By Al Vaughters, News 4 Reporter WEST SENECA, N.Y. (WIVB) – The CEO of the nation’s largest nonprofit credit counseling agency is sounding the alarm about the student loan crisis. Susan Keating is President of the National Foundation for Credit Counseling (NFCC), and pointed to figures that show college loan debt has now reached $1.3 trillion.
As CEO of the NFCC, Keating is considered a foremost authority on the effects of consumer debt on Americans and the U.S. economy.
The financial services executive was in town, Friday, to talk about the state of the financial services industry with local banking officials, and the staff of the Consumer Credit Counseling Service of Buffalo, the local affiliate of the NFCC, at their offices in West Seneca.
Keating said young people saddled with college debt, which is second only to home mortgage debt–and more than what Americans owe on their credit cards–has become a drag on the U.S. Economy, standing in the way of buying homes, new cars, and other consumer goods.
The answer to the crushing college debt load is complex, said Keating, but one part of the solution could be making sure students and their families understand exactly what they are signing up for when they take out student loans.
Among the things she said they should know, “how long it is going to take them to get out of that debt, what kind of income levels they will need to support eventually paying that student debt off.”
Keating put it bluntly, when speaking about the college loan crisis, “$1.3 trillion, it is larger than credit card outstandings. In debt today, second only to mortgage loans, and it is a ticking time bomb.”
The woman who leads the National Foundation for Credit Counseling, based in Washington, D.C, is in Buffalo Friday to meet with local financial leaders and share what her organization considers a disturbing trend in personal finance.
Susan Keating visited the WBFO studios and sat with reporter Michael Mroziak to share some of her message. While the nation has, in general, pulled out of the Great Recession, individual households continue to face serious challenges.
About 70 percent of American households, according to the NFCC, face some sort of issue including low savings, credit card debt, a mortgage or student loan debt.
While some numbers are encouraging, including drops in unemployment, bankruptcy filings and mortgage delinquency rates, Keating noted that there are signs that those trends may shift and start increasing.