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SALT LAKE CITY — Recent reports show there is a growing number of people with student loan debt, but not all of those people are finishing school. Financial counselors say this debt could become a bigger problem for dropouts.
According to a recent NBC report, the percentage of students depending on loans grew from 47 percent to 53 percent between 2001 and 2009. Students who don't finish college are more likely to default on their loans, and generally make less money than people with degrees.
Some financial counselors in Utah said they see a lot of people who need help dealing with this kind of debt. AAA Fair Credit Foundation Director of Counseling Services Will VanderToolen said it can have a ripple effect into other aspects of their lives.
"Future employers that they're looking at not only see that this individual might not have finished their degree but they defaulted on loans that have hurt their credit, as well. We have employers now, quite a few, that are looking at credit reports," he said.
People can call their lenders to see if they qualify for some kind of hardship, or if they can change their payments, VanderToolen said. But, sadly, many people just don't.
They will collect. They will get their money back, somehow.
–Will VanderToolen
"Too often, we see an individual who is panicked, frustrated or who doesn't really know what to do or what their rights or options are," he said.
There are different levels of impact that can happen from defaulting on a loan, he said. They can vary, depending on what kind of loan it is. He said student loans are a form of debt that will not go away.
"They will collect. They will get their money back, somehow," VanderToolen said. "A student loan is not a debt that can be discharged in bankruptcy."
He warned people who are considering applying for a student loan to take only what they need.
"When they use it, it should only be used for education, not for electronics or spring break or some of those other items that, unfortunately, we've seen consumers use the student loan debt for over the years," he said.
