Student-Loan Delinquency Skyrocketing, Reportedly Hitting 'Danger Zone'

[marmar]

AlterNet / By Lauren Kelley

Student-Loan Delinquency Skyrocketing, Reportedly Hitting 'Danger Zone'
Will our politicians finally face this grim reality? What will it take?


Most of us are have seen headlines about the burgeoning student-loan crisis. As of August, for instance, student loans had topped $914 billion -- an increase of $10 billion in less than half a year, even as most debt was falling around the country. Still, we do not appear to have hit rock-bottom. A new report shows that student-loan delinquency rates have gone through the roof in recent years and that, even more troubling, we may be entering a "danger zone" in which the entire U.S. economy is at risk.

The report from FICO Labs shows that student-loan delinquencies saw a 22-percent increase in the past several years; the overall delinquency rate is now more than 15 percent.

The LA Times has more:

The worsening deliquency rate comes as loan balances surge. The average student-loan debt jumped to $27,253 last year, up 58% from $17,233 in 2005. By contrast, average credit-card and auto-loan balances declined during that period.

“As more people default on their student loans, their credit ratings will drop, making it harder for them to access new credit and help grow the economy,” (FICO Labs head Andrew) Jennings said. “Even people who stay current on their student loans are dealing with very large debts, which reduces the money they have available to spend elsewhere.”

Will our politicians finally face this grim reality? What will it take? .................(more)

The complete piece is at: http://www.alternet.org/news-amp-politics/student-loan-delinquency-skyrocketing-reportedly-hitting-danger-zone

[Manifestor_of_Light]

1. They will take your student loan money out of your Social Security check.

That is not a joke or a cartoon.

It really happens.

They can't be discharged in bankruptcy. Neither can child support.

[shanti]

62. actually

someone posted here to a similar story about financial aid that you CAN discharge it in bankruptcy under very narrow, extreme conditions. not common, but possible.

[Egalitarian Thug]

69. Technically true, but there is an unspoken (?) rule that makes bankruptcy Judges block

consideration of dismissing these loans.

[KansDem]

2. Time for TARP2

"Troubled Academic Resources Payback"

Why not?

[Maven]

9. The problem is, if there is any bailout by this administration it will be for the servicers/banks

who will continue destroying the lives of borrowers, who benefit from none of the consumer protections that attach to other types of loans.

[coalition_unwilling]

39. These loans are generally not even dischargable through bankruptcy (which destroys credit

for 7+ years), as creditors can, will and do follow student loan debtors right up to their graves (garnishing Social Security checks in some cases).

There's a word for that (and it was one evil supposedly ended by the American Revolution of 1776): "indentured servitude"

[Maven]

54. Agree 100%

It's debt slavery, pure and simple.

[white_wolf]

58. I made an OP about this issue a few weeks ago.

Sadly, several DUers seemed fine with the current system. On the bright side one of those was banned recently.

[coalition_unwilling]

82. It's a sad day indeed, when one finds that the 'bright side' is some

Neanderthal knuckle-dragger being banned.

I remember reading a bunch of DUers 'blaming the victim' - as in, those people should not have borrowed the money and, if they did, they deserve whatever they get. This despite my posting about a 25-year-old former colleague of mine who had taken on $50K in debt for some diploma mill at the mature age of 19, had defaulted after not getting any job with her worthless 'certificate,' and was now having her paychecks garnished each week to the tune of 25% of her gross. Un-friggen-believable. I was so pissed when I found out that I wrote my rep at the time (Dianne Watson). Never heard back from her but she retired right about then, so my complaint may have gotten lost in the cracks.

[demwing]

3. Nothing

It will take nothing because nothing will ever be done. No one with the power to do anything gives a damn...

[DogPawsBiscuitsNGrav]

21. They'll do something about it. They'll give the banks a big fat check from the taxpayer and they'll

still make the students repay their debt to the government. The worst part of this is the students would probably be happy to pay the debt if there were any jobs for them. No one wants to talk about job creation or turning the economy around. Well, they talk about it, but that's all they ever do is talk. So yeah, no one gives a damn.

[Lugnut]

4. Surprise, surprise.

My daughter has a master's degree and she's working as a temp. The job is the only one she could find.

http://www.democraticunderground.com/10022284518

[JDPriestly]

5. There is a shortage of good jobs.

And we do not need H1-B visas.

If there was ever proof that we do not need H1-B visas, this is it.

