According to the Huffington Post and the Associated Press, student loans have led to a rise in inequality across the country that is hurting the economy, investments and the real estate market. The news outlets reported that student loans are “contributing to the widening of the gap between rich and everyone else in the country.”
According to the news outlets, the median 2009 net worth for a household without outstanding student debt was $117,700, nearly three times the $42,800 worth in a household with outstanding student debt.
“If you graduate with a B.A. or doctorate and you get the same job at the same place, you make the same amount of money,” William Elliott III, director of the Assets and Education Initiative at the University of Kansas told the AP. “But that money will actually mean less to you in the sense of accumulating assets in the long term.”
It should be noted that there is currently more than $1.2 trillion in outstanding student loan debt across the country. It is an obstacle for many young adults—college pays off, but outstanding debt can be defeating.
According to a Pew Research Center analysis of census data, college graduates ages 25 to 32 working full time earn $45,500, about $17,500 more than their peers with just a high school diploma. The AP reported that the average four-year graduate accumulates $26,000 to $29,000 in loans, and some leave college with six figures worth of debt.
One person the AP talked to, Gregory Zbylut, pays $1,300 toward his law school loans. He estimated that he could have saved up about $150,000 to $200,000 in a 401(k) had the money he had paid toward loans had gone into a retirement savings plan.
Can I Discharge My Student Loans Through Bankruptcy?
It should be noted that it has always been tough to discharge student loans through bankruptcy; however, it is not unheard of. The HuffPost reported that 2012 data showed that in bankruptcy cases, 47 percent of federal student loans were discharged in full, 21 percent resulted in a better payment and 12 percent settled for less than was due.
If you are struggling with student loans, a Chapter 7 bankruptcy could help discharge credit card debt, medical bills and unsecured personal loans, which could help free up money to make student loan payments. Contact our Washington DC and Maryland bankruptcy lawyer to learn more about whether you should file bankruptcy. Call us today at (202) 483-6070 if you have issues with debt.
You can also visit our Facebook page, our LinkedIn page, our Google+ page and our Twitter page for more information about our services and student loans. We are located near the Navy Memorial/Metro Station.
Law Firm of Kevin D. Judd
Judd’s Judgment: Washington D.C. has the highest percentage of residents with student loan debt in the country.