Posted on 02/20/2018 7:02:15 AM PST by reaganaut1
During the housing boom of the 2000s, jumbo mortgages with very large balances became a flashpoint for a brewing crisis. Now, researchers are zeroing in on a related crack but in the student debt market: very large student loans with balances exceeding $50,000.
A study released Friday by the Brookings Institution finds that most borrowers who left school owing at least $50,000 in student loans in 2010 had failed to pay down any of their debt four years later. Instead, their balances had on average risen by 5% as interest accrued on their debt.
As of 2014 there were about 5 million borrowers with such large loan balances, out of 40 million Americans total with student debt. Large-balance borrowers represented 17% of student borrowers leaving college or grad school in 2014, up from 2% of all borrowers in 1990 after adjusting for inflation. Large-balance borrowers now owe 58% of the nation’s $1.4 trillion in outstanding student debt.
“This is comparable to mortgage lending, where a subset of high-income borrowers hold the majority of outstanding balances,” write Adam Looney of Brookings and Constantine Yannelis of New York University.
“A relatively small share of borrowers accounts for the majority of outstanding student-loan dollars, so the outcomes of this small group of individuals has outsized implications for the loan system and for taxpayers,” the authors say.
The problem is particularly acute among borrowers from graduate schools, who don’t face the kinds of federal loan limits faced by undergraduate students. Half of today’s big balance borrowers attended graduate school. The other half went to college only or are parents who helped pay for their children’s education.
(Excerpt) Read more at wsj.com ...
Schools should be required to endorse the loans made to their students. If the schools provide meaningless degrees and the student cannot pay, let the school pay back the loan.
1. Never, ever allow these loans to be discharged in bankruptcy.
2. Never, ever use any taxpayer money to forgive them.
3. Eliminate all further government sponsorship or involvement in any form of student loan.
These steps are necessary to crush the Intelligentsia-Media complex. The principal enemies of the United States.
USC tuition growth through the years, until 2016:
https://dailytrojan.com/2016/03/06/usc-tuition-years/
Current tuition (2017-18 academic year) is not shown. It’s $53,448.
The Government making these jumbo loans to kids who have no idea what they are doing is akin to child abuse - call it abuse of the youth. Those who make the loan make it look like easy money and it begins the culture of welfare - the government provides everything.
This article should be titled, “The Rise of the Brown Shirts.” This indebted generation will rise to the beckon call of any tyrant promising them jobs and college loan forgiveness. They will be the arm of the Deep/Global State...
Today that same school is 10K a year plus books. That was 50 years ago but at the same time, people graduating from that school now are not making 100K to start either which would equate to a perfect ratio of cost to result. The difference, there was no public funding for college. My night job and my parents came up with the coin and I lived at home.
” (USC) Current tuition (2017-18 academic year) is not shown. It’s $53,448.”
IMO - that is just plain criminal.
While I commend and am proud of my daughter for obtaining an family nurse practitioner masters degree, she does not realize she has destroyed her family’s finances through student loan debt. Her income differential will never be enough to match her loan payment.
I never saw the wisdom in getting loans for an undergraduate degree. It limits ones potential for a graduate degree or to do a thorough job search when one graduates.
Look at the housing that college snowflakes now have as they borrow their supposed future earnings (with exponentially growing interest costs on top) and make huge sacrifices on their futures for the sake of living in luxury now.
http://fortune.com/2015/09/07/college-dorm-rooms-luxury/
50K for a degree in interpretive dance and women’s studies sounds like a bargain.
You owe me a keyboard, Dancer!!! lololol
You owe me a keyboard, Dancer!!! lololol
My 15YO son is on the fast track to a couple of years at a community college. I'm nudging him to a job at UPS when he turns 18. Their tuition reimbursement benefit is over $5K a year.
I just started working there to get out of the house and make a few bucks. I work with quite a few college age students, and a lot of older folks like myself who need the benefits UPS provides. I'm going to use that tuition reimbursement to get a history degree, and teach in the local school district in a couple of years.
I see my current job as being paid to work out 4-5 hours a day, 5 times a week. So far, so good, dropped 10 pounds.
