USA: Many graduates remain unemployed

Banks wrote off three billion dollars of student loan debt in the first two months of 2013, up more than 36 per cent from the year-ago period, as many graduates remain jobless, underemployed or cash-strapped in a slow U.S. economic recovery.

Bild: Thomas Kölsch / Pixelio

The credit reporting agency Equifax said that student lending has grown from last year because more people are going back to school and the cost of higher education has risen.
Equifax analyzes data from more than 500 million consumers to track financial trends.
About 17 per cent of the nearly 40 million student loan borrowers at least 90 days past due on their repayments, a February report from the New York Federal Reserve Bank showed.

U.S. student loan debt reform has become a more pressing issue since the U.S. Consumer Financial Protection Bureau (CFPB) reported in March 2012 that the total surpassed one trillion dollars by the end of 2011. The cost of earning a 4-year undergraduate degree has gone up by 5.2 per cent per year in the last decade, according to the CFPB, forcing more students to take out loans. While other forms of debt went down, student loan debt continued to rise through the economic crisis.

Groups such as the New America Foundation, a non-profit public policy institute, have said the current student loan repayment system is too complicated for borrowers, and that an income-based repayment system could simplify the process. Some students, they say, simply don't know how to enroll in the different repayment options or put repayment off to take care of more urgent bills such as credit cards and rent.

(04|2013) Source: Chicagotribune