We also should tax outsourcing. Companies that hire people in India or the Philippines to provide technical services to Americans or to process legal or financial data or any other reason should pay hefty taxes to support student loan forgiveness, pensions and disability and Medicare and Medicaid in this country. Those companies are stealing from American workers and our government -- stealing jobs, income and tax revenue. Those practices should be heavily taxed.

[reteachinwi]

6. Student debt jubilee

But there is one deep pocket that could pull it off—the Federal Reserve. In its first quantitative easing program (QE1), the Fed removed $1.3 trillion in toxic assets from the books of Wall Street banks. For QE4, it could remove $1 trillion in toxic debt from the backs of millions of students.
http://www.yesmagazine.org/new-economy/a-jubilee-for-student-debt

[Demo_Chris]

10. Wait, so the typically affluent kids who went to college get it for free...?

And the poor kids who never got the chance to go get the bill. Seems a bit backwards to me.

Note: I 100% support free education, for as long as you like, for everyone. I think this is something we can EASILY afford as a nation. But I do not support free education for some and nothing for others.

[Maven]

11. Most of the kids who borrowed did so because they needed the $ to go to school

Not because they were affluent. Seriously?

[Demo_Chris]

16. Seriously. There are a whole lot more affluent than poor in college

And the better the college the more likely this is to be true.

In any event my question or objection seems reasonable to me. I have no problem with free education for ALL. I very much have a problem with one-time exemptions and free education for some.

To me, it's as nonsensical as the calls to forgive everyone's mortgage. That's a fantastic deal for the person with a five-million dollar home in Malibu, but less good for the poor sucker currently renting or making payments on a 20K doublewide.

[liberal_at_heart]

25. almost all of my daughter's friends are going to college on mommy and daddy's dime

Our daughter will be going to community college and then taking out loans to go to a university.

[fasttense]

29. It's NOT the rich kids who are borrowing the money.

That makes absolutely no sense. Why would a rich brat borrow money and pay interest, if they have the money? The rich sell their stocks or borrow from Mom and Dad to go to college. They don't take out student loans. Ask Mitt what he did to go to college or what he suggests student do to afford college.

Now if a person were starving would you complain because someone gave them free food when you had to pay for your food? It's a one time free food offer for some, would you complain? If someone were thirsty would you scream if someone gave them free water while you had to pay a water bill? It's a one time free water offer for some, would it be "fair"? There are programs for the homeless where they get free lodging, yet you pay for your home or rent. It's only offered to some and not everyone can get it.

So, I really have a problem with people who feel cheated because they wont be able to get their loans forgiven if we forgive the loans of others. Or those who feel it's somehow unfair if we rescued homeowners and students from our abusive capitalist system. Yet do you hear those same people complain when we bailed out all the rich banksters but not the smaller, poorer banks. They don't seem to mind the inequity of saving the uber rich from their own stupidity but try and help a poorer person and suddenly it's NOT "fair".

If you are concerned that the uber rich, those who own million dollar homes in Malibu, will take advantage of a program that is designed to help the poorer person then you are way too late to the party. The rich are already taking advantage of those programs. Just look at the bankster bailouts, the subsidies to oil corporations, and the farm bill. The rich are taking in millions and billions from those programs.

But if truth be told, it would be easy enough to design a student loan forgiveness program that would exclude the rich. It would be easy enough to design a mortgage forgiveness program that would make ineligible the million dollar home in Malibu. It's a simple system to put in eligibility requirements. It's been done before. It's NOT an excuse for letting the middle class and poor suffer while the rich are bailed out.

[Demo_Chris]

37. I guess for some reason this is difficult to understand. Let me try another way

Who is more likely to send their kids to college:

A. President Obama's "middle class" tax cut recipient earning $399,000 a year ($30,000 a month)

or...

B. The average Walmart employee earning $17,000 a year

If your answer is that they are both equally likely to send their kids to college, you are mistaken. And you are equally mistaken if you believe they enjoy the same opportunities in any other way. You are arguing in favor of a special taxpayer funded program to funnel a trillion dollars in debt forgiveness to the children of the wealthy. Kids with affluent parents get free college, kids with poor parents get the bill.

If you want to make education free for ALL, along with free housing and food and all that, plus equal access to the same schools, then you have my support. If not, then hell no.

[aquart]

41. You are painfully wrong.

Disgustingly so.

[obnoxiousdrunk]

44. +1. Only rich kids go to college.

[KamaAina]

46. Hell, I went to Yale.

So I must be loaded.

[Demo_Chris]

49. Do you believe that your Yale education should be free?

If so, I am totally fine with that, but only if you support ALSO providing that same free education to everyone.

