Posted on 04/21/2012 7:00:52 AM PDT by SeekAndFind
Move over, mortgages. Get out of the way, Greece. Another economic doomsday scenario is emerging.
Student loan debt has reached about $870 billion, exceeding credit cards and auto loans, and balances are expected to continue climbing, the Federal Reserve Bank of New York said last month. In February, the National Association of Consumer Bankruptcy Attorneys referred to a "student loan 'debt bomb'" and wondered if it was shaping up to become "America's next mortgage-style economic crisis." Such a burden could crimp an already weak economy.
"Student debt poses a large and growing threat to the stability of our economy," Illinois Attorney General Lisa Madigan testified March 20 before a U.S. Senate judiciary subcommittee hearing in Washington on the looming student debt crisis.
"Just as the housing crisis has trapped millions of borrowers in mortgages that are underwater, student debt could very well prevent millions of Americans from fully participating in the economy or ever achieving financial security," Madigan said.
In January, Madigan's office sued for-profit Westwood College, claiming it misleads students enrolled in its criminal justice program, puts them deep in debt and awards a nearly worthless degree. She told the Senate last month that since filing the suit, 1,000 former and current Westwood students have come forward to complain about their experiences.
A spokesman for Westwood said Thursday that a motion to dismiss the case is pending.
The hearing was convened by Sen. Dick Durbin, D-Ill., who is pushing legislation, the Fairness for Struggling Students Act, which would allow students who borrowed from private lenders for their education to wipe out that debt in bankruptcy proceedings, just as credit card borrowers and many other unsecured debtors may do.
(Excerpt) Read more at articles.chicagotribune.com ...
First, they are college students and supposedly can read. Shouldn’t they read what they sign (or is that asking too much?)? Shouldn’t they educate them selves about interest? I guess everything is so dumbed down and expectations are such that they are know-nothings so should be forgiven for being ignorant.
Second, they are then college graduates. For Goodness sake, be creative. Work two jobs. Do what you have to do to pay your obligation. Work a crummy job. Move. Do something “beneath” your status.
Toughen up and survive with some integrity and grit. Life isn’t a vacation or an easy stroll down the lane. Did anyone think about working while in college? You are only in class about 15 hours per week. Let’s stop making excuses for slacking. This is America. Work hard. Meet your obligations. Is this now a country of wimps??????
This would be fine for loans issued AFTER the legislation becomes law, and is something I've also been advocating. Student loan issuers would simply stop issuing loans to students who are not likely to earn enough from their degree to pay off their loans. These students would be disproportionately minority, so look for the screaming to start.
I would also want the schools to issue at least part of the loan, so that if the student fails to pay off the loan, the school has to eat it.
One daughter is going into nursing. Local community college has a good program, tuition is about $8K/year. After two years you get your associates degree, and can get your RN license. Then another two years to get your BS in nursing, while working as one on the side. Hope to see her get her BSN with little or no debt.
If he can do it, maybe other states will try... Thanks for sharing.
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