Northern Arizona University freshman Tyler Dowden, 18, speaks during a news conference on Capitol Hill in Washington, Tuesday, March 13, 2012, to announce the collection of over 130,000 letters to Congress to prevent student loan interest rates from doubling this July. Millions of college students could be in for a big surprise. The interest rate on a popular federally subsidized student loan doubles in July unless Congress acts. (AP Photo/Manuel Balce Ceneta)TOM RAUM, Associated Press
WASHINGTON (AP) – The federal student loan program seemed like a great idea back in 1965: Borrow to go to college now, pay it back later when you have a job.
But many borrowers these days are close to flunking out, tripped up by painful real-life lessons in math and economics.
Surging above $1 trillion, U.S. student loan debt has surpassed credit card and auto-loan debt. This debt explosion jeopardizes the fragile recovery, increases the burden on taxpayers and possibly sets the stage for a new economic crisis.
With a still-wobbly jobs market, these loans are increasingly hard to pay off. Unable to find work, many students have returned to school, further driving up their indebtedness.