Financial disaster for Ill. students buried in college loan debt - New York News

Financial disaster for Ill. students buried in college loan debt

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CHICAGO (FOX 32 News) -

Soaring college tuition plus chronic, high unemployment equals financial disaster for many people here in Illinois. It's a serious issue for graduates who because of interest and penalties, now owe far more than they originally borrowed.

“Don't take out private loans,” responded Hannah Moore when asked what her advice would be to college kids today.

Graduating in 2007 from a for-profit college, Hannah Moore owed $124,000 in student loans, and as the recession struck, had trouble finding work. She's paid more than $60,000 since then, but her debt has grown to $151,000. On the current payment schedule, Moore said she'll be 57 before the debt is finally settled.

“People can't afford -- or don't feel like they can afford -- to own property, to own cars and have kids and get married and all of those things,” said Moore.

Hannah's among 40 million Americans who currently owe $1.2 trillion in student loan debt. Locally, 1.7 million Illinoisans owe an average $28,028 each. Some are stuck with interest rates above 7% and private lenders who refuse to refinance at current, lower market rates.

Sen. Dick Durbin's co-sponsoring a proposal that would allow the federal government to purchase those high-interest rates and private loans, and reissue them with lower rates. He noted that student loans can't be cancelled, even in bankruptcy.

“Not student loans. They're with you to the grave. We have grandmothers who have their Social Security checks attached, because they signed on for their granddaughter's student loan,” said Sen. Durbin.

FOX 32’s Mike Flannery asked Moore if her parent co-signed the loan for her.

“Right. So, even if I pass away, they're stuck with my debt,” responded Moore.

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