Debt from student loans is having a profound effect on the economy

Experts from Consumer Reports say the massive debt twists the lives of young people and creates a drag on the economy.
Kristen Mercado is proud of her college and graduate degrees, but says the $100,000 in student loans are crushing her.    She says   "I'm sitting here sometimes wondering, oh, can i afford to go do food shopping today or do I need to wait until my next paycheck, and I'm sitting here feeling like what was the point?"
She says the loans take a quarter of her take-home pay as a social worker, leaving her barely enough money for living expenses. 
Across the nation loans for higher education exceed all other consumer loans except mortgages. 
Two-thirds of college graduates carry a debt burden.
But government loans like Kristen's do have advantages over private loans. 
There may be a right to a  temporary deferment or a flexible repayment plan.
Students should only get loans from private lenders like banks as a last resort advises Suzanne Martindale,  attorney and student loan expert   "Private lenders don't have to offer flexible repayment plans to students.  And they may not come with fixed interest rates for example.   And so that may make them costlier and riskier, harder to repay." 
Other ways to minimize student debt:
  • Consider attending a state school
  • Submit the federal loan application, called the FAFSA, as early as you can
  • Borrow only what you really need, not the amount you qualify for
Consumers Union, the advocacy arm of Consumer Reports, says no matter how careful borrowers like Kristen are, their debt is having a profound effect on the economy.
Martindale explains   "In record numbers, young people in their 20s and 30s are delaying major purchases, such as buying a car, buying a home, starting a family."
Mercado agrees saying   "How could I even fathom having money to put down on a house?"
Consumers Union is calling for changes in current law so students get standardized, easy-to-read, information about their financial aid options including grants and scholarships before they commit to loans.
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