Posted on 09/21/2011 3:14:57 PM PDT by DeaconBenjamin
Student loan defaults are rising fast, according to figures released this week by the U.S. Department of Education. While much of the press coverage focused on defaults by students attending for-profit schools, defaults at state colleges and universities went up, too.
The bad job market is a big factor: Unemployment in 2010 was 10.1 percent for people between the age of 25 to 34, and those numbers are even higher when you remove people above the age of 30. At the same time, state budget cuts to higher education have led to big tuition hikes at many public colleges.
California students graduated from public colleges with the least debt in the country in 2009, but tuition jumped 18 percent last year for in-state students in California and double-digit increases are projected for the next several years, as well.
This is the reason there was a govt takeover of the student loan system in the health care bill. Once these students are on the hook to the feds they will tell them where they have to work and for how much.
Non-dischargeable debts always suck to endure. (No bankruptcy for you wage slave with a piece of lambskin)
My daughter is in the Central State university ROTC program (although she attends another school nearby). [Central State is # 1 default in nation].
This more bad news for the housing market. More and more young people with bad credit who won’t be buying houses for a long long time.
bookmark
Do the ‘for profit’ groups include ‘learn trucking’ etc?
My wife and I pay around $500 a month for student loans. Most of them are hers, as I had a scholarship.
The whole system is nuts. Kids graduating today in our fields end up with $1000 a month payments, and little hope of a job that can cover that. The education is going to pop, and pop hard.
Aware that one of the “Top 10” in defaults was a historically black college, I thought I’d check on the others. I was amazed to find that at least half of the “Top 10” institutions were in a list of historically black and predominantly black colleges.
When you think about the relatively small number of institutions that fall into this category (historically/predominantly black) and then you see that half of the “Top 10” are in this category, this is astonishing. Why???? This is a scandal within a catastrophe.
Having been an educational counselor (a lifetime ago), I wonder how many of all those defaulting on loans may be caught in a double bind — not only do they owe a lot of money, they failed to get a college degree that MIGHT have helped them pay off the costs of that degree. Then I wonder if that situation might be even more of a problem at the historically/predominantly black institutions.
Pray for these young people — a terrible economy, few jobs to begin with, debt impossible to get out of and with compounding interest, no degree. Lots of these young people were likely the first ones in their families ever to attempt post secondary education. Imagine the message this situation sends to their friends and family members.
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