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Ohio, nation's student loan debt grows

Student loans are somewhat of a unique animal in terms of debt. Many Ohio residents rely on student loans to finance a college or university education in the hopes of securing a more stable financial future. However, in today's economic times, many college graduates are finding that their debt load after graduation is much higher than just a few short years ago.

Student loan debt is generally treated differently than many other types of debt under the federal bankruptcy code. While many people who file for chapter 13 bankruptcy may be able to make up ground on arrearages in student loan debt during the chapter 13 plan, student loans are generally not dischargeable under current bankruptcy law. A recent study, from the Project on Student Debt, shows that the average debt for graduating seniors jumped to $25,250 in 2010.

That is the highest debt load on record for graduating seniors. In Ohio, the numbers were even worse. The recent study says Ohio ranks number seven in the nation for graduating seniors, with an average student loan debt of $27,700 in student loans.

The national numbers were a 5.2 percent increase from the numbers recorded in 2009. The nation's economy has been sputtering for a number of years. The unemployment rate for graduating seniors has risen with the nation's overall unemployment rate. In 2010, the unemployment rate for recent college graduates nationwide was 9.1 percent, up from the 8.7 percent unemployment rate for graduates experienced the year before.

However, the Project on Student Debt shows that the unemployment rate for 20 to 24-year olds with only a high school education was more than double that of those with an undergraduate degree. People in their early 20s with a high school diploma saw an unemployment rate of 20.4 percent in 2010, according to the study.

President Obama recently announced new income-based rules on student loan debt. Those rules may benefit some low-income college graduates in servicing their student loan debt. However, the rules are confined to student loans. Unemployment, stagnant earnings for working Americans and increasing use of credit card debt to help make ends meet continue to affect many in Ohio, in all age groups.

Cincinnati residents who are experiencing financial distress due to high debt loans should consider speaking with an experienced bankruptcy attorney for an assessment and to learn if the bankruptcy code can help an individual find debt relief in an individual financial situation. While some debts, such as student loan debt, most overdue taxes and a number of other specified debts are not dischargeable in bankruptcy, restructuring or having dischargeable debts taken care of under the bankruptcy laws can put some people in a better financial state to cover non-dischargeable debts.

Source: U.S. News and World Report, "Average Student Debt Reaches All-Time High," Danielle Kurtzleben, Nov. 3, 2011

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