Students take out loans thinking they'll be able to pay them off once they graduate and get a good job. But between the poor economy and bleak job market, at least one study suggests the student loan debt crisis is only getting worse.
In the "Student Loan Debt Crisis Survey" done by the National Association of Consumer Bankruptcy Attorneys, researchers interviewed hundreds of bankruptcy attorneys across the country. Nearly half say they have seen a significant increase in clients with student loan debt who are now filing for bankruptcy.
For many students going to college, including those at the University of Arizona, college is a time to enjoy newfound freedom, but it may also be a time to tally student loans.
"Somewhere between 40 to 60 thousand dollars, so far," said Lisa Martinez, a UA sophomore.
Despite her loans, Martinez says the investment in herself is worth it, plus she's confident by going into nursing that she'll be able to pay off her debts.
"But if you go into something that's not as certain or doesn't pay as well then obviously it's going to take you a lot longer and you may not even pay it back at all," Martinez said.
And that's the concern. An investment in education used to be a solid bet.
"It used to be, if you went to college, you'd get a good job and pay back those loans," said Joyce Serido, a UA assistant research professor. "But the reality is, there's a very large group of young people who are graduating with high educational loan debts who can't get jobs."
Since 2007, Serido has been tracking about two thousand UA students, focusing on things like loans and debt. Her study matches up with data from UA's financial aid office, which says nearly half of both undergraduate and graduate students last year relied on loans, and left with debt.
"I certainly did not expect that I was going to be unemployed at the end of finishing a Ph.D. from a good school," said Casey Totenhagen, who found a job a few months after receiving her Ph.D. from UA as a research scientist. Totenhagen says she'll be paying off debt from her student loans for the next ten to 12 years.
So if you're set on more school, Martinez has some advice.
"Do your research, figure out what loans are best for you, sign up for every scholarship you can get," Martinez said. "That's the best advice I can give. And, fill out your FAFSA as soon as possible so you can get grants and not have to pay those back."
To read the study yourself, click here: http://nacba.org/portals/0/documents/student%20loan%20debt/020712%20nacba%20student%20loan%20survey.pdf
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