You should cover it with Saran wrap to prevent that. LOL
4 years ago I went back to school and got my MBA. I was broke because of fallout from 2008, and unemployed. I paid for the entire thing with student loans, and yesterday I made my final payment. The problem, more than anything else, is that we allow loans far in excess of actual earning potential for the degree being sought. Limit total loans across a degree program (4 years for Bachelors, 2 for Masters, 4 for Doctorate) and specific to that field of study to no more than the average first year earnings of someone with that degree, and a lot of the problem goes away. In other words, if the Average Comp Sci grad hired to do Comp Sci stuff earns 60 grand year 1 nationwide, and the average Philosophy grad hired to do Philosophy stuff earns 20 grand a year nationwide, then the Comp Sci grad can borrow UP TO 15 grand a year (60/4) whereas the Philosophy grad could have only borrowed 4 grand a year (20/4). If first year Doctors only make $60 grand, then med school could only cost $15 grand. Once you tie loan to the collateral you are creating (just like with any other loan), you start to get fiscal sanity. The second provision would be that if a student cannot get a job in their field of study within 5 years earning that first year average, there should be a clawback on the money charged for tuition. This would then hold the universities accountable for only producing degree programs that actually create employable people.
As of 2014 there were about 5 million borrowers with such large loan balances, out of 40 million Americans total with student debt. Large-balance borrowers represented 17% of student borrowers leaving college or grad school in 2014, up from 2% of all borrowers in 1990 after adjusting for inflation. Large-balance borrowers now owe 58% of the nation’s $1.4 trillion in outstanding student debt.
Student loans are a political football and everyone thinks they know the situation but few do. To be informed one must read more than the headlines.
They are also a moving target, with rules constantly changing but we and the media have a static image in our mind.
1) If you do research , the loans can be forgiven in bankruptcy.
2) There are 4 repayment plans. One plan is 15% of discretionally funds, and do some research on how that is figured.
3) It appears the debt is forgiven after 25-30 years of min payments. 10 years if you work in the public sector!!!!!!!
YET IT IS A MAJOR POLITICAL FOOTBALL THAT DOES NOT GO AWAY...............
Actually Wikipedia has some good information regarding student loan. But if you do a google search or bing search the sites are very informational and biased.
https://en.wikipedia.org/wiki/Student_loan
>
The obvious solution would be to cap borrowing through federal student loans at $50K or less and to abolish loans for graduate school
>
No, the obvious solution is to get govt out of the ‘education biz’ ENTIRELY. No more taxpayer $$$ to schools, colleges or for ‘loaning’ to attend.
Taxes should be paying for SERVICES. It’s not for\up-to govt to pick winners-losers via forced ‘charity’; to prop-up failing institutions, etc..
Someone wants to spend $50k+ to be a master basket-weaver, have at it. Just don’t expect the banks/loaner to be charged-off.
>
Perhaps, but the real solution to making colleges and universities ‘affordable’ is ceasing with the practice that everyone should have a college degree and then placing stricter requirements on government and private college funds, etc. Having taught at a university for nearly a decade, whether a college is for profit or non-profit, everything revolves around the $$$$! Research how many actual students are paying verses those receiving Staffords, etc. End this sh** and colleges and universities will inherently have to reduce prices to compete for students and real $$$.
>
I’m sorry, but why are the (R)N(C) ‘solutions’ MORE of what shouldn’t be??
Govt shouldn’t be in the ‘charity’ biz. Govt isn’t CHARITY, taxes are to pay for services for ALL.
Public XYZ wants to back, or donate....Go right ahead. Govt has NO (moral) authority to take from one to give to another for *any* reason.
They can’t even follow the dictates of the current Constitution (Fed & State), so why even expect their usurped powers to be any better/nobler?
Govt shouldn’t be in the ‘charity’ biz. Govt isn’t CHARITY, taxes are to pay for services for ALL.
NDSL in the 60’s National Defense Student Loans
then
NDSL National Direct Student Loans in the 70’s
then
administered by banks to get the govt out in the 80’s/90’s
then
Obama made them DIRECT student loans again so he could politicize it............
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.