Student Debt Delinquency Soars 22% — Millennials Most Likely to Default
In 2005, the average student loan debt was $17,233. By 2012, it had increased to 27,253%.
The study also found that student loan default increased 22% in 2012, with last year's delinquency rate at 15.1% compared to 12.4% delinquency rate registered in 2005 (by contrast, the average credit card balance and car loans owed decreased during the same period).
FICO says that millennials are in "a significantly greater risk of default" than Xers and boomers when they graduated from college.
This is a big problem. Since the passing of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 no student loan can be discharged in bankruptcy (ask Casey Anthony).
In addition, student loan debtors' credit and employment opportunities could suffer as a result of the default, potentially dragging the debtor into financial disaster (which could lead to a student debt bubble with broader financial repercussions).