In the wake of the recent financial crisis, student loan defaults are rising at an unprecedented rate. Indeed, there are approximately five million federal student loan borrowers currently in default.1 Federal student loan debt now totals approximately $870 billion, and for the first time has surpassed credit card debt.2 As tuition rates are constantly on the rise, the average college graduate has student loan debt of $25,000.3 As reported in The Washington Post, not only are “[t]he long-touted benefits of a college degree…being diluted by rising tuition rates and the longevity of debt,” “[b]ut with the recent recession prompting layoffs at white-collar law firms and investment banks as well as auto plants and construction companies, more Americans are finding themselves out of work and deep in debt.”4
Bloomberg Businessweek reported: “Dubbing it a ‘student loan debt bomb,’ the National Association of Consumer Bankruptcy Attorneys (NACBA)” warns “about the effects of rising student debt on recent graduates, parents who co-signed their loans, and older Americans who’ve gone back to school for job training.”5
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