligible for forgiveness might not be able to receive it. However, the proposal was shut down by a federal judge in September, who ruled that the changes to the proposal were "arbitrary and capricious" and allowed the original rule to go into effect in October.
It looks like it's good news for some students going into 2019. On Dec. 14, The New York Times reported that the DOE will cancel $150 million worth of federal student loans, which will impact 15,000 federal loan borrowers. So, even though the future of student loan debt overall may be unclear, at least that's a small victory for those struggling with paying back their loans.
As student loan debt continues to rise, it's important to start thinking about how to make these payments easier. Luckily for all of you, here's five options that can make paying back student loans a lot less stressful.