I seriously do not see what is so difficult to understand about this concept. Most of you seem to be arguing that you deserve a special one-time only cash reward because you were awesome enough to go to college -- in your case an Ivy League elite school. Seriously, what the hell?

That's not liberal, that's not even slightly left, that's the Paul Ryan Bootstraps Bonus plan.

[KamaAina]

50. No. I'm merely snarking on the notion that "only rich kids go to college".

In fact, because of their large endowments, the Ivies are better at giving financial aid than other schools. All save Brown have need-blind admissions, and most (if not all) commit to meeting their students' demonstrated financial need.

[Demo_Chris]

48. If I am "disgustingly" wrong you should have no trouble providing data

Go ahead and post a link to the study showing that poor children are as likely to go to college as wealthy children.

[Egalitarian Thug]

57. This only works when you ignore imporatant numbers. Try this;

Which sample is greater, A. or B.?

The child of group A is more likely to attend college, but there are many times more children of group B.

[JoePhilly]

76. That is correct.

I was a lower middle class kid. Parents had no money.

I was accepted to a great private University, and borrowed lots to actually attend.

In high school, I was part of a group of about 14 guys from the same economic status. Of that group, only 4 graduated from college. Me included.

Those who did graduate found creative ways to pay for it. The others, some of which were accepted to colleges too, could not navigate the financial obstacles.

Those 4 who graduated now have far greater net worth totals than our high school peers.

If the others could have figured out how to navigate the finances, they'd probably be doing better financially today as well.

My son is going to college now. He is not scraping is way through. I'm paying for his education, just as my parents WISHED they could have paid for mine.

The GOP has always been for keeping college out of the reach of the children of limited means. Every new college graduate is a competitor for the rich kid.

I remind my son of this often. He's currently on the other side of the wall.

[Egalitarian Thug]

78. Absolutely, but it's not the GOP, it is the ruling class and we have a whole bunch of them in

this party as well. If we accept that there is a limit to how many can be educated (I don't, but that is a different topic), access to wealth should not be any factor in the decision of who gets the opportunity.

[fasttense]

92. You are arguing apples and oranges.

Are you concerned about who is attending college or are you concerned about who is taking out loans to go to college?

Yes, many, many more uber rich brats attend college than middle class or poor.

But many, many more middle class and poor students take out student loans than do uber rich.

"Only about 37 percent of federal student loan borrowers between 2004 and 2009 managed to make timely payments without postponing payments or becoming delinquent." http://www.asa.org/policy/resources/stats/default.aspx

Now if all these students who are taking out loans are so rich, parents making $300,000 a year is very rich, then why are they so delinquent? Mommy and Daddy can easily help their kids to make the payments and therefore NOT incur penalties and late fees.

Here is another little fact:

"Although the percentage of students who borrow decreases as family income rises, students from all income groups take out student loans." http://www.ohe.state.mn.us/mPg.cfm?pageID=1342

So I say again, student loan forgiveness programs can be designed to insure the uber rich do NOT take advantage of the programs. But you know what? If a few rich kids get their loans forgiving so what? We have not instituted FREE EDUCATION for All so in the meantime a student loan forgiveness program is the closes we can get. By the way it would also seriously improve the economy.

[Demo_Chris]

94. Okay... (cont.)

So let's do a program that exempts kids with parents who are well off -- say 100,000 a year for family income. And rather than forgiving debt as a one time thing, we instead eliminate interest on the loan as a permanent thing. Mind you, it's a lame 'solution' that doesn't really accomplish what needs to be accomplished, education costs would still be out of control, but it would be better than what we have now.

Then again, a one time debt-forgiveness program doesn't solve the problem either. It only solves it for the group of students who happen to have debt they cannot afford today -- and the more debt, and higher degrees, and the better the post-graduate earning potential, the better they make out with this program. The former student with the Masters of Business from Harvard gets a massive amount of money, the student who just graduated from the University of Pheonix with a degree in welding sees comparatively little, and the high school senior wanting to become a Teacher gets nothing because he or she happened to be born in the wrong year.

[fasttense]

95. First you are assuming everyone can be a MIT grad if given enough money.

Not everyone can qualify for MIT. If a welder is my best potential, then I'll be the best damn welder I can be. The world needs a lot more welders than Harvard MBA anyway. (And welders have done a lot less damage to the world than Harvard MBAs)

Second, I agree it's a stop gap measure. All education in the US should be free for qualified applicants. The US is one of the very few industrialized nations that do NOT provide a free education (even college) to their children.

