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 ...
Not for all loans. Usually just from .gov. Private sector is sol.
We need to stop subsidizing liberal schools that provide their students a worthless education.
There needs to be a scorecard. Those that produce liberal idiots with crushing debt don’t get anymore money.
That would make sense. My daughter in med school has high balance loans. She will have to go through years of residency after graduation before she begins to pay her loans down. She will however, pay them back.
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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............
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Yep, another 60’s illegal/unconstitutional LBJ bastard-child. My post still stands.
Plenty of grad school degrees are worth the debt (eg: doctor, mba from a T20 program, lawyer, etc). Masters in Sociology for $100k? not so much.
No, they should just not be done by the government and they should be dischargeable again in bankruptcy.
Not allowing student loans to be discharged in BK is WHY we are at this problem. When you don’t allow them to be discharged, the lender (whether the USG or private lender) has little incentive to limit to WHOM or how how MUCH they lend. Before this was changed in the 80s, student loans weren’t even really a thing.
“Nice ‘dangling participle’ there! I take it that you didn’t teach English?”
I take it that you did not take linguistics. People use language to communicate. The “rules” vary by application, region, and time.
For example, a dangling participle happens when the noun it was meant to modify is omitted. But omitting words has been the standard since English was a language in print. Here is a passage from William Tyndale’s Bible from 1526:
In the beginnynge was the worde and the worde was with God: and the worde was God. The same was in the beginnynge with God. All thinges were made by it and with out it was made nothinge that made was. In it was lyfe and the lyfe was ye lyght of men and the lyght shyneth in the darcknes but the darcknes comprehended it not. There was a man sent from God whose name was Ihon. The same cam as a witnes to beare witnes of the lyght that all men through him myght beleve. He was not that lyght: but to beare witnes of the lyght. That was a true lyght which lyghteth all men that come into the worlde. He was in ye worlde and the worlde was made by him: and yet the worlde knewe him not. He cam amonge his awne and his receaved him not. But as meny as receaved him to them he gave power to be the sonnes of God in that they beleved on his name: which were borne not of bloude nor of the will of the flesshe nor yet of the will of man: but of God. And the worde was made flesshe and dwelt amonge vs and we sawe the glory of it as the glory of the only begotten sonne of ye father.
This is the first 14 verses of John 1. Notice that there are several places where words are omitted and the reader must infer them. For example: “came among his own and his [own] [did] not receive him.”
Formalities and strict rules for writing are primarily a way to systematize a way of doing things. They are useful for teaching children language and for more precise communication in settings where this is important.
But these always fail over time. You can not force people to speak and write a certain way. And this is one reason language changes over time, as you can see by the above “English” text.
Also, following strict rules of grammar and punctuation is something expected in a formal setting, like presenting a thesis or publishing a research paper. Not on a web forum.
If a dangling participle troubles you on a chat forum, one begs to question how you cope with modern text messaging. EMFBI.
Nope...History, International Relations, U.S. National Security and Terrorism. Anything else you want to grammar correct or will you refute any part of what I indicated?
Regards,
There is no degree that justifies $150 000+ of debt.
And it's not the degree that's lucrative, it's the person who gets the degree who has the requisite personal attributes that produces the lucre.
You’d never have any doctors, dentists or lawyers.
The problem is that people borrow too much money. I don’t know that I want the government protecting us from ourselves.
“There is no degree that justifies $150 000+ of debt.”
Orthopedic surgeons average about $400k+ a year.
Are they selling bonds on the student loans?
What percentage of USMGs are going to be orthopods or eye surgeons? 4%? 5%?
How much the wealthiest specialists can make working 80 hours a week in the current environment is not a rational guide to how much debt an average medical student should take on.
“Not allowing student loans to be discharged in BK is WHY we are at this problem. “
No it isn’t.
It’s because there is absolutely no assessment of the student’s ability to pay, as now almost ALL student loans are from the US taxpayer to the student.
That’s why defaulting students owe nearly $1 trillion. And rapidly growing.
https://studentaid.ed.gov/sa/repay-loans/understand/plans
The government is not an aggressive debt collector, unless you’re delinquent on taxes.
PRIVATE student loans are almost always repaid, as the bank will prevent you from acquiring any assets, and will even attach income to ensure repayment. Certainly if you’re in default on a private loan you’ll never buy a house or get a car loan.
“Worse, the cost of becoming a doctor has soared, with higher education expenses leaving the average newly minted physician with $166,750 in medical school debt,”
I agree. This isn't going to be quite as easy to climb down from as some folks imagine. No plan I can think of won't be unfair to somebody, so the question is, how to minimize that?
The people who financed their own educations or have paid off their loans by now are the ones who, very unfairly, stand to lose the least by restructuring this thing, since they're more or less financially stable by now and never mind how hard they had to work to get there. I'm one, it sucks, but what can you do?
The ones who stand to lose the most are the ones who haven't entered higher education yet and are likely to find (1) tuition and fees still at a high level, and (2) no loans available to cover them. For me it wasn't that hard to finance my own education (it wasn't easy, either) because tuition and fees hadn't experienced the bloat yet. Covering today's levels of those with a part-time job is just about impossible. They're high because they can be, and if we make it so that they can't be by dropping the money supply they'll still start out high until the institutions can manage to draw down administrative staff that won't, hopefully, be needed anymore. That process will be hastened by suddenly smaller entering classes, and that means that a whole lot of institutions are going to run in the red for the interim.
It's going to take a while to fix the system and in the meantime the oncoming students are going to feel like poor kids staring at a store window who will never get inside. That hardship is going to make my own challenges seem petty, and I'd like to avoid that if we can.
You are missing it even thiugh you just said it yourself. There is no assessment on ability to pay because it’s not dischargeable! It will follow you to your Social security withholding with interest and penalties.
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