While often viewed as “good debt,” student loans may be among the most toxic liabilities, according to a recent report by the Wall Street Journal.

Unlike credit card debt, student loans cannot be discharged through bankruptcy. Nor can they be foreclosed upon, as in the case of an unaffordable mortgage. Still, about 60 percent of federal and private student loan debt is in default or deferment, according to the report.

A 2003 graduate from medical school, Michelle Bisutti has watched $250,000 in student loans grow to about $555,000. This was caused by defaulted loans, compounding interest rates and a “collection cost” fee of $53,870 charged when she turned over her loan to a collection agency.

The largest private student lender, Sallie Mae offers six different repayment plans, including programs based on income, loan type, loan balance and more. Paying on time can help save money and strengthen one’s credit record.

Bisutti’s debt has so damaged her credit score that she is unable to buy a home or a new car. It has also caused her and her boyfriend of three years to put off marriage and children. At the rate she is currently paying off the balance – $990 per month – the 41-year-old doctor will be debt-free at age 70.

“Maybe half of it was my fault because I didn’t look at the fine print,” Bisutti said in an interview with the Journal. “But this is just outrageous now.”

Student loans include the Federal Stafford and the Federal Perkins loans. The standard repayment term for a Stafford loan is 10 years, at a fixed interest rate of 6.8 percent, according to FinAid.org, a website that tracks financial aid issues. Perkins loans are offered to students with exceptional need and have an interest rate of 5 percent during the 10-year repayment period.

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