Posted on 11/30/2012 8:44:13 AM PST by SeekAndFind
Throughout his perpetual campaigning, President Obama has made a big point about being the champion of students and young people in helping to make college more accessible and affordable and helping out with student debt --- and yet, miraculously, here we are with student-loan debt and college tuition prices both quickly ballooning, and no end in sight. Could it be that perhaps the government trying to do more to "help" prospective-and-past students is actually what's dramatically worsening the student-debt problem? From the WSJ:
Nearly all student loans—93% of them last year—are made directly by the government, which asks little or nothing about borrowers’ ability to repay, or about what sort of education they intend to pursue. …
Student lending grew rapidly in the 2000s, as did other consumer borrowing. The bulk of the loans were made by private lenders and guaranteed by the federal government. In 2010, in a money-saving effort pushed by Mr. Obama, Congress cut out the private middlemen and had the federal government start making loans directly.
Since the end of 2007, just before the financial crisis hit, total student debt has grown by more than 56%, adjusted for inflation, the new Fed data show. During that time, overall household debt—including mortgages, student loans, auto loans and credit cards—fell by 18%, to $11.31 trillion as of Sept. 30.
Is this ringing any bells for anyone else? Housing market; government taking over for the private sector; easy access to credit; bubbles going “pop!”? Jim Pethokoukis wondered yesterday if student-loan debt isn’t destined to fall victim to our burgeoning bailout culture (because we’ve got plenty of money to burn and everything), and has more of the startling numbers:
Banks already got their bailout, so is it time for loan-laden college grads to get theirs? Consider the following:
1. Student debt has climbed by 74% since the start of the Great Recession, according to a new report from Citigroup, and now approaches $1 trillion.
2. As of the third quarter of this year, roughly 11% of student loans were seriously delinquent, surpassing credit cards for the first time.
3. Default rates are also rising with 9.1% of student borrowers defaulting within their first two years of repayment.
4. Higher default rates mean lower credit scores for Generation Y than other age groups, hurting its ability to buy a first new car or starter home. Rutgers University find that 28% of recent graduates say they have moved back in with their parents to save money, and 40% have delayed a major purchase such as a house or car due to their educational debt.
Government largesse making it insanely easy for anyone and everyone to obtain big loans, without even having to carefully plan their future options and obligations, is only helping to inflate tuition prices and is saddling young people with monstrous amounts of debt — the ramifications of which nobody made them seriously consider when they decided to take it on. What’s more, young people are graduating into the slim employment pickings of the Obama economy, making it even more difficult for them to pay off their investment in the long run. This is not going to get any prettier while big-government policies continue to reign, as American Majority Action‘s Ron Meyer explained further on the Kudlow Report last night:CLICK ABOVE LINK FOR TH VIDEO
Somehow people think a college education is a must. A gotta have it regardless of cost. Halfway through most find it difficult and switch majors three or four times to ease the burden and come out with a degree in 4th. Century Tibetan Poetry or something similar. Best thing is a two year community college AA and then go for what you really want. There’s lots of people out there with a Yale or Harvard degree in something flipping burgers.
Here is a solution....along with the next overdue notice send along a form to either pay up or sign up for a domestic draft. Give em a shovel and send them off to an Obama shovel ready job site so they can dig themselves out of debt.
It hardly seems a crisis to me because if 11% are deliquent...that means 89% aren't. And if 9% default, that means 91% don't.
So what are they proposing to help the deadbeats who are deliquent, i.e. rewarding bad behavior. And those playing by the rules, making payments, or never taking loans in the first place will once again be the "patsies" for doing it the right way.
It hardly seems a crisis to me because if 11% are deliquent...that means 89% aren't. And if 9% default, that means 91% don't.
So what are they proposing to help the deadbeats who are deliquent, i.e. rewarding bad behavior. And those playing by the rules, making payments, or never taking loans in the first place will once again be the "patsies" for doing it the right way.
But the kids don’t want to live at home and go to the local community college.
If people had *any* idea of how many of these college students are living they would be shocked. Forget about sharing a dorm room with another student. LOL. It’s an apartment with a big screen, stereo, and mary jane.
A full load is now four courses so there is plenty of time to party every night, sleep late in the morning, go to the gym and then take a nap before getting ready to party again. Forget out school. Few exams, attendance not required, and download a paper or two from the internet.
If you think I am kidding, go to any college town CVS. See how much space is devoted to ‘personal products’ and now much space is devoted to candy.
No wonder kids want to go to college! And the government (us) pays for it.
The graph is deceptive because household income has fallen so much since 2007.
Get Americans back to work and this graph won’t look so bad. And you do that by stopping free trade with low wage and communist countries until our own employment has recovered.
Right - it’s a fun fest. You forgot the drinking parties too. And the kids don’t want to live in a dorm. They want to rent an apartment near campus with four or five of their friends.
So Barackaclaus may issue an edict allowing these poor kids to tear up their student loan promissory notes and then tell those of us who paid our loans off in full that our 401Ks and IRAs must be applied to the greater good?
No, something like that would not end well. Not well at all,
and I ain’t just a woofin’. There would be blood.
That reminds me: When did FR get so many sheep who say things like, “Ah, you would just roll-over and let them take your 1.) money, 2.) guns, 3. freedom, 4.) dignity.” ?
I have seen more and more of them lately sullying this site with their presence and simpering, craven comments on threads like this one and others on topics like guns and liberty.
Just one crisis after another.
Ben Ghahzi? Who’s he?
Our goal: get all kids through college or career training debt free. So far, so good. They work, save, and strategize.
That option is often cheaper than the dorm. In grad school, the worst dorm room single ran about $500/month. I found the bottom floor of a house with 3 bedrooms for $800 /month only a short 20 minute commute away near public transportation. Even with the cost of the commute, I saved a lot.
Student debt could be our new housing debacle.
I believe we are on the edge of a precipice. The Obama economy is running about as well as it can right now, and that’s not very good. The next shock is going to set off a downward spiral like you won’t believe.
If the deficit is $1.2 trillion now, what will it look like if GDP goes negative for 2 quarters and unemployment ticks up 1% or more? What will youth unemployment look like in that case? What will that then do to student loan debt defaults?
Student debt should also be considered along with graduation rate.
While I was on vacation last month, I had to get a prescription at a CVS on a college campus. I sat there for over an hour watching a parade of young women getting their meds, which I assumed were birth control pills. Constant line of 6-7 women - not one male.
It could also have been Xanax or Prozac. Many young women are on these drugs.
Setting the stage for Obama to ride in on a white horse and forgive them all. He’ll have the current thirty-and-under crowd voting Democrat forever.
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