Posted on 03/20/2017 5:31:11 AM PDT by IBD editorial writer
Education: President Obama had a great idea back in 2010: nationalize the student loan program, and its problems would soon go away. It didn't happen. Instead, more people are refusing to pay their student loans than ever before.
In a study released last week, the Consumer Federation of America found that millions of people were in arrears on $137 billion in federal student loans in the first nine months of 2016, an increase of 14% from 2015. All told, the federal government's portfolio of student loans now stands at a whopping $1.3 trillion.
As the Washington Post notes, "What's striking about the findings is that Americans have a variety of repayment options to avoid default. The Obama administration expanded programs that cap monthly payments to a percentage of earnings, but even though millions of people are enrolled in those income-driven plans, there is still a disconnect."
Actually, there is no disconnect at all. As we noted earlier, just under one-half of millennials today believe their student debts will be forgiven, and an increasing number even use their loans for exotic spring break vacations, booze, and partying. So, by that logic, you'd be a fool to pay.
(Excerpt) Read more at investors.com ...
I had to pay off my stafford loan. They better pay off theirs!
I was often in the courtroom over the past years. I often heard young defendants tell the judge that they would pay their (fine, their costs, their lawyer their restitution, their .. whatever) “just as soon as my student loan (or grant) came in.”
American taxpayers didn’t have that in mind when they this program was begun!
Most of my student loans went to rent and utilities.
Except that time I bought a sweet Sony 5 CD player.
You get $60K in loans, have to go to work at $35K a year, net of $27K after taxes, etc, have no money left over after rent, utilities, food. Yes, you will default.
Fraud is the push that to make good money you have to get a college degree, one that requires classes in useless things like philosophy, etc outside of what is necessary to actually perform a job.
Massive defaults are the direct result of the government backstop on loans that shouldn’t ever have been made in the first place.
Bailing out the program will only make the problem worse. Those who loaned to defaulters should have to eat the losses themselves; that is the only way to sustainably write loans to begin with.
I was grateful and thankful for the student loan programs when they came about in the late 1960s.
1) Originally passed as National DEFENSE Student loan program.
2) Then morphed to National DIRECT Student Loan Program.
3) Because of politics moved to administered by banks instead of directly by government
4) Then back to administered directly by government for politics.
Don’t parents have to co-sign for these loans?
In many cases, the grandparents co-sign the loans. I love my grandson (6 YO), but I won't be an easy mark if I'm still around in 12 years. He'll have much better luck hitting up Nana.
Why don’t we treat them just like Delinquent Child Support, Suspend Their License, Attach Everything they Own, Criminal Prosecution. I would go 1 step further and Suspend their right to VOTE for 5 Years after no longer in Default.
The professors should have to cosign for the cost of their class.
For-profit schools have been the first target, but "nonprofit" institutions are starting to receive a bit of sunshine.
NO! and I recommend against this.
Student loans should only be available for STEM or medical majors.
Most of them, no. For a PLUS loan, they do.
I have a perfect and just solution to the student loan problem.
Make student loans dischargeable through bankruptcy.
Nobody gets hurt who didn’t thoroughly deserve it.
I have a perfect and just solution to the student loan problem.
Make student loans dischargeable through bankruptcy.
Nobody gets hurt who didn’t thoroughly deserve it.
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