SL Account Management Cites Bloomberg’s Piece on Student Loans: Household Debt’s Biggest Concern

Oct 29, 2018 by


Nobody is a stranger to loans. Everyone needs to secure them in order to improve their credit score and boost their chances of getting bigger loans at better deals in the future. A debt is not something to be scared of as it is simply a tool for attaining your needs and certain wants.

But there is an increasing concern about securing student loans. We may know of somebody or may have heard of someone who found themselves struggling to pay for the debt they have secured to get a better education. They initially had high hopes when they entered college – finish the degree and get a high-paying job. After all, that is what a lot of for-profit colleges promised during the Great Recession. But life happens and they are now they are strapped for cash more than ever.

Student Loans: A Growing Economy

The past 11 years saw a cumulative growth of student loans by almost 157 percent. For the second quarter of this year, there is a staggering $1.5 trillion in student loans. This figure places this debt as the second-largest segment in the United States coming next to mortgages.

This is a beyond significant growth considering that the auto debt has grown by only 52 percent within the same period. Meanwhile, mortgages and credit card debt dropped by about 1 percent.

Securing a student loan is a double whammy. The loan rate is rising and the cost of college education is increasing. Thus, it does not sit well for students who are paying off loans.

Household Debt Delinquency Rate

If we compare all the household debts, student loans top the highest 90-day and more delinquency rate. For the academic year 2011-2012, the delinquencies skyrocketed to 11.73 percent. This number may have decreased at present but it is still quite high at 10.94 percent.

By comparison, the delinquency rate of credit card loans is currently at 7.88 percent while auto loans are at 4.17 percent. Mortgages garnered the lowest 90-day and more delinquency rate which is pegged at 1.11 percent.

Student Loans: A Class of Its Own

Unlike other debts, the student loan is a class of its own. It has a systematic problem that is non-existent in other types of debt. Those who have this type of debt needs to get a job that will permit them to pay off their obligation. Thus, the rate of delinquency will continue to increase for as long as they have not earned the degrees that will help them pay for what they owe.

But this presents another roadblock. Not all students who secure the loan are able to finish as there are some who eventually drop off from school. This leaves them working in a job that can barely hold up for their living expenses.

Also, not everyone who graduates from for-profit colleges gets the job that will pay them enough for the degrees they have attained. Many of these graduates are paid less than the minimum wage.  To make matters worse, minority graduates will also have to discrimination in labor markets.

SL Account Management is an Irvine, California based company that can help with student loan debt needs as the debt numbers continue to grow and students look for solutions. For more information visit:

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