Posted on 08/10/2013 9:30:26 AM PDT by reaganaut1
The Consumer Financial Protection Bureau performed a genuine public service this week by alerting taxpayers to the tidal wave of student loan defaults coming their way. Too bad the intention was also to alert student borrowers to ways they can avoid repaying those loans.
A new analysis by the bureau shows federal-backed student loan debt surpassing $1 trillion, which is nearly double what it was at the start of the Obama Presidency. As college costs have continued to balloon in tandem with federal loan and grant subsidies, students have assumed more debt. Many jobless Americans have also sought asylum from the Obama economy by returning to school.
A lot of these student borrowers upon entering the real world find themselves unable to make payments on their gargantuan loans, notwithstanding low interest rates. The bureau reports that nearly seven million borrowers or 13% of outstanding loans are in default, defined as not making a required payment for 270 days (nine months).
That headline default rate doesn't include the 8.9 million borrowers who have postponed or temporarily reduced their payments. The Department of Education allows borrowers to defer payments for up to three years if they're experiencing economic hardship or can't find full-time work.
All told, about 40% of out-of-school borrowers have defaulted or delayed their payments, which is a de facto default. The government's reported default rate will likely climb when borrowers whose temporary amnesty expires have to resume payments on their loans, which in the meantime are accruing interest.
But deadbeats need not fear. According to the bureau, "there are ways to avoid default on a federal student loan even when you think you can't afford your payment."
(Excerpt) Read more at online.wsj.com ...
What’s another trillon dollar loss. Our credit with China is still good, right?
Silly me. I’d try to pay off the loan. Then again, I am not a Democrat.
Why don’t we just give anyone but the rich free college educations and avoid the middle man? sarc
Are there any academic criteria imposed on those who obtain these loans or can just anyone get one regardless of academic performance?
Actually the Baraqqis figured out a way to bypass that unpleasant step and just create Baraqqi/Bernanke/Geithner minibucks locally.
And it worked, won the 2012 election via entitlements funded by fake money.
Wow talk about a racket.
Work for the govt 10 yrs and all loans forgiven.
Another giant bonus for govt employees....
In college in the ‘70’s there were all these “students” in their 50’s who had never had a job. They’d been students their entire lives. One day I asked one of them how he did it. He explained that when the debt load got high, he’d declare bankruptcy and start over. He’d done this several times already. He had no intention of ever getting a job. He loved student life and the student parties. (In his 50’s yet.)
They recently changed the bankruptcy law. The one form of debt, beyond taxes, that can’t be forgiven is student debt. The reason for that is the government has the repayment to of that debt financing government retirement benefits. (Yes, that’s the actual reason.)
“Another giant bonus for govt employees”
Who wants to be a millionaire?! All financed by hardworking middle America (and our Chinese friends).
I guess I would have to pay something to read the article at WSJ?
WSJ behind the pay wall . . . apparently an increasing trend among papers.
It’s actually not that easy to get your loans forgiven. I just consolidated mine to get a lower payment. I went through all options and it is very difficult to get out of paying them.
I know one thing for sure, my 7 year old daughter will never take out a loan and go through this BS I’m going through. Thank goodness she’s the only child and we’re saving for her college now.
I read the average outstanding student loan was only about $25 G’s and the payment was =< the car payment
Once we get in good and deep with the ChiComs we are going to have to stiff them.
I’m kind of looking forward to it.
My wife is just finishing up with school and will be getting a degree in social work. She has taken out a couple of loans and we just found out about that program. The way I read it is you have to make 120 on time payments and work for a government for ten years to be eligible for loan forgiveness. In other words, you have to make payments for ten years. We will have her loans payed off in about a year after she graduates, assuming she lands a job in her field of study.
The way the law was rewritten by Congress was designed to prevent defaults without repayment. Court decisions following the lead of Congress make it almost impossible to avoid repayment and most attorneys won’t even take a case against the government because of the precedents.
Obama bought out all the outstanding loans that were owed to Sallie Mae and the banks that participated in the program because they had a guarantee of repayment from the government.
However, the ‘progressives’ believe that students got a good education for a purpose and they shouldn’t be penalized by an onerous and strict repayment program.
So the next step is to forgive all the loans since they were made for a ‘good purpose’ and will benefit the country.
How did you do that consolidation to get a lower payment? My wife and I are still paying off her loan $300+/month for her Masters degree and we could use some relief.
It's tempting but don't take the bait...
The goob will compound the interest and you will find yourself owing even more.
No happening, Kemosabe.
The ChiComs are holding US Federal land as collateral.
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