ST. LOUIS -- The $1.6 trillion in U.S. student debt is causing anguish that goes far beyond financial concerns for the people who owe it.
One in 15 borrowers has considered suicide because of their school loans, according to a survey of 829 people conducted last month by Student Loan Planner, a debt advisory group.
Most student debt is held by people with balances on the lower end of the scale, with only 0.8 percent of the U.S. population owing more than $100,000, according to Deutsche Bank economists. They have labeled the issue as a "micro problem" for individuals, rather than a macro problem for the economy.
Yet that still equates to 2.8 million people with around $495 billion in debt as of March, according to Department of Education data. Even more worrying is that it's an increase of almost $61 billion since the end of 2017.
Student loans are the second-biggest kind of debt in America behind home mortgages, and it's often more expensive to service relative to the amount owed because interest rates are generally higher. Another concern is that, unlike buying a home, an education isn't a tangible asset that can be sold.
Student-loan debt is also turning into a hot political issue as next year's presidential election approaches. Sen. Elizabeth Warren, D-Mass., has proposed a plan to cancel loans for many borrowers, while former Colorado Gov. John Hickenlooper addressed some of the knock-on effects for the economy in a presentation at the Milken Institute conference last week.
"Of course millennials would love to buy a house," Hickenlooper said April 30 in Los Angeles, discussing the relatively low rate of homeownership among people in their 20s and 30s. But, Hickenlooper added, "they're buried in debt."
Financial advisers note that someone with a 20-year student loan of $100,000 with an interest rate of 7 percent would face total interest payments of more than $86,000.
A Section on 05/06/2019