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The typical student loan debt of a university graduate has now topped $25,000. Not surprisingly, numerous bankruptcy attorneys have reported that school loans are becoming an increasingly prominent factor in bankruptcy filings. Source of article: Student loans becoming a major contributing factor to bankruptcy Way of school loans It seems that almost everybody has student loans they are paying off as it accounts for $1 trillion in debt throughout the whole country. This is because tuition rates are climbing faster than inflation is. Some of the loans are backed by the government with low rates of interest while others are given by private lenders and have high rates of interest. With credit card debt only amounting to $789 billion in the United States, student loan debt is a much bigger problem. Higher rate of interest Unless Congress takes action in the next few months, student loan rates of interest are due to increase between 6 and 8 percent. The increase would efficiently double interest rates, which would increase the cost of student loans exponentially. Congress has also been eliminating the amount of available student assistance programs, including subsidized loans for graduate students, cutting the amount of the Pell Grant program and making Pell grants tougher to qualify for. Personal installment loans can help finance immediate educational costs. Student loans bankrupt individuals More individuals are being pushed into bankruptcy due to student loan debt even though 95 percent of student loan debt cannot be discharged with bankruptcy. Around 80 percent of bankruptcy attorneys said that there was a “notable jump in the number of potential clients with student loan debt.” As reported by the National Association of Consumer Bankruptcy Attorneys, bankruptcy is occurring because of student loan debt for many people. As reported by the National Association of Consumer Bankruptcy Attorney’s William Brewer Jr., who spoke to USA Today:

"Take it from those of us on the frontline of economic distress in America," he said. "This could very well be the next debt bomb for the U.S. economy."

Low interest rates Instead of getting an adjustable rate on a student loan, make sure you lock in a low fixed rate of interest in order to avoid paying a lot of additional cash. And increased interest rate means that you will pay a ton more over the lifetime of the loan in interest. It may also help to automatically deduct payments. Another thing you can do is consolidate student loans with programs such as the William D. Ford direct Loan Program. Sources CNN Money LA Times OurTime