Free Republic

On April 15 Tax Day, Americans paid about the same amount of income tax as total student loans outstanding. The St. Louis Federal Reserve on the same day published a report titled ‘Student Loan Delinquency: A Big Problem Getting Worse?' The Fed has determined that of the $1.3 trillion in non-bankruptcy-dischargeable student loans, the delinquency rate for students in repayment is over 27 percent. With tuition at the University of California and other top schools growing faster than inflation, student loan defaults are skyrocketing. Prior published student loan reports have stated that the “30+ days delinquency rate for all student...

Some of the world's biggest banks, including JP Morgan, Bank of America and US Bancorp, are withdrawing from the student loan market. That's according to a series of reports over the past couple years.It couldn't come at a worse time.That is because it coincides with a rise in students who want student loans.And, the amount of money those students want to borrow is also going up because the price of of a college education keeps rising.This chart tells the story: Federal Reserve Bank of New York -- Staff Reports April 2014 NY Federal Reserve report shows borrowers, and their average...

Economists fear we’re racing towards another trillion dollar bubble of student loan debt. But there is a simple way to stop the madness now, before we blow any more taxpayer dollars — or our kids pay an even bigger price. SNIP SNIP A simple solution Admittedly student loans are riskier than most since there is no tangible asset to collateralize (although there certainly is a non-tangible asset — the student’s education). However, all educations are not created equal and should be “appraised” by lenders as part of a student loan determination. College fees and student loan debt have a perverse...

A few years ago, the country became aware of a “bubble” building in higher education, as it had in housing. Excessive demand – based largely on easy credit, government subsidies and the overselling of a college education – caused academia to expand unsustainably. Then came the economic downturn. With underemployed graduates and dropouts increasingly unable to repay loans, state legislatures cutting appropriations, and innovative competition making inroads, the bubble appeared ready to burst, or at least deflate. That could mean – so the theory goes – devastation for traditional academia: declining enrollments, with some colleges forced to close, perhaps; a...

For a number of years now, a number of critics of the American system of higher education have rightly insisted that there is a "bubble" in the system, with more and more students running up loans in amounts they will find difficult to pay back. This bubble has been fueled by the federal government's lavish subsidization of the student loan program (which was nationalized four years ago), in a way similar to how the housing bubble was fueled by government agencies pushing subprime mortgages. This extensive government largess has produced a number of unintended -- though not necessarily unforeseeable --...