[Demo_Chris]

104. Then we are on the same page. Education is our nation's BEST investment. In my opinion (nt)

[a la izquierda]

33. You cannot be serious.

I grew up dirt poor and mortgaged my future for three degrees. I have a job in my field and Sallie Mae wants $1000/ month, despite the fact they could lower my payments to 4%. $1000/month is more than 1/3 my take home pay.

[Demo_Chris]

47. What EXACTLY are you proposing. Be specific please.

I think that I have been clear: I support free higher education for all, or failing that free education for none.

What is it that you propose? If you think it's reasonable to demand that society hand you thirty or fifty or a hundred grand in life "start up" money, what exactly do you suggest we give to the 17 year-old single mom working part time at McDonalds who had absolutely no freaking way to get to college?

In any case, if you are earning $36,000, bills or not, congratulations. You are earning TWICE the annual salary of the average Walmart worker -- Americas largest employer. And they have bills too. I understand that you are not wealthy, but my concern is fairness. So again, what's your proposal?

[a la izquierda]

51. There should be no interest on student loans.

Period. I'll pay and pay and pay, and never get out of debt because every month I don't pay the full amount, I'm in a bigger hole.
And, for your information, I sure as hell should get paid more than a Walmart worker. I have a PhD and two other degrees.

Oh, and I'm a socialist, so don't even bother giving me the fairness lecture. Educators are actually respected, and paid for their work, in socialist countries.

[white_wolf]

60. In a socialist country even the Wal-Mart worker would have a much higher living standard than here.

Seriously though, I love your post especially your solution about ending interest. Student loans terrify me. I want to go to law school, but I'm looking at the price and questioning whether I can afford it. Our whole education system has turned into a profit making scam.

[Demo_Chris]

71. In a developed modern society PAYING for school should be the last consideration

Education is an investment. But unlike an investment in, say, a bridge or a battleship, it's an investment that pays for itself forever. Even when the recipient dies of old age, it can be assumed that the knowlege they gained was passed along to their children and to society.

[white_wolf]

72. Yet here in the U.S. paying for it has to be a consideration.

I can post countless stories of law school graduates 200k in debt with no jobs. For them the investment didn't pay off. We need to do something about the price of education in this country.

[Demo_Chris]

75. I agree. I believe education should be FREE

It's not like we cannot afford it. We keep the prices where they are to provide another barrier between the elite and the proles. That, and it's just another mega-business.

[a la izquierda]

87. Everyone in this country should earn a wage...

that will allow them to live peacefully and comfortably, including Walmart workers.

[Demo_Chris]

67. Zero interest loans are a great idea, assuming they apply to everyone...

Zero interest loans are a great idea, assuming they apply to everyone and not just current recipients. That's exactly the kind of thing I can support. The government charging interest on student loans is ridiculous (in my opinion). I would actually go a step further.

I believe that there is absolutely no reason why we cannot provide free education to anyone who wants it, as far as you want to go. If we can afford 600 billion dollar defense budgets we can damn sure afford this. We already do provide this for twelve years, what possible reason could there be for stopping there? And I am including adults in this. Everyone. If someone decides at age 40 that they want to learn welding, or truck driving, or nursing, why in the hell shouldn't we send them to school? It's not as if we need more people competing for work. And education, over the long term, is not cheap -- it's FREE. So what's the problem?

As for teachers, obviously you could not know this, but I consider educators to be the highest calling one can have, and I have said so here several times. No profession gives more in my opinion. It is our teachers who stand -- unarmed and underpaid -- between their students and danger. That's Congressional Medal of Honor stuff there. Our teachers are our FUTURE.

And yes, I think you should earn more than you do.

[a la izquierda]

86. Oh heck yeah, of course 0 interest should be available to all.

And if free education were an option, I'd be all for it. My European and Latin American friends just laugh at how indebted US students must become to get ahead.

So we're in agreement. Sorry for the snark before, but this stuff pisses me off, as you well imagine.

[Demo_Chris]

90. I can well imagine (nt)

[Egalitarian Thug]

70. What intrinsic value do your multiple degrees have that justifies your to belief

that you deserve more? You seem to have a very unusual definition of Socialism.

[Demo_Chris]

73. I want the best educated teachers we can get

And I don't believe that education should require anything more than the willingness to learn. He gave years of his life aquiring knowlege that he is now passing along. We ALL benefit from this. Why shouldn't those years be rewarded?

Again, back to the subject of this sub-thread, my objection is to one-time-only special deals for current students and grads. If education is too expensive, if it is becoming an ever increasing burden on everyone but the rich, if the penalties are so great that people who can do so hesitate because of the costs, then the system has FAILED and should be scrapped.

