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The amount of outstanding debt among students in the United States now sits at over 1 trillion dollars, surpassing both credit cards and auto loans as the leading source of American indebtedness. The recent finding by the Consumer Finance Protection Bureau has kicked-off national concern over the possibility that there is a student debt bubble about to burst. Recent college graduates, and even those who earned a diploma long ago, are struggling in today’s weak economy to find jobs with incomes high enough to make their monthly college loan payments. A shocking number of older Americans are also saddled with higher education debt. Those who are 60 years and older owe $36 billion and face the prospect of seeing their social security garnished should they default.

The pace of student borrowing shows no sign of slowing with $117 billion in federal student loans taken out last year alone. Meanwhile more and more borrowers are defaulting on their college debts, with over $60 billion in defaults on the books. The Department of Education, in response to increasing defaults, last year paid out $1 billion in commission fees to collection agencies, some of which are being accused of violating fair debt-collection laws.

President Obama has made moves to reduce the debt-burden on graduates, capping monthly payments at 10% of the borrower’s income and mandating that outstanding debt be forgiven after 20 years. These reforms, however, do not apply to private loan providers, such as Sallie Mae, the nation’s largest, which last year issued $2.7 billion dollars in financial aid.

GUEST: Victor Sanchez, President of the United States Student Association

Find out more at www.usstudents.org for more information.