More people seeking debt counseling are citing student loan debt as their main reason for seeking help, an analysis by a large credit-counseling agency shows.
Last year, nearly 15 percent of clients seeking help through CredAbility, a nonprofit based in Atlanta, cited student loans as their main debt burden —compared with no more than 2 percent during each of the prior two years, the agency said. The agency says its network of counselors assisted roughly 200,000 people last year.
“It was really a startling change for us,” said Mark Cole, the agency’s chief operating officer.
Most of the clients citing student-loan debt were between ages 30 and 50, suggesting they might be starting to find the loans unmanageable as they also handle other debts and obligations, like mortgages and family costs, as well as a difficult job market. “It’s starting to catch up with them,” Mr. Cole said.
It is not yet clear, he said, whether the loans are mainly those taken out by the clients themselves, or whether they represent debt incurred on behalf of the borrowers’ children.
Further, a spokesman for the agency said it did not track details of the debt, such as whether the loans cited as causing financial distress were mainly those from private lenders like banks or those made or backed by the federal government.
Loans made by, or guaranteed by, the federal government may be eligible forassistance programs — like those based on a borrower’s income — that can help lower monthly payments.
And some legislators are floating proposals to forgive student loans in certain circumstances.
Have you encountered difficulty repaying student loans? What action, if any, have you taken?
Content Courtesy of the New York Times: www.nytimes.com