Student Debt and The Dutch Boy With His Finger in the Dike
Money Management International (MMI), one of HPF’s partner agencies, released a survey this week revealing why there is a compelling need for debt counseling.
The survey found that more than 40 percent of its clients with student loans weren’t aware that they could possibly qualify for a lower monthly payment schedule because of a layoff or another economic adversity. Some 27 percent were struggling to make payments, were close to missing them, or were already in default. More than 50 percent had more than $25,000 in student debt.
Student loan debt is approaching crisis proportions, but the problem can’t be looked at in isolation. Throughout the housing crisis we have observed that debt issues often overlap – in addition to mortgage problems, many of the homeowners who call HPF’s Hotline are also having trouble making credit card, auto, and student loan payments.
Consumers who are struggling with student debt must seek comprehensive credit counseling, not just a solution for their student debt. Failure to do so will result in them becoming like the proverbial Dutch boy with his finger in the leaking dike.