5 surprises behind the student debt crisis

By now Americans have become inured to reports about the nation's college debt crisis. Students have borrowed well over $1 trillion in their pursuit of degrees, and for some, repaying that debt has become a lifelong struggle.

What has largely been missing from the conversation, however, is an examination below the macro level about why so many Americans have gotten into trouble with their student loans.

In a new report titled, Why Student Loans Are Different, the New America Foundation looked at the problem on a more intimate level by talking with individual borrowers who gathered in focus groups across the country.

Much of what the conversations uncovered was surprising. Here are five findings:

It's easy to delay payment. Many borrowers said they heard through their loan servicers that they could simply delay paying their federal student loans for months or even years, and so they did. Some said they learned about the ability to temporarily suspend payments from unexpected sources such as mortgage brokers and the IRS. It can take just a phone call to suspend a loan.

The minimal hurdles for delaying payments, the report said, "seem to enable borrowers to push student loans down on their list of bills to pay."

Extending debt payments adds to the load. While it's relatively easy to suspend payments, what the borrowers often didn't realize is that the interest on their loans continued to accrue, which made the eventual debt load even worse. Choosing to repay the student loans well beyond the standard 10-year period also added to their debt obligations. Most borrowers said the ability to stretch out the payments for decades with lower monthly payments did not seem like a benefit.

Borrowers in these situations expressed feelings of hopelessness. "These feeling were particularly pronounced for the borrowers who said their loan balances grew even though they were making monthly payments," the report said.

The penalties didn't seem so bad. If you stop paying your utility bill, you lose your electricity. If you stop paying your mortgage, you lose the house. But if you stop paying student loans, the lender can't take back your education. The credit scores of delinquent college borrowers take a huge hit, but some of these individuals already had poor credit. Protecting their credit score wasn't a big enough motivator for some borrowers to make repaying their student loans a priority.

Student loans' unique features are problematic. Borrowers are more likely to struggle with student loans because they're starkly different from loans for cars, homes and other purchases. With other types of loans, borrowers know how much their payments will be and whether they can afford that amount. They start paying down their loans immediately.

In contrast, borrowing through student loans can be an afterthought for years until the payments must begin. People in the focus groups said they were surprised by how much they owed. What's more, unlike a car loan, borrowers have to deal with what can be well over a dozen loans, and they need to make decisions on each of them.

Students view loan proceeds as free money. Borrowers also said they got into trouble when they received refund checks from their colleges when the amount they could borrow exceeded their costs. Often the recipients said they considered this free money. Many students just banked the checks without realizing that the amounts would be added to what they ultimately owed.