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As Americans pay off credit cards, student loan debt grows

As Americans pay off their credit cards, economists are worried about another kind of debt that continues to grow: student loan debt.

This afternoon, we'll get new data from the Federal Reserve on Americans' consumer borrowing habits. In recent months, Americans have borrowed trillions, to pay for cars and college.

After the 2008 financial crisis, many Americans re-evaluated their relationships with credit. They got more conservative and they started paying down credit cards.

"If you look at delinquency rates on non-mortgage consumer debt, they’re near record-low levels," said Christopher Thornburg with Beacon Economics.

Default rates have dropped, but economists are worried about another kind of debt that continues to grow: student loan debt. Americans owe more money to student loan lenders than they owe credit card companies. And that's starting to affect the jobs market, said Robert Manning, the president of the Responsible Debt Relief Research Institute

"It has actually created some competitive disadvantages for Americans, who have high student loans and can’t take certain jobs," he said.

Manning said that there is talk of reforming consumer bankruptcy laws to include student loan debt. But that, according to some economists, looks eerily like subprime mortgage debt did just a couple years ago.

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.
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I am a former college professor turned work from home entrepreneur. I actually started researching legitimate work from home jobs years ago when I was trying to help students find unique methods to fund their education.

The bottom line in this day and age is that most students don't understand the implications of students loans and student loan defaults are going to be the next thing to crash in our economy. Unfortunately, students can't discharge these in bankruptcy and they follow them forever.

In my opinion, its better to go to school a couple years longer, work to pay at least a portion of tuition and apply for as many grants as possible. In addition, start out at a lower cost community college before heading on to a more expensive institution.

Contrary to popular belief, there are jobs out there for struggling college students and many LEGITIMATE types of work from home / telecommuting work can be found online if you know where to look. I'm not talking mlm and business opportunity scams but real work with large companies like Dell, United Health Care, American Express etc.

With a little knowledge and allot of pereservence, students can finance some of their education and lower their debt significantly upon graduation.

For more information on legitimate work from home for college students, check out the Legitmate Online Job Directory at www.LegitimateOnlineJobDirectory.com.

I hope this helps.

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