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Recent college grads look for unique debt relief solutions

Anyone who has graduated from college during the last few years knows how tough the job market is. In fact, 13.1 percent of those between ages 18 and 19 are unemployed, which is "significantly higher than the national rate." The numbers for the Detroit area could be even more concerning, considering regional differences in economic improvement.

What's more is that many young people not only emerge from college with difficulty finding a steady job, but also with significant amounts of student loan debt. Without enough income to pay back the loans, it's not hard to see how the desire for debt relief at a young age can develop. Unfortunately, student loans aren't dischargeable in personal bankruptcy, which may make it a less appealing debt relief option.

This predicament faced by many young people in Michigan -- and nationwide -- is exactly why some people are looking for non-traditional ways to fund their education. A business startup called "Pave" has emerged as one alternative to traditional loans. Under this arrangement, students are viewed as investments with backers. If a student finds success in their career, they share a portion of their earnings with the "investors." This gives incentives to both parties to find success.

Although an arrangement such as the one created by Pave works around many of the problems associated with traditional student loans, it also raises questions about grappling with less traditional forms of debt. As more alternatives emerge, what will happen to the money offered to students if students are unable to find a job right away?

As young people deal with various forms of debt in an uncertain economy, they may have many more questions that deserve answers. The important thing to remember is that there are ways to effectively handle debt and personal bankruptcy may be among the options to help individuals find the path to financial security.

Source: USA Today, "Pave: alternative to costly college loans," Hadley Malcolm, March 5, 2013

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