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Student Loan Debt: $1 Trillion and Counting
Forbes ^ | 03/24/2012 | Sheryl Nance-Nash

Posted on 03/24/2012 6:55:44 PM PDT by SeekAndFind

Whatever happened to the American dream of going to college, landing a great job and living happily ever after? College is supposed to be about getting off to a great start, but it’s a financial noose that threatens to kill our young and everybody else too. The U.S. has the dubious distinction of now having more than $1 trillion in outstanding student loan debt.

The crisis has the full attention of the Consumer Financial Protection Bureau which in a recent blog , presented its sobering findings.

“Unlike other consumer credit products, student debt keeps growing at a steady clip. Students borrowed $117 billion in just federal student loans last year. And students continue to borrow private student loans, which lack the income-based repayment and deferment options of federal student loans. If current trends continue, there will be consequences not just for young people, but for all of us,” wrote CFPB’s student loan ombudsman Rohit Chophra.

Worse still, he writes, according to data from the Department of Education, federal student loan debt isn’t growing just with new originations — with so many borrowers unable to keep up with interest payments, debt is growing even for many who have left school. Too much debt means too much risk for a generation of young people, many of whom are struggling in today’s economy.

What’s the impact? Excessive student debt slows a recovery still trying to find its sea legs. Study after study has shown that young people are delaying the traditional rite of passage of launching out on their own and starting families. With so much debt, on average about $26,000 for undergrads, and many unemployed or underemployed, they are running back home, instead of looking for their first apartment or home.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: cfpb; college; debt; studentloans; tuition

1 posted on 03/24/2012 6:55:50 PM PDT by SeekAndFind
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To: SeekAndFind

BOHICA.....here comes another bailout.


2 posted on 03/24/2012 6:58:02 PM PDT by dfwgator (Don't wake up in a roadside ditch. Get rid of Romney.)
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To: SeekAndFind

FROM THE WALL STREET JOURNAL:

http://online.wsj.com/article/SB10001424052702304450004577279662086752488.html

______________________

Here’s how New York Fed economists describe them: “Of the 37 million borrowers who have outstanding student loan balances as of third-quarter 2011, 14.4 percent, or about 5.4 million borrowers, have at least one past due student loan account.” That adds up to past-due balances of about $85 billion, or roughly 10% of total student loans, which is about the same past-due rate for other types of household debt such as mortgages, credit cards and auto loans.

Not bad, taxpayers might conclude, considering the government is handing out student loans regardless of credit history or ability to repay. But the researchers dug deeper.

“Does this mean that the prospects for student loan delinquencies are similar to those for the household debt in general, and thus no special attention is warranted?” asks the New York Fed. “Unfortunately, this is not the case—some special accounting used for student loans, not applicable to other types of consumer debt, makes it likely that the delinquency rates for student loans are understated.”

Are they ever. After correcting for this “special accounting,” says the Fed study, “We find that 27 percent of the borrowers have past due balances, while the adjusted proportion of outstanding student loan balances that is delinquent is 21 percent—much higher than the unadjusted rates of 14.4 percent and 10 percent, respectively.”


3 posted on 03/24/2012 6:58:18 PM PDT by SeekAndFind (question)
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To: SeekAndFind

THE CFPB puts out a blog that supports the Occupoopers’ position (student loan bailout). I’m shocked! /sarc


4 posted on 03/24/2012 7:02:58 PM PDT by ConjunctionJunction
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To: dfwgator

Didn’t 0bama promise to forgive some of the loans? You know, for votes?


5 posted on 03/24/2012 7:03:44 PM PDT by unkus (Silence Is Consent)
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To: unkus

There is a proposal to forgive loans that are ten years or older in Congress, but it hasn’t been voted on yet.


6 posted on 03/24/2012 7:10:19 PM PDT by Clintonfatigued (A chameleon belongs in a pet store, not the White House)
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To: SeekAndFind

When I went to college you either went on the GI bill, WW2 & Korea, or you worked to pay for it.

If you can’t pay for it don’t borrow the money!!!

Leave the law as is where you can’t wipe out the debt with bankruptcy!!


7 posted on 03/24/2012 7:13:14 PM PDT by dalereed
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To: SeekAndFind

Push easy money into housing loans and you get a real-estate bubble.
Push easy money into college loans and you get a college expense bubble.
Push easy money into healthcare and you get a medicare expense bubble.
The goverment can’t resist, and the voters who elect them will never learn. We must forever banish the federal government from the free market.


8 posted on 03/24/2012 7:13:36 PM PDT by omni-scientist
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To: omni-scientist

9 posted on 03/24/2012 7:15:13 PM PDT by SeekAndFind (question)
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To: SeekAndFind

Care to put that chart right up against the total compensation for public employees? I betcha that it’ll be just about the same, when including all employee compensation, including more than a month of paid vacation each year, gold plated health benefits, and a retirement program that would be the envy of any hard working self employed person.

More interesting would be to add in one for employees of non-profits. Pretty close to the same end result, but the rise is concentrated in the last decade.

