COLLEGE STUDENT DEBT INCREASES AGAIN

College student debt continues to increase at a rate of 5% a year as the Project on Student Debt reported last week that the bachelor degree graduates of the class of 2011.  PSD found the 66% of all graduates leave college with debt that averages $26,600.  This debt both federal and private loans is a burden on new graduates as they seek jobs in a very difficulty economy. 

The debt per student varies greatly by state and college from a high of $32,440 for New Hampshire and a low of $17227 in Utah.  Massachusetts comes in at 14^th from the top with an average student debt of $27181. 

Because of “reform” of the bankruptcy laws student loans are now not dischargeable, that is an individual who declares personal bankruptcy can have her credit card loans wiped out but not her student loans.  Because of this change in bankruptcy law, Nobel prize winning economist Joseph Stiglitz in his book the Price of Inquality argues that student debt is creating “partially indentured servants.”  This refers to the practice during American colonial times of individuals agreeing to servitude in the new world for a period of usually seven years in exchange for a loan to carry them to the new world.