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Since the economy has slowed, more Miami residents have made an effort to avoid excess debt. However, there is a glaring exception: student loans. Many believe that student loans are an allowable debt, because education is an investment and students hope to make a salary that will allow them to pay their loans. But those great jobs don’t always come, and with student loans scapegoats, such as bankruptcy don’t come easy.

Because loans are issued by the federal government, they are among the easiest types of loans to obtain and carry a relatively low interest rate. However, the government issued loans such as Stafford loans do carry annual limits that don’t always cover necessary academic expenses. This prompts many to seek additional loans from private lenders, which may carry higher interest rates than Stafford loans.

Many graduates are finding it is difficult to get the job they need after graduation, and are falling behind on their loans. For the first time, student loan balances that are 90+ days past due are higher than serious delinquency rates of credit cards. The Wall street Journal reports that since 2007, student loan debt has increased by 56%.

The concern over student loan debt doesn’t necessarily mean that higher education should be shunned, but there are ways to make it more affordable and limit the amount of money borrowed while in school. Students who are able can take some college level courses in high school, and some may be able to take tests such as the CLEP test in order to gain credit for a fraction of the cost they would pay in tuition. They can also choose community colleges and state schools, apply for scholarships, and live at home for a longer period of time in order to keep college costs down.

For those who are already in trouble for their student debt, seeking financial counsel from a bankruptcy attorney may help them find a workable solution for their debt.

Source: CBS News, “Student loan debt nears $1 trillion: Is it the new subprime?” Jill Schlesinger, Nov. 28, 2012