It’s just all embezzlement of ‘free’ money.


10 posted on 03/24/2012 7:21:56 PM PDT by kingu (Everything starts with slashing the size and scope of the federal government.)
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To: SeekAndFind

Excellent chart. Bill Ayers and his ilk have gotten 400% plus pay raises to help destroy the country. Three generations of idiots with government given “rights” have demonstrated that a lot of people have lots of degrees but no education.


11 posted on 03/24/2012 7:22:53 PM PDT by RetiredTexasVet (There's a pill for just about everything ... except stupid!)
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To: dalereed

problem is that college tuition fees have outpaced inflation for a long time. These kids don’t have the voice and experience to tell us but they ARE drowning in this and our debt including SS and having to take care of us in our old age.

Add that 53 milliion of their peers have been killed off by their mothers and d-—head absentee

They won’t recognize their enemy and they don’t see a friend in the Republican Party. They write off Newt as an old geyser. He should align himself with them. He could. He’s had a lot of education.

This guy (you know who) is seeking a way to get votes and that’s what the discussion is about.

Just ‘cause we don’t like it doesn’t mean it won’t work.

1100 per year it cost me to get an excellent education at a state school. Used the GI B for a second valuable degree.

Newt, if you are reading this, take heed.

These kids are in serious trupble and they need help or they’ll get into despair.

But could we take a look at


12 posted on 03/24/2012 7:40:21 PM PDT by stanne
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To: stanne; SeekAndFind

d-—head absentee fathers/boys taking advantage of this sick situation=sick mis informed girls

But could we take a look at . . . No idea. The editing option is my friend Must remember.

Thanks for the chart, SeekAndFind.


13 posted on 03/24/2012 7:50:31 PM PDT by stanne
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To: SeekAndFind

There are several ironies in this proposed bail out for student loans:
* Most of those taking out student loans are middle class or upper class, since the poor got federal grants or scholarships. Now the poor or less educated get to bail out middle class college educated people.
* The government has been increasingly tying federal service to student loan forgiveness. Shall we see a broad “forgiveness” of this unbankruptable debt in return for virtual federal slavery?
* Student loan forgiveness means loans for education will dry up for future students.


14 posted on 03/24/2012 8:31:26 PM PDT by tbw2
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To: SeekAndFind

I had an athletic scholarship, a campus job and I still had to borrow money. I will say I paid it all back tho. Probably puts me in a minority.


15 posted on 03/24/2012 8:42:00 PM PDT by yarddog
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To: tbw2
Student loan forgiveness means loans for education will dry up for future students.

Since the government nationalized the student loan industry last year, this isn't going to happen. It's just another government program that will continue to be funded regardless of whether it makes sense to do so or not.

On the other hand, the schools will jack up their prices to ensure that every student that comes through their doors will end up with a student loan that equals the maximum amount the student is allowed to borrow. As you have pointed out, since it's a government loan, the student can't get out from under it unless the student bows to the will of the federal government and takes certain jobs, gets certified as 100% disabled (by the same government), or dies. These loans are NOT bankrupt-able.

In other words, college educated individuals (virtually all of whom are in the middle class) are now rooked into 20 years or more of paying an undocumented tax ... the interest on the loan. Or, if they do default on the loan, the government gets to keep their income tax refunds as well an any other over-payments they may make to the federal coffers.

I hadn't thought of this until the other day because we generally concentrate on the 20% or so who default on the loan. But the other 80% are stuck paying interest (albeit a low interest rate) on a loan to the government for many, many years. How much is the government profiting off this?

In any other industry, I would think that there would be a RICO investigation warranted.

16 posted on 03/24/2012 8:53:02 PM PDT by Stegall Tx (Living off your tax dollars can be kinda fun, but not terribly profitable.)
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To: tbw2

The loans are overwhelmingly just income transfers to the left. Outside of math, science, and engineering, the typical college degree today has little or no real value.


17 posted on 03/24/2012 9:22:06 PM PDT by achilles2000 ("I'll agree to save the whales as long as we can deport the liberals")
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To: yarddog

We have two kids in school. The boy tells me everybody max out their student loans and most believe they won’t ever pay it back. He wanted to apply and I wouldn’t let him. We pay a monthly bill to tuition management, averages $1400/month/ kid; so we are paying right under 3 gran/month to keep the kids in school. At least I have a clear conscious about the kid’s future and know we ain’t takers. Driving old vehicles, doing without doesn’t bother none; but I’d sure hate to feel like I somehow helped bankrupt student loans. Anybody can afford the kid’s college, just priorities.


18 posted on 03/24/2012 11:56:30 PM PDT by Eska
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To: SeekAndFind

Student loans were designed for only one purpose...and that was not to help students to go to college who couldn’t afford it.

Listen carefully...it was to guarantee unlimited income for the colleges...period! Nothing more.


