Posted on 03/12/2012 8:19:35 PM PDT by SeekAndFind
Bankruptcy lawyers have a frightening message for America: They’re seeing the telltale signs of a student loan debt bubble that is placing increased financial pressure on families struggling with their children’s mounting debt. According to a recent survey by the National Association of Consumer Bankruptcy Attorneys, more than 80 percent of bankruptcy lawyers have seen a substantial increase in the number of clients seeking relief from student loans in recent years.
In most cases, those clients could not meet the federal hardship standards that are necessary to discharge a student loan through bankruptcy proceedings. Instead, many of these parents or guardians who co-signed the student loans face the prospect of losing their life savings, cars or homes to collection agencies for aggressive private lenders.
illiam Brewer, head of NACBA, has said, “This could very well be the next debt bomb for the U.S. economy” — something akin to the housing mortgage loan crisis that triggered the U.S. financial crisis.
“Obviously, in the short term, student loan defaults are not going to have the same ripple effect through the economy that mortgage defaults did,” Brewer said. “My concern is that the long-term effect may be even graver, because people who need student loans to try to get a higher education or retraining” will be unwilling to run the risk of taking out a student loan.
Moody’s Analytics has evaluated the chances of a student loan crisis.
“Despite its rapid growth even as credit quality weakened during and after the recession, student lending is not likely to turn into the next subprime crisis,” it said in a January report. The student loan market is one-tenth the size of the residential mortgage market. And more than 90 percent of student loans are federally guaranteed.
(Excerpt) Read more at washingtonpost.com ...
Still no demand from the commie liberals for “comprehensive tuition reform” though, huh?
Time for a gubmint takeover of all higher ed that’s “at risk” of collapse, pay for golden parachutes and fund those pensions, and while we’re at it, take a good hard look at whether AGW-deniers really should have tenure. Thanks SeekAndFind.
“The Student Loan Debt Bubble - Just like we saw with the housing bubble, the student loan debt bubble just continues to grow and grow and grow. At some point the nearly 1 trillion dollar bubble is going to burst. What effect will it have on our financial system when that finally happens?”
Time for student loan applicants to submit a business plan for themselves before undertaking higher education on borrowed money. If they can’t show a need for them to pursue a particular degree, the loan should be denied.
We have enough art history, literature and womens studies majors who are flipping burgers.
IMHO, too many people went to “college” who had no business going to “college”. A lot of money went towards Bovine Scatology classes that were of absolutely no use in the real world.
Well sure, if you consider adults with a college degree to be "children" then the above statement makes perfect sense.
Lots of my daughter’s college friends took 2 & 3 vacations a year with loans from ‘Aunt Sallie’.....she couldn’t go cause we didn’t have the extra income to send her to spring & winter breaks to Vegas
BOHICA!
Why did the federal government unconstitutionally takeover student loans for higher education?
To build another plank in their platform of entitlement paid for by the producers (ironically, mostly by poor stupid lottery players).
Atlas needs to hurry up and shrug. The Bengay is probably costing him a fortune. Oh wait, now Atlas is helping the takers’ agenda to make their profit.
If a student defaults on his/her loan, then that's about all the impact it has. Nobody ever leveraged anything out of that loan, except maybe parents who co-signed and who may now be on the hook for the cost of a worthless "education."
You reminded me of a few verses I was reading last night. It's as if Lucifer ("light-bearer") should be read as "hope-bearer".
Isaiah 14.
12 How art thou fallen from heaven, O Lucifer, son of the morning (dawn)*! how art thou cut down to the ground, which didst weaken the nations!
13 For thou hast said in thine heart, I will ascend into heaven, I will exalt my throne above the stars of God: I will sit also upon the mount of the congregation, in the sides of the north:
14 I will ascend above the heights of the clouds; I will be like the most High.
15 Yet thou shalt be brought down to hell, to the sides of the pit.
"We were looking at the “o” of his name and had the idea of a rising sun and a new day,” according to Sender. “The sun rising over the horizon evoked a new sense of hope."
https://en.wikipedia.org/wiki/Obama_logo
This trend cannot continue because our faltering economy cannot support this bloat. Entrepreneurs are coming up with more efficient and cheaper ways for people to get marketable skills. This means that leftist professors who think that they deserve huge salaries for brainwashing young minds will eventually find the demand for their services severely diminished. Hopefully with people seeking to gain marketable skills for a reasonable expense instead of worthless degrees in leftist studies... the pendulum can begin to swing back to some type of sanity. But it is too early to know what will happen, but I am hopeful.
And more than 90 percent of student loans are federally guaranteed.
And the federal government has the money to replay these loans???
It’s just as bankrupt as the people who are going to bail on these loans.
And more than 90 percent of student loans are federally guaranteed.
And the federal government has the money to repay these loans???
It’s just as bankrupt as the people who are going to bail on these loans.
Cry me a river.
It's an election year, and the Dems always rely on the young voters. You can bet that later this year Obama will position himself as wanting to write off everyone's college loans... but the mean, evil Republicans are in the way of that goal.
Time for overpaid underworked professor salary reform.
It’s a Crisis again.
Who was it that said:
“Never Let A Crisis Go To Waste”
And
Who did he work for
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