The Joplin Globe, Joplin, MO

Local News

June 9, 2012

Student loan interest set to double unless Congress takes steps

— If all goes according to plan, Samantha Evans will find a government job upon graduation as a crime scene analyst or a forensic officer. She also eyes possibly working with the FBI or the Secret Service eventually.

But there’s a cloud hanging over those hopes — the $25,000 that she has so far borrowed to pay for her education at Missouri Southern State University.

“I’m terrified,” Evans, a 21-year-old criminal justice administration major from Lampe, said recently. “That’s a big number. That’s a lot of money that I don’t have.”

Evans is not alone. Millions of students nationwide pay for at least part of their college education through loans and consequently amass a growing amount of debt, estimated to have reached $1 trillion last year, according to the federal government’s Consumer Financial Protection Bureau.

The Federal Reserve Bank of New York, meanwhile, estimates in a report published last month that student loan debt reached $904 billion in the first quarter of this year. Total student loan debt — which outweighs the $679 billion Americans owe on credit cards — has increased by $663 billion in the past decade, according to the report.

Two-thirds of college seniors across the country graduated with loans in 2010, according to the Project on Student Debt, which is part of the Institute for College Access and Success, an Oakland, Calif.-based nonprofit that researches issues in higher education.

The average debt for college seniors of the class of 2010 was $25,250, a 5 percent increase from the previous year, the group reports. More than half of students in Missouri, Kansas and Oklahoma leave college with debt, averaging between $20,000 and $22,000 per student. The data come from voluntarily reported debt information from about half of the country’s not-for-profit, four-year colleges and universities.

William Brewer Jr., head of the National Association of Consumer Bankruptcy Attorneys, issued a warning this spring, predicting that America’s student loan debt could trigger the country’s next great financial crisis, doing to the economy what housing debt did a few years ago.

“This could very well be the next debt bomb for the U.S. economy,” he said.

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