Student loan debt in the U.S. is soaring, with Minnesota graduates carrying more than most state's students.
But there may be help on the way for some northland borrowers: A new financial counseling program specifically for people struggling to manage their loan payments.
Coming off the heels of a financial crisis caused by housing loans, many economists fear that another economic catastrophe is on the brink. This time due to student loans.
"Just like about five years ago we saw the foreclosure crisis as being this looming crisis that lots of people are going to be impacted by, we really see the same thing going on with student loans," says Dan Williams of Lutheran Social Service in Duluth.
According to the Federal Reserve, the delinquency rate on student loan payments is now higher than for credit cards.
"Right now borrowers have few places to turn for help," says Vicki Jacobson from the Center for Excellence in Financial Counseling.
Starting this month, Duluthians will have the opportunity to receive free student loan repayment counseling as part of a pilot program at Lutheran Social Service.
"What can be done to sort of mitigate the impact of that student loan debt on people's lives," says Williams.
The Center for Excellence in Financial Counseling at the University of Missouri developed the program and has chosen LSS to deliver it.
"Lutheran Social Service, with the financial counseling center here, has a very fine program with high quality counselors and we figured it would be a wonderful place to pilot such a program, says Jacobson.
The focus of the counseling will be to change financial habits, get borrowers on the path to repayment, and ultimately, avoid default.
"As we know, student loans are never going to go away."
Researchers will be watching the progress and results of this pilot very closely, hoping to develop a universal model for student loan help.
Lutheran Social Service is looking for participants for the new student loan Repayment Counseling Program.
If you are interested, visit Lutheran Social Service or call 1 (888) 577-2227