Not as a one time bootstraps-bonus, but across the board.

[Egalitarian Thug]

77. Fundamentally, I think we agree, although I don't think loans of any type should be required

to pursue education. As far as best educated, I would point out that educational level has nothing to do with teaching. I know several truly brilliant PhDs that couldn't teach 1+1=2. Teaching is a separate, and very special skill and there is need for a person to have a profound understanding of physics to teach a five years old child.

And back to your initial reply, a one-time bonus, while not a permanent fix, would be better than what happens as we continue to do nothing.

[Demo_Chris]

79. I assume you understand that one-time forgiveness programs are unfair and regressive

[Egalitarian Thug]

80. I don't see how it would be regressive, but depending on your POV I can see how someone

would think it unfair. As I wrote, it wouldn't be a fix, but it would be better than the nothing that will be done.

[Demo_Chris]

81. Fair enough

[a la izquierda]

85. Thank you. But I'm a girl :)

And I don't think I warrant special treatment, only the ability to realistically pay my loans as borrowed, not get buried under interest. I suspect we actually agree on this.

[Demo_Chris]

91. Of course we agree. We probably agree on 99% of it. Sorry for calling you "he" (nt)

[a la izquierda]

84. Um, I teach at a university and I'm an expert in my field.

You want to go try and teach 10,000 years of Latin American history, knock yourself out. Have fun trying.

And in socialist countries, teachers are respected, as is education; I know your drill, I've watched you trash educated folks. You can claim to know whatever you need to in books alone, but it's a hell of a lot more than that.

ETA: I've published in my field and am working on a book. And oh, by the way, I've received EXCELLENT education on socialism, so you can keep your "thug"gery.

[Egalitarian Thug]

88. I don't think you have watched me trash educated people, I'm one myself. Further, you didn't answer

the question.

Education does not confer any ability to teach, nor does it justify a claim to a better life than the Walmart worker you seem to look down your nose at. The whole basis of Socialism is the community and the community needs both University professors and Walmart workers, it doesn't work without either, so again, what is the intrinsic value that justifies your belief that you deserve more then they?

[a la izquierda]

89. Are you friggin' serious? You bore me.

Training, my dear, confers an ability to teach for some. But by all means, go teach with no education (another word for TRAINING).

Where in hell did I say that the community doesn't need Walmart workers? Wait, those words never appeared on your screen. I was raised dirt. poor. My husband has precisely no post-high school education. I don't give a crap what people do for a living, but if you think university professors and Walmart workers have the same jobs (that's essentially what you're saying in your cute little way), you're high. I wouldn't do what Walmart workers are subjected to, as I've been there before.

Now, I'm really bored. I'm going to flounce off to my ivory tower and look down my nose at the serfs.
Wait, I totally never do that. I actually work in the community too, and volunteer and stuff. And now I have to, you know, go do my job.

Perhaps I mistook you for one of the many vocal critics of college educations on DU. They're out there.
Cheerio comrade.

Have a read. Finland's not socialist, you know, but probably close enough to socialism to actually function (because socialism is a good idea in theory, but practically, no matter how you or I may desire it, it wouldn't work for the US)
http://www.smithsonianmag.com/people-places/Why-Are-Finlands-Schools-Successful.html

[Egalitarian Thug]

98. That's exactly my point, thank you. You are a Socialist, yet don't seem to understand that

any community needs and is comprised of the whole range of skill talent and education. Finland pays and treats its teachers like doctors, but it doesn't feel that either of these professions is entitled to be millionaires. As any society becomes less hierarchical, more egalitarian, everybody benefits. You need more money than the Walmart worker because you are in debt because you got your degrees in the American for-profit system, not because what you do is more necessary than our Walmart worker.

Society needs both neurosurgeons and trash collectors. The neurosurgeon is more specialized and possesses a special skillset, but society will shortly fall apart without the trash collector whereas it can do fine without the neurosurgeon. So, which is of more value?

And a professor should probably know the difference between teaching and training.

[kestrel91316]

101. Sneering at a college professor is something I tend to see RWers do. Not Democrats.

So now you've piqued my curiosity. I'll have to keep an eye out for more interesting attitudes coming from you.

[Egalitarian Thug]

102. Oh my, I'm in trouble now. Do you understand the difference between teaching

and training? Or how about addressing the point?

