Report: Student loans exceed credit card debt

Here's a statistic that should make us sit up and take notice:

Americans now owe more in student loans than they owe in credit card debt.

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This is the result of two factors: people paying down credit cards and incurring more student loan debt, Mary Pilon reports in The Wall Street Journal's Real Economics blog.

Mark Kantrowitz, publisher of FinAid.org and FastWeb.com, provided the figures on outstanding student loan debt: He estimates the total at $829.785 billion. That contrasts with the $826.5 billion Americans owe on credit cards and other revolving accounts, the WSJ reports.

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The amount of student loan debt has risen steadily, even before the recession, as the cost of higher education rose dramatically. The average bachelor's degree graduate in 2008 owed $23,186, according to FinAid.org, which has extensive statistics on student debt. Post continues after video.

Consumer protections for student loan borrowers are significantly less than for consumers who take out nearly any other kind of loan, Student Loan Justice pointed out in a news release:

While credit card borrowers enjoy the fundamental consumer protections afforded all other borrowers with all other types of debt, federal student loan borrowers enjoy almost none of these protections.  Not bankruptcy protections, not statutes of limitations, not truth in lending laws, not state usury laws ... nonprofit guarantors are even exempt from fair debt collection statutes ....

Taken together, this revocation of consumer rights has produced an inherently predatory lending system that succeeds when the students fail, one that wields powers over the citizenry the likes of which have never been seen in this country, one that causes inflation, poor federal oversight, and other systemic failures at the highest levels. Most importantly, this lending system is literally destroying lives, families, and communities ....

You can find stories of students struggling to pay their debts at Student Loan Justice and at The Huffington Post. A young woman mentioned in the Huffington Post story is trying to start a business as a freelance photographer with loan payments of $2,000 a month.

Not only can student loan debt not be discharged in bankruptcy, it sometimes outlives the borrower, as Pilon reported in a previous post about a family left liable for $44,500 in private student loans when their 25-year-old son died. (The father had co-signed the loans.)

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Conventional wisdom had once been that students and their parents shouldn't hesitate to borrow as much as they needed to attend the best colleges. But in recent years, students, parents and others are suggesting that students weigh the amount they're borrowing against the income they're likely to make in their chosen careers.

Ron Lieber of The New York Times wrote earlier this year about 26-year-old Cortney Munna, who borrowed nearly $100,000 to get a four-year degree in religious and women's studies from New York University. She makes $22 an hour and faces monthly loan payments of $700. Lieber wrote:

So in an eerie echo of the mortgage crisis, tens of thousands of people like Ms. Munna are facing a reckoning. They and their families made borrowing decisions based more on emotion than reason, much as subprime borrowers assumed the value of their houses would always go up.

Meanwhile, universities like NYU enrolled students without asking many questions about whether they could afford a $50,000 annual tuition bill. Then the colleges introduced the students to lenders who underwrote big loans without any idea of what the students might earn someday -- just like the mortgage lenders who didn't ask borrowers to verify their incomes.

The financial reform bill approved this summer will bring private student loans and loans from for-profit career colleges under the oversight of the new Consumer Financial Protection Bureau, Kiplinger's Personal Finance reports, but it remains to be seen whether that oversight will bring about significant changes in student loan practices. The legislation also creates a private education loan ombudsman.

In the meantime: Before you borrow money for higher education, do the math. ALL the math, and calculate how much you'll owe and what your payments will be when college is over.

More from MSN Money:

• What's a master's degree worth?
• How can you pay for college now?
• 11 ways to graduate with less debt
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• How to blitz your college debts