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New Illinois College Grads Struggle With Student Loan Debt

Many Illinois college students are looking forward to graduating this month. Unfortunately, their excitement may be tempered by the amount of student loan debt they will soon have to begin paying back. The issue has now gained national attention, as lawmakers debate potential solutions to the student debt problem.

Nationwide, student loan debt recently reached $1 trillion, surpassing credit card debt. The U.S. Congress is debating whether to keep the federal student loan interest rate at 3.4 percent, and how the lower rate would factor into the larger budget. Illinois Senator Durbin has also put forward a bill that would allow some student loans to be discharged in bankruptcy.

According to the Institute for College Access & Success, the average college student in Illinois who takes out loans graduates with $23,885 in debt. This is about average compared to the rest of the country. New Hampshire students have the heaviest debt load with an average of $31,048 in loans.

According to the Director of Student Aid at Illinois State University, the average debt among the 60 to 65 percent of 2011 graduates who borrowed was $22,720. Every year, however, it is going up. At Illinois Weselyan University, roughly 65 percent of students take out loans, and the average total debt was $31,200 among 2011 graduates, according to the IWU Director of Student Aid.

With a tough job market, many college graduates are worried they will be unable to pay back their student loans. Borrowers concerned about making their payments should not hesitate to contact their lenders to discuss the options available to them including forbearances, deferments and various repayment programs.

Unless there is a significant hardship, student loans generally cannot be discharged in bankruptcy. However, filing for bankruptcy will relieve individuals of other debts, which may free up funds for student loan repayment.

Source: Chicago Tribune, Debt dilemma: Students feel squeeze as loan figures rise, Lenore Sobota, 10 May 2012

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