Manage Student Loans With Your Smart Phone? Eh.

Smartphone_Johan_Larsson_CCFlickr There are some great mobile apps and phone-friendly websites sites that help us better manage our money and credit, many of which I’ve written about for Credit.com. But I’m not convinced a new mobile service intended to help borrowers manage their student loans is really going to help stem the growing rate of student loan defaults.

Here’s the news: The American Education Services and FedLoan Servicing, now allows borrowers manage and review their student loans and make payments via their smart phones by hopping onto MyFedLoan.org or AESSuccess.org.

[Related Article: Boost Your Credit Score: 7 Helpful Apps]

Here’s the reality: Students are graduating with an average $24,000 in student loans. The amount of student loan debt is—for the first time ever—more than our country’s total amount of credit card debt. The weak job market is making it tough for graduates to find work, and those who are lucky to find work still have a tough time making ends meet, as the cost of living rises faster than wages. It’s no surprise then that the student loan default from 2008-2009 was about 7 percent, compared to 5.2% in 2006—an extremely conservative number in my view. Many more are falling behind on their payments. According to new research from the Department of Education, more than a fourth of borrowers surveyed had fallen behind on their student loans but hadn’t defaulted.

The ability to pay back student loans is not for lack of technology. It’s for lack of money.

Of course, the companies involved don’t pretend their technology is going to solve all the world’s problems with student loans. They’re likely just trying to keep up with the times and do what they can to address what they know is a crisis, which is respectable.

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If only there was more effort placed on creating real, effective solutions to help struggling borrowers either modify their student loans or, I dare say, get a bailout. Federal student loans do have some flexibility, but private loans are still likely to turn into a nightmare if a borrower can’t pay them back. Neither federal nor private student loans are dismissible in a bankruptcy unless you can prove extreme, dire financial circumstance—and even then it’s up for debate.

Image: Johan Larsson, via Flickr.com