St Louis Lending Experts Notice Student Loan Debts Exploding

St Louis Mortgage Refinancing and Real Estate News –

News: Unprecedented Student Loan Debt Explodes

The year 2010 will be remembered for many financial snafus and setbacks due to the alarming rise of foreclosures and underwater housing.

But it is already turning out to be the year where students have taken out an unprecedented number of loans.

And this lending whirlwind may bring negative long-term implications for the housing and auto markets.

At present, student loans that are outstanding are up about 50 percent since 2007 with the cost being $562 billion, according to Equifax.

“We’ve never seen these levels of debt for student loans,” said Adams, president of Equifax U.S. Consumer Information Solutions.

He attributes the spike in student lending largely due to the recession.

Adams feels that this economy has kept students in school since there are no jobs and also due to states struggling with less tax revenue thus having to cut funding for higher education.

“Already high student debt loads will probably increase substantially as tuition rates continue to rise across the nation,” Adams said.

He goes on to say that he sees no end to the upward student loan trend.

Why is this? Consider that President Obama signed into law a student lending overhaul that cuts commercial banks out of the business altogether.

This bill also expands the federal Pell Grant program while at the same time capping loan repayments at 10 percent of a graduate’s salary which is considerably down from the 15 percent payment schedule.

“The government is going to be more inclined to extend credit” than any of the commercial banks, Adams said.

Now on the flip side of the coin, the total consumer debt has fallen by $590 billion, or 5.1 percent, which is now $11 trillion since the peak of October 2008.

Between December 2007 and 2009, the amount of credit available in home equity lines drastically fell 70 percent or down to $5.3 billion.

==================================================

When applying for a St Louis mortgage or a St Louis home loan Liberty Lending Consultants loan, call the recognized St Louis home loan experts, at 877-334-0210 or 314-334-0210 and ask for Steve Swan, Doug Stahlschmidt or syndicated columnist Floyd Tapia, the host of the St. Louis Refinancing “Mortgage Minute.”