Rising Student Loan Debt Could Be Next Financial Crisis
Americans are facing another financial crisis that experts say could be the next housing bubble.
Students and parents are racking up student loan debt that could put them in serious financial trouble.
Experts say college tuition has increased by 5-600 percent over the last 25 years yet the average starting pay for a graduate is 25 thousand dollars and that's if they can find a job.
Tonnetta Gibby, a college student with loans, says " I"m very concerned because once we finish school there's no guarantee we're going to get a job right away."
Gibby is attending Virginia College and majoring in business administration. She says her student loan is around 15,000 dollars and she's worried about paying it off if she can't get a job.
"The only thing I can think of is call them and ask them if they could put my payment on deferment," said Gibby.
CBS 8 Financial expert Jeff Bates says when graduates can't find jobs or a good paying job they have trouble paying the loan.
When students can't pay the loan some refinance, racking up more debt. If they can't repay the loan it hurts their credit rating and prevents them from getting a job.
Some parents, who would normally look at paying into a retirement fund, are now looking at paying their children's student loans.
Lisa Millwood's parents co-signed for her student loan.
"It would be down to my parents to start helping me but I'm pretty sure that I could find something even if it's not in my major to start out with just to get money and start paying stuff off," said Millwood.
Bates says the major reason for this crisis is federal and state governments cut college subsidies.
That burden of cost has been shifted to tuition.
Some grant money has been increased but it did not keep up with tuition.
Now it's a matter U.S. lawmakers will need to address.
Right now there's over a trillion dollars of debt in student loans.
This is the first time in U.S. history that student loan debt has exceeded credit card debt.