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Posted on 07/19/2010 8:52:44 AM PDT by AccuracyAcademia
Default U Bethany Stotts, July 19, 2010
Student loan default rates are much higher than government data originally suggest, reports Kelly Field for the Chronicle of Higher Education on July 11. Unpublished data obtained by the education news outlet from the Department of Education show that one in five government education loans that have entered repayment since 1995 have gone into default, she reports.
How bad, exactly, is this for the former students? Borrowers who default on their student loans face significant personal and financial burdens, writes Field. They become ineligible for additional federal aid and may have their wages and tax refunds seized by the government.
Their negative credit records make it harder for them to obtain car loans, mortgages, and credit cards, and even apartments or jobs, she continues. When they can get loans, they pay higher interest rates.
Field reports that the percentage of borrowers defaulting on their loans varies by the type of institution attended.
While for-profits educate less than 10 percent of students, those colleges students received close to a quarter of Pell Grant and federal-student-loan dollars in 2008, according to the College Board, reports Field. And they accounted for 44 percent of defaults among borrowers who entered repayment in 2007, according to the Institute for College Access and Success, a nonprofit organization that advocates making higher education more affordable.
For-profits accounted for 16 percent of all the loans (other than consolidated loans) issued from 1995 to 2007, but 34 percent of the defaults, she later adds. ...
(Excerpt) Read more at academia.org ...
Wait a minute. THEY DEFAULTED AND GOT FREE MONEY!
The question is: "How bad is this for taxpayers left holding the bag?"
The answer is: "Worse than ever since the Government just took over all Student Loans in one of the several great Nationalizations of Industry under 0bama."
Interesting... people who default on student loans get their tax refunds yanked.
Read #3....You can’t get rid of them and taxpayers are not paying for them. The students are screwed not the taxpayers. Defaulted just means they are behind on the payments as the interest compounds.