ETA: What we have done to the profession of teaching is a large part of why we are among the most ignorant people in the first world. Just so we're clear, I think we need far more and far better teachers, that they should be paid like doctors, but I also think that doctors are grossly overpaid here. Like the name says, we are all in this together and we are all necessary, none of us is entitled to more because of an accident of birth and that includes the opportunity to do with our lives what we will. Money, and that is what this argument boils down to, should not be a factor at all.

I am not a right winger, I'm the other group some of DU loves to hate, a lefty.

[kestrel91316]

108. We don't generally call ourselves "lefties", lol. That would a RW epithet.

[Egalitarian Thug]

109. Yeah that Ed Schultz, as just one example, is such a blatant Reich-wing nut.

Is that all you got? A simple-minded assumption that because I'm critical of the party, and useful idiots that blindly go along with it no matter how badly they act, that I must be a Reich-winger?


"I represent the Democratic wing of the Democratic party." "If we don't fight hard enough for the things we stand for, at some point we have to recognize that we don't really stand for them." "Sometimes, the only realists are the dreamers." "The American polity is infected with a serious imbalance of power between elites and masses, a power which is the principal threat to our democracy." - Paul Wellstone (A great Liberal Democrat)

[Recursion]

68. The morality of jubilees is always interesting

See: Son, Prodigal, Parable of the.

[Demo_Chris]

74. I prefer pre-mortem justice and equality to post. But that's just me. :)

[Rex]

7. Maybe some of the banksters can toss in some pocket change

since they went way over the 'Danger Zone'.

[smirkymonkey]

35. +1000

[reformist2]

8. Rising tuitions, declining wages... something's gotta give.

[joeunderdog]

30. Ya mean, like the college loan "Bubble?"

Were it not for the fact that these loans can't be forgiven in bankruptcy, we would be hearing a lot more about this. Instead, this problem is the modern equivalent of sharecropping. These kids will spend year after year unable to move on in life because of these unrealistic burdens.

[coalition_unwilling]

42. Not so much 'share-cropping' as it is 'indentured servitude,' but I definitely

take your point, my quibble about metaphor notwithstanding.

The whole post-secondary education edifice is rotten to its core and awaiting only a latter-day Martin Luther to tack 95 theses to the doors of its castle.

[white_wolf]

61. That's one reformation I'd join in. n/t

[coalition_unwilling]

83. Occupy Los Angeles made a token effort to address this with its free

'People's University'. Of course, the effort died still born when the LAPD under Dem Antonio Villaraigosa busted the camp and scattered the University's library and faculty to the four winds. But the People's U. was definitely a refreshing breath of fresh air.

I'll never forgive Villaraigosa for that, nor will I ever vote for him for any office ever again.

[smirkymonkey]

13. This is sick. I am at the point where I just cannot afford to

pay my monthly student loan payment anymore. It's growing at a rate faster than I can pay it off. It seems so pointless for me to send them anything because it's barely a drop in the bucket and with compounding it is just getting out of control,

I honestly don't know what to do anymore. I can't afford to pay them. I am absolutely desperate.

[magical thyme]

14. have you looked into the income based repayment program?

Is your loan a stafford or private?

That program saved my life. Literally, I was getting that desperate...

[Yo_Mama]

15. Apply for income-based repayment

http://studentaid.ed.gov/repay-loans/understand/plans/income-based

[smirkymonkey]

18. Thanks to both of you. I appreciate it.

It is still a ridiculous amount to pay. I can't even keep up with the interest. I don't quite know what I can do except default. There is absolutely no hope for me. The situation is impossible.

[Yo_Mama]

19. The income-based repayment program just has you paying a fixed percent of income

If you default, you'll be in a world of trouble. Just do this.

[smirkymonkey]

52. I am actually paying an income based repayment.

However I live in a very expensive city and pay very high rent. I have been dipping into my very small savings to pay my student loan and I am almost out. I am not sure how I can live after I am completely tapped out. I pay about 700 per month in student loan payments and 1800 in rent. It's not easy.

[hatrack]

17. Well, better man up and prepare a gigantic rescue package . . . .

. . . for the banks.



Forgive me, but my cynicism knows no bounds when it comes to financial issues like this, given the events of the past decade.

[Yo_Mama]

20. You mean the taxpayer

Most of this is owned or guaranteed by the federal government

[Matariki]

22. GOOD

Maybe something will get done about this travesty of an overpriced education system.

[Fire Walk With Me]

23. K&R

[Behind the Aegis]

24. It has been out of control for awhile.

I will be 44 in May and I am STILL paying off my student loan. My father finished paying his while I was in college! It doesn't help that the interest rates are absurd. We have paid over $10,000 in the past 5 years, and my total amount has dropped a whopping $2400!

