Posted on 05/22/2021 10:50:18 AM PDT by SeekAndFind
As President Joe Biden considers forgiving $10,000 in student debt per borrower and ending tuition for many students at public colleges, it is worth noting that college graduates already have not paid $435 billion back to the federal government.
That’s right, of the government’s $1.4 trillion student loan portfolio, almost one-third is unpaid.
That $435 billion is comparable to the $535 billion that private lenders lost on subprime mortgages during the 2008 financial crisis.
The figure comes from FI Consulting, hired by the Department of Education, and whose work was checked by accounting firm Deloitte, and is a total of losses over the life of the loans in the federal government’s portfolio.
People in income-based repayment programs pay the loans based on how much they earn, and the government forgives loans that haven’t been paid back after 10, 20 or 25 years.
The findings estimated that on average, borrowers in income-driven repayment plans will repay 51 percent of their loans, while those in other repayment plans will repay 80 percent.
As the debate over implementing free college tuition and canceling student debt continues, policy experts, journalists and the public should keep this $435 billion figure in mind.
$435 billion to create a generation of Marxists
Has anyone wondered why the government has outlawed private college loans or granting bankruptcy relief on those loans? Congress made a serious mistake when they wrote a law declaring that companies must have sufficient money in their retirement funds to pay those retirees even if the company went out of business. Companies like Studebaker went out of business specifically because they didn’t want to pay out retirements from a company that wasn’t profitable even without that unfunded liability. So, formerly secret minutes of the meeting where they decided this let us know how companies actually viewed their retirement programs. When Congress made a law to protect workers, they forgot to exempt the federal government. (Most laws affecting companies do not apply to the federal government.)
Congress had to create an income stream to pay for their gold plated retirement benefits. At the time college loans had an astonishing repayment rate. Probably because people who took out those loans studied subjects that would guarantee income. Congress decided that only the government would be in the college loan business. To ensure that judges would not forgive those loans they outlawed that. Buy too much car, or house, the debt can be forgiven. But get a degree in gender studies and you’ll be paying for it forever.
Government can’t forgive college loans for the same reason they created the business in the first place. They’d have to raise taxes to pay for benefits to people who are already overpaid. And, those are benefits that no private employee enjoys today. You would be able to smell the tar and feathers miles away from the capital.
I’ve said it before and I’ll say it again... if a graduate can’t afford to pay back the loan, the school should issue a refund. The taxpayers shouldn’t carry the burden.
Send that expanded IRS and collect all sums due.
If the graduate won’t pay back the loan, maybe the graduate should pay back the loan.
I don’t think it is a matter of can’t. They would just rather spend their money on other things.
(1) Get the government out of the student load business. (2) Make the academic institutions lend the money directly. It costs them nothing, since it only represents delayed payment for services. (3) Prohibit academic institutions from selling the loans, unless the institution is in bankruptcy proceedings.
This will force academia to price their products according to the value it delivers. They will be unlikely to lend huge sums to students pursuing courses of study that offer no future.
Colleges are overpriced. Obama’s education czar was NAMBLA. Yes he made a lot boys gay. SICK.
—”Buy too much car, or house, the debt can be forgiven. But get a degree in gender studies and you’ll be paying for it forever.”
How many of the loans were only partially or never used for tuition or books?
New pick-up! Springbreak in Mexico!Plastic surgery...
Buried deep are people that know how much went to the school?
Guessing it is not a large component overall but suspect it is a fair chunk of the unpaid.
When am I gonna get any relief with my house payment?
No one is free from a DEBT. You signed the loan. Pay it or sell.
Speaks well of our colleges and universities and the students they produce. The colleges and universities should pay off the debt.
“Guessing it is not a large component overall but suspect it is a fair chunk of the unpaid.”
I was talking to a kid working in my gym. He was going to school for pharmacy. (Which I think is a another field being replaced by machines and online drug support from India.) He was jealous of his many friends who used the loans for cars, vacations, expenses to move out of the house and...drugs. I pointed out the downsides of doing that and his take was all those loans would be forgiven at some point, so why shouldn’t he do it too? Turns out his dad was keeping a close eye on things, something he sounded like he resented.
This is the way it always should have been. The schools should have been underwriting their student loans all along. This would have caused them to be more responsible with who gets their loans and tuition would not have risen 10x over the inflation rate.
This has been in the planning stages since 2007.
It was common knowledge among Millennials that if you worked for a non-profit, specifically a left wing non-profit, your student loans were eventually be “forgiven”
And all money has been used to finance the Marxist university system and the Marxist pony-tailed professor class.
Owe $38000 from a loan I took out while AD Army (1983-1987) for a $1000 National Radio Institute Correspondence Course.
No mail, nothing on my credit report for 38 years. Until last year. I’m now paying them $5 a month.
College is a deceptive minefield that borders on a scam. Only around 25% of students get a job in their field of study. Most can make about the same amount by getting a certificate or an associates degree.
College is a fraud for most and unreachable for the rest.
Agreed. Put the colleges on the hook if good faith efforts to pay off a student loan by a graduate fail after 10 years.
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