Small Loans Make Up Greatest Share Of Student Debt
According to a report released by the White House, those who dropped out of college after taking out small student loans have a harder time repaying their debt than those who took out thousands of dollars in loans. This finding backs up many other studies that show the assumptions about student loans are perhaps incorrect. Most assume that those who graduated with a large amount of debt are the ones stressing most over their payments, but this may not be true.
Instead, the student loan debt is a burden that falls more on low-income individuals unable to complete college due to any number of factors. Without the resources necessary to finish their degree, they may be unable to repay their student loans.
The report, using information collected by the Department of Education, shows that those who attended a for-profit university also had a harder time dealing with their student loans because they were more likely to get jobs with lower salaries. They were also more likely to be unemployed and to default on their student loans.
Around 60% of those with student loans have less than $20,000 in debt, with about 42% having less than $10,000. While many borrowers are making slow progress with paying off their student loans, few are able to pay them off fast. Of those who began paying on their loans in 2009, only 17% have paid them off completely.
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This article was provided by our partners at moneytips.com.
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