[tpsbmam]

106. That's criminal.....or it should be. Loan sharking is now legal and

is all the rage among banksters & apparently our government! This truly is obscene. It doesn't pay to be American anymore -- most of us would do far better in many foreign countries.

[tama]

26. Occupy student debt

http://www.occupystudentdebtcampaign.org/

http://occupystudentdebt.com/

[OneTenthofOnePercent]

27. If you had the money to payoff your Student Loans, but didn't... would that be immoral?

Not a hypothetical question.

In light of the nearly bursting student-loan bubble, something will have to be done. I'm thinking something in the neighborhood of partial forgiveness or interest readjustments.

So lets say a husband and wife had close to $100k in student loans... that's not an unreasonable/uncommon figure for TWO persons fresh out of college who have been through all sorts of school. However, lets say the couple both have good jobs that, on top of a mortgage and other living expenses could simply PAY OFF the student debt in as little as 2 YEARS! In other words, they have more than a fair bit of disposable income.

Would be immoral to simply pay the minimum loan payments of defer them (for whatever qualifies for deferment these days) in the hopes that some relief may be coming to former students when this bubble bursts? I'm not talking about skipping payments or defaulting, just simply paying minimum or maybe even legally deferring... considering the fact that they pretty much just pay them off.

Savvy or immoral? or both?

[Festivito]

28. Another avenue of debt WE, US, WE will have to pay.

Eventually, bankruptcy will have to change to discharge these debts more and more often. The banks and already-paid "education" systems will get their share.

And, our major wealth being in the hands of the few will stagnate with its fewer needs, thus fewer items being bought, thus fewer items being built, thus fewer jobs, thus fewer repayments. And then it falls apart as the rich's money can no longer make its percentage return.

It's sick. It's our problem.

[fasttense]

31. And now we are heading into a double dip recession so I see this problems only

getting worse and worse and worse.

Now all those people with student loans should march on DC and demand a student loan discharge program. Just sitting around complaining wont change a thing. Killing yourself to pay back rich banksters who get free money from the Fed wont change a thing. The only way students and former students are going to change this corrupt mess of economic system is to protest loudly and continually.

[xchrom]

32. du rec. nt

[a la izquierda]

34. K&r from a PhD with six figures of federal debt.

[smirkymonkey]

36. K&R, from someone in debt yo SallieMae

well into the six figures and compouding every day.

[coalition_unwilling]

38. Indentured Servitude, v. 2.0 - n/t

[dkf]

40. Too bad we can't blame the banks for this. Maybe it's the Government's fault?

Seriously people, we are in a college education bubble with unaffordable prices and waaaay too much debt.

[kestrel91316]

103. Like pretty much everything else, this problem can be laid right at the feet of the RW and

the corporations. They set out to destroy this country just so they could destroy liberals and Democrats and the poor and gays and women. They outsourced all the jobs and nearly bankrupted the country because they put money before "the general welfare".

When people go to college to get a degree that they can reasonably expect to get a good job with, and then by the time they graduate all those jobs have been outsourced or are obsolete, what do you expect?

Don't you DARE imply that it is the fault of students. Much of this debt is for schools that are for-profit and known to just be ripping people off. Senator Harkin worked for years on that issue, trying to solve the problem, but Republicans blocked him at every turn.

[dkf]

105. You honestly think this is only or mostly for profit collages?

You are pretty out of touch if you think so. My office is filled with people sending their kids to traditional universities, and the amounts they are citing to send them are CRAZY. $40,000 a year is the low end.

I've been told dental school is $100,000/year!

One co-worker is amazed her kid is contemplating the state college and is trilled at the thought, realizing they can get a more prestigious masters degree later.

[aquart]

43. They took $6,000 in "points" off a $20,000 loan.

So far as I'm concerned, they took the interest off the top and they can go to hell. We tried to hand them back the $20,000 but they weren't interested.

And, yes, they have threatened to take my Social Security.

[Travis_0004]

107. So you are refusing to pay the interest you owe?

[reformist2]

45. So, how do they control education costs in Europe???

[dmallind]

53. Where I have knowledge about this, they rigorously control access

The trick in a US university is getting out with a degree. The trick in Europe is getting in in the first place. While it's not impossible to get in as a non-traditional 18 yr old from HS, it's very difficult indeed. While admission standards vary widely, there are few to no degree-granting universities that accept the marginal academic results acceptable to many large US universities. Again Europe is not monolithic, but my experience is fewer go to college, far fewer go if they are not academically very capable, and far far fewer go any other way than straight from high school.

