College loan debt now exceeds students’ credit card debt


Student loan debt now exceeds credit card debt in the United States. Americans owe $825 billion in credit according to the Federal Reserve, while estimates student loan debt at $830 billion, including federal and private loans.

Because of rising costs of tuition, 65 percent of undergrads finance their education,with loans.

The average debt of a recently graduated student in 2008 was $23,186. At $26,184, the average amount of debt a Webster University student graduates with is slightly above the national average, according to

Some advocacy groups, such as, are pointing to a faulty student loan system for creating a culture that forces students to go into debt to attain a degree. Alan Colligne, created the website in 2005 after he experienced problems with student loans.

The issue, said Colligne, is that consumer protection that govern other types of lending, such as credit cards and other types of private loans, do not apply to student loans. Unlike other forms of debt, student loans cannot be removed through bankruptcy. Additionally, the Statute of Limitations on Collections, the Truth in Lending Act, Fair Debt Collections Practices Act and the right to refinance and adherence to state usury laws all do not apply to student loans, both federal and private, as of 2005.

“After looking at the problem for many years, it became clear to me the only solution is to restore the most critical consumer protections,” Colligne said.

Furthermore, federal loans are guaranteed by the government, meaning that even if students default on their loans, the government will pay the lenders. This makes loans readily available to anyone, despite credit history or any other background check.

“When they don’t care if students default or not, there is no strong treason to crack the whip on university prices or student loan limits,” Colligne said.

New York attorney Robert Applebaum suggests a more radical approach. He believes the government should forgive student loans to stimulate the economy.

“I realize that what I propose is drastic. However, it serves an important role in bringing attention to the student loan system,” Applebaum said.

While not all agree with such an extreme response, most agree students are under a financial strain.

“Schools need to realize the financial strap they’re putting on the students,” Colligne said. “It’s also the students fault for not being more active consumers.”

Both Colligne and Applebaum believe it is within student’s power to remedy the large student debt issue.

“All students need to take this debt situation very seriously. They need to become politically active on these consumer protection issues,” Colligne said.

Students are able to choose how much debt they take on to pay for a college education.

“There really is no good financial reason to go to a school where the tuition rates are five times a state school,” Applebaum said. “If you want an education, you can have an education.”

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