International Business Times notes outstanding student debt at $875 billion is a problem larger than credit card debt. The national cohort default rate on federal student loans is 7% (for borrowers entering repayment in 2008) - compared to 8.8% default for credit cards, & 9.1% for home mortgages.
The situation is made worse by the economic recession making jobs scarce for graduates. Project on Student Debt reports unemployment rate for recent graduates at 8.7% in 2009.
Lacking employment, inability to refinance, being unable to wipe out the debt in bankruptcy leaves students with a lifelong burden affecting their credit histories and thus spending capabilities - this will depress the economy.
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