They are also far more focused. A Brit getting a Geology degree does not take Women's Studies or UK History or French. She takes Geology and its component subjects. This means fewer staff needed for electives. There certainly are professors that teach those subjects - but they teach them to students reading that subject without having to handle 90% of incoming freshmen.

[ProSense]

55. The best way to address this is

student loan forgiveness. Remember, President Obama already removed banks for federal student loans and has expanded access to Pell Grants.

Fairness For Struggling Students Act Would Reform Private Student Loan Bankruptcy Rules

The Huffington Post | By Tyler Kingkade

Three U.S. Senators unveiled legislation Wednesday to reverse a 2005 change in bankruptcy laws that makes it nearly impossible to have private student loan debt discharged.

The Fairness for Struggling Students Act of 2013 is cosponsored by Sens. Dick Durbin (D-Ill.), Sheldon Whitehouse (D-R.I.) and Jack Reed (D-Ill.). For Durbin, a high-ranking Democrat, it's the return of legislation he authored in the previous session of Congress.

Student loans are the largest form of consumer debt, topping $1 trillion nationally, but they're the only type not eligible for bankruptcy. Rich Williams, a former higher education advocate for U.S. Public Interest Research Group, described private student debt as "a special circle of bankruptcy hell reserved for dads who avoid child support and tax evaders."

Federal loans haven't been eligible for discharge in bankruptcy since 1978, to safeguard taxpayer money, but it wasn't until 2005 that this was extended to private student loans. Durbin's office noted in a release that private student loans are quite different from federal loans. Government-issued student loans carry mostly favorable terms, lower interest rates, income-based repayment plans and more deferment and forbearance options. Private student loans often have double-digit interest rates and have no income-based repayment options.

- more -

http://www.huffingtonpost.com/2013/01/23/fairness-for-struggling-students-act_n_2538832.html

[Sheldon Cooper]

56. I think the student loan racket is indentured servitude.

I fully support paying back one's obligations, but I also think you should be able to discharge at least some of it through bankruptcy. Maybe once you pay back an established %, you can discharge the rest, with the same penalties as in any other bankruptcy. Or after ten years of payments, the remaining balance could be discharged through bankruptcy. Anything is better than the system we have now.

[Recursion]

63. So let's go to equity instead of debt

Students pay their alma mater 5% of everything they make over a certain amount.

[Sheldon Cooper]

64. That would be fine if they're working in the field for which they studied.

If they're only able to get a McJob, I'm not sure that's fair either. We allow people to discharge all kinds of unsecured debt, I don't know why student loans have to be treated so radically different. There is NO grace or mercy given with regard to them, and that seems wildly unfair to me.

[Recursion]

59. I finally just caught back up with mine

I borrowed $74K for undergrad and grad school

I've paid $40K total already

I still owe $72K.

Something is wrong with this picture.

[white_wolf]

65. I may be very naive here so feel free to tell me why this is impossible, but...

interest seems to be the real killer here. Perhaps we should limit the amount of interest that is allowed to accrue, in other words limit the amount of profit a bank can make from a loan. Say the principal of the loan, plus 10% total in interest. The banks would still make a decent profit, but it wouldn't be so crippling. 10% is a fair profit margin. Your situation is highway robbery.

[Recursion]

66. They recapitalized my interest while I was deployed in the military for two years

Is it legal? Yes. Does it make me want to take a flamethrower to Sallie Mae? Yes.

(Note to anyone alerting or jurying: I do not actually want to take a flamethrower to Sallie Mae.)

Also: yes, there was a way for me to stop that, but I screwed up one of the 10 forms it required, and had other things on my mind at the time.

[davidpdx]

93. Oh come on, you know you want to take a flamethrower to them

They are a horrid company.

[Apophis]

97. I do.

I've borrowed a total of $80, 000 to pay for undergrad and grad school. I'm afraid to wonder how much that'll actually cost after I start repaying it all back.

[Apophis]

96. The tuition at my college keeps going up and they're offering less.

One credit in grad school costs $397. When I started grad school two years ago a credit cost $325. Thankfully I only need to take one more credit after this semester. But grad school has added $40, 000 to my student loan debt and I'm wondering if it was really worth it?

[white_wolf]

99. Tuition is raised everywhere at my public university. I have to wonder where the money goes.

Forgive for me being cynical, but I'm willing to bet the guys at the top got a nice raise this year. Of course the workers on the bottom probably didn't get a damn thing for it and the students aren't getting much either.

[Apophis]

100. Same with my university.

Programs get cut, admin gets raises, and all sports continue to get full funding.