Last fall, the New York Federal Reserve reported the total volume of U.S. student loan debt now exceeds that of credit card debt for the first time ever. The situation is such that analysts are now warning of a consumer debt crisis on par with the housing market collapse.
According to a survey released this week by the National Association of Consumer Bankruptcy Attorney, more than four in five bankruptcy attorneys - 81 percent - say the number of potential clients with student loan debt has increased at least "somewhat" over the last three to four years. Additionally, nearly one-quarter of bankruptcy attorneys - 23 percent - have seen potential student loan client cases jump by 50 percent to more than 100 percent. over the same period. "Take it from those of us on the frontline of economic distress in America: This could very well be the next debt bomb for the U.S. economy," said William Brewer, president of the NACBA. "The amount of student borrowing crossed the $100 billion threshold for the first time in 2010 and total outstanding loans exceeded $1 trillion for the first time last year."