A crisis looms in US student debt

Rising student debt in the US is dampening millennials' spending habits and hopes for home ownership, with potentially disastrous consequences for the housing market and economy.

There are 40 million Americans who currently owe a collective total of $1.2 trillion in student debt. It is a huge number, but let’s break it down to see why so many experts are predicting that the ramifications of this statistic could “prove to be one of the more painful aftershocks of the Great Recession”.

Let’s look at the numbers. The average student loan in 2005 was $US17,233.  By 2012 that number had risen, according to publicly-listed credit analysts FICO, by 58 per cent to reach $US27,253.

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