40 million Americans now have student loan debt

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college debt

(CNN Money) — Carrying tens of thousands of dollars in student loan debt has become the new normal.

Thanks to climbing tuition and inadequate college savings, 40 million Americans now have at least one outstanding student loan, according to new analysis from credit bureau Experian. That’s up from 29 million consumers in 2008.

On average, borrowers are carrying roughly four student loans each, up from less than three in 2008. Meanwhile, the average balance has increased to $29,000 from $23,000.

That has helped to push nationwide student loan debt to an all-time record of $1.2 trillion, an 84% jump since the recession.

Unlike other kinds of debt, student lenders are continuing to dish out loans to borrowers so young they don’t have proven financial track records or substantial credit histories.

“Student loans are the only credit vehicle where a lender continues to extend credit year after year without knowing the person’s ability, or even willingness, to pay,” said Michele Raneri, vice president of analytics at Experian.

The one positive aspect of all this is that if you’re in a strong enough financial situation to make on-time payments, having a student loan can help you establish and improve your credit early on.

But if you’re not, it can have the opposite impact.

“Missing payments affects your credit just like any other debt, [and] payment history is the most important factor in credit scores,” said Rod Griffin, Experian’s director of public education.

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3 comments

  • TheFoundingFathers

    I still can’t fathom why anyone would waste money on college at this point in time with absolutely ZERO chance at getting a well paying job. If you actually do some research and crunch the numbers you will find out that every job you apply for these days from fry cook to lawyer to doctor. You will have about an average of 1,400 people applying for that EXACT same position! And that should scare the SHIT out of every single person, the fact is if you want a job in todays market you will find out ” it’s not WHAT you know, it is WHO you know.

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