Millions of parents who took out loans to pay for their kid’s college education are unable to pay them back, according to The Wall Street Journal.
Nearly 8 million Americans holding some $137 billion in federal student loans are at least 360 days delinquent on their payments, WSJ reports. That figure is nearly equivalent to the number of people who lost their homes after the housing market collapse of 2007, according to The National Center for Policy Analysis.
Another 3 million owing $88 billion are over a month late on their payments.
The problem is not likely to improve anytime soon, as the majority of those who default on student loans are among those with weak credit, according to new research by economists at The Federal Reserve Bank.
Federal laws do not allow for borrowers to rid themselves of student loan debt through bankruptcy. The federal government rarely grants borrowers the ability to skirt the law, but instead collects its payments through reducing tax refunds and deducting from Social Security.
From September 2010 to September 2015, the number of Americans who had student loan payments extracted from their wages, tax refunds or Social Security rose by 71 percent, WSJ reports. The government extracted funds from 173,000 Social Security checks in 2015, up from 36,000 in 2012.
President Donald Trump promised on the campaign trail to help ease the burdens student loan burdens on families, even going so far as to float privatizing federal student loans altogether. Thus far, no significant action has come out of the White House regarding student loans in Trump’s First 100 Days.
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