More college graduates are delinquent on repaying student loans
Borrowers are delinquent when they are behind on payments, which can affect their ability to get a good rate on any future loan, including auto loans and mortgages, and will affect their credit reports.
For Younger, the problems started as soon as she left school. She couldn't find a job that paid enough to cover basic expenses plus the loan payments.
"It began to overwhelm me," Younger said. "Do I pay my electric bill or pay back my loans? I'm not able to make my payments because I need four new tires to drive my children around."
The number of college graduates with debt increased from less than half in 1993 to two-thirds in 2008, according to the Education Department. And the average debt is going up sharply — to $23,200 in 2008 from $18,650 four years earlier.
If they don't catch up with payments, usually after nine months for federal loans, delinquent borrowers default. That makes them ineligible for new loans or grants, and the government can seize their tax refunds, garnish their wages, withhold public benefits such as Social Security or charge significant collection fees.