19 posted on 03/25/2012 5:29:15 AM PDT by DH (Once the tainted finger of government touches anything the rot begins)
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To: SeekAndFind

IMHO.....the student loan thingy is right up there with the mortgage fraud mess.....and while nobody forced anybody to sign any papers, the product being sold and the potential returns were conveniently obfuscated.

The student loan thingy is morally worse as the government has colluded to prevent discharge In bankruptcy, thereby creating an indentured servant class that has not been seen in this country since the 17th and 18th centuries.


20 posted on 03/25/2012 5:46:35 AM PDT by mo (If you understand, no explanation is needed. If you don't understand, no explanation is possible.)
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To: achilles2000

RE: Outside of math, science, and engineering, the typical college degree today has little or no real value.

Is Business and Finance useless too?


21 posted on 03/25/2012 6:31:45 AM PDT by SeekAndFind (question)
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To: SeekAndFind
Is Business and Finance useless too?

I'll let Rodney Dangerfield answer that

Back To School

22 posted on 03/25/2012 6:34:40 AM PDT by dfwgator (Don't wake up in a roadside ditch. Get rid of Romney.)
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To: SeekAndFind

Pay attention to modifiers, e.g. “typical.” You can occasionally find liberal arts programs that are excellent, but they are relatively rare. Finance degrees are generally a good bet. Business courses are being watered down. Still, a business degree is, in general, better than “studies”, education, or most liberal arts degrees. Remember - it isn’t 20 years ago. The fields that I mentioned are the ones that are least affected by the gradual deterioration of standards that has occurred sonce the end of the 60s.


23 posted on 03/25/2012 7:34:19 AM PDT by achilles2000 ("I'll agree to save the whales as long as we can deport the liberals")
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To: SeekAndFind

Is Business and Finance useless too?


Business and finance professors normally have absolutely no actual “hands on” experience in the real business world. They just “parrot” what they have been taught by others with no experience either.

Want to learn business and finance? Get a good book on the subject and read it. No “hands on” experience is required to understand it. Engineering and the other disciplines on the other hand require “hands on” experience taught in the classroom and lab.

Normally a BA degree is only a ticket that allows you to join the “college club” at your employer’s business and nothing more.

Believe me. I’ve owned a manufacturing business since the 70’s and have many “graduates” had a problem finding the restroom with all of the great teachings they walked through the door with. Worse yet, instead of starting at the bottom and learning exactly what the business is, does, and produces, they wanted to start in the middle and earn middle of the business salary too...even though they would have to be trained to do the job they were placed in.

In businesses “other than pencil and paper pushing” a prospective entry level manager or supervisor MUST actually be on the floor with the workers and spend at least 6 months working at those jobs before even being considered for management. Otherwise, they have absolutely no idea of the business operation below their station.

How many of you have experienced something like this example:

Your job is to assemble widgets that utilize 50 screws to hold it together. You have to build 100 of these widgets for shipment to your most important customer in 2 days. You run out of screws and send procurement a request to the purchasing agent (PA) for 5,000 screws. Next thing you know the PA wants to know why you want the screws and to justify your request. Worse yet, the PA does one of two really stupid things: The PA asks you if you could use only 25 because they come in packs of 25. The other thing is that the PA shops around for the best deal (remember the 2 day turnaround?) and orders them; however they were bought on the cheap and will be shipped from China next month.

Well, I wonder what the cost of a good high volume customer would amount to.

In the business of business you must first graduate from the school of hard knocks and then listen to those who live in a bubble away from reality so you will know what to retain and what to call bullshit.


24 posted on 03/25/2012 8:26:37 AM PDT by DH (Once the tainted finger of government touches anything the rot begins)
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To: dalereed
"If you can’t pay for it don’t borrow the money!!!"

Borrowed the money for an education in a 'for profit' fake-ass 'college'.

School closed down before I could finish my degree in 'electronics'. They were teaching old component level crap (soldering in resistors and the like) while multi-level boards and surface mount technology was the norm.

I was doing this to expand my horizons and improve my 'marketability'. So much for that sh*t. I was an app programmer at the time and wanted to branch out into networking and such.

To top that off my software gigs got effin 'outsourced' to some H1-B immigrant F**K who doesn't give a rats-ass bout the the country I spent 11 years of my life defending against enemies foreign and domestic.

It's been 12 years (when I made good money I made good on the debt) since then and they have tacked more than double the original loan amount in interest and 'fees' on me.

I'm the farthest thing from an OWS puke, but I ain't paying a dime back on that.

You can say I 'should have made better choices' but that school was the only 'opportunity' at the time. Hindsight and all that...

25 posted on 03/25/2012 3:50:26 PM PDT by Looking4Truth (Peace! Through Superior Firepower...)
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To: SeekAndFind

Note also that the entire debt is forgiven if they are employed in the government or a secular non-profit for 10 years, and make all their payments, thus ensuring the gov. will be full of college educated liberals, as about 90% of colleges are.


26 posted on 03/25/2012 4:09:44 PM PDT by daniel1212 (Come to the Lord Jesus as a damned+morally destitute sinner,+trust Him to forgive+save you,+live....)
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