The 3 groups struggling the most with student debt

It’s no secret that student debt is a big issue for millions of Americans.

We’re constantly hearing scary statistics about the rising amount of student loan debt (currently over $1.2 trillion) and how many borrowers are struggling to repay their loans.

But a recent study, as described in U.S. News & World Report, showed that three types of borrowers are struggling the most and accounting for a large part of the high numbers we hear associated with student debt. These groups make up a disproportionately large amount of the nation’s total student debt compared to undergraduate borrowers.

Certain students have more college debt

The three groups suffering the most with student debt include:

1. Graduate students
2. For-profit college students
3. College dropouts

Each of these groups has unique circumstances that make them susceptible to dealing with the consequences of student loan debt.

Graduate students

Unlike undergraduate college students, graduate college students can borrow unlimited amounts of money from the government in the form of Direct Loans and Graduate PLUS loans. According to the article, 65% of 2012 graduates who borrowed $50,000 or more were graduate students.

Many people don’t realize that graduate students’ high student loan balances drive up the overall average student debt, which borrowers that don’t attend graduate school have much lower balances.

For-profit college students

This group has seen their student debt spike quickly in recent years as college costs have risen and for-profit colleges have become more popular. On average, they borrow more than undergraduate students who attend public or private not-for-profit colleges.

The study showed that graduates of for-profit colleges made up a quarter of the students who were graduating from college in 2012 with more than $50,000 in debt, even though they made up only 9% percent of all undergraduate degree recipients. To constrast, only 6% of public college graduates and 12% of private college graduates had such high debt levels.

College dropouts

College dropouts (and for-profit college dropouts in particular) are more likely than graduates to struggle with student debt and high default rates. While they tend to have lower overall debt, they’re less likely to repay it, in many cases because they can’t find a job that pays well enough to afford their student loan payments without the degree.

While programs like Income-Based Repayment can make student loan repayment easier, many of these students are unaware of their options and don’t enroll in a program, which puts them at risk of falling into student loan default.

Affording college without high student loans

While many borrowers outside of these categories are still struggling to repay their student loans, it’s important not to be misled by statistics about the student debt picture. It’s very possible to afford college without taking on enormous student loan debt–we help families do it everyday.

And if you’ve already got student debt, you don’t have to become another statistic. We help borrowers get on the right repayment program for their situation so they can afford their payments, avoid default, and get rid of their student debt.

If you’d like to learn how we can help make college more affordable for your family or pay off your student debt, call us at 1-888-234-3907 or contact us using this form and we’ll get back to you right away.