Posted on 11/19/2015 3:20:45 PM PST by markomalley
Total U.S. student loan debt eclipsed the $1.2 trillion mark in the third quarter of 2015, the Federal Reserve Bank of New York reported Thursday.
Of that total, 11.6 percent was more than 90 days past due, an uptick from earlier in the year. Student debt delinquency is now worse than mortgage delinquency was during the worst period of the housing crisis.
Other statistics from the report, taken from a set of Equifax credit data, indicated that the country is recovering from many of its debt problems, student loans aside.
In particular, foreclosures hit a 17-year low. Home loan balances grew by a healthy $144 billion in the quarter, and mortgage delinquencies continued to fall. Overall, delinquency on all kinds of debt has continued to fall steadily throughout 2015.
Nevertheless, the student loan picture has not improved, and has even gotten worse, even as unemployment has ebbed.
That may be because the large wave of students who tried to wait out the recession by going to college, and took out loans to do so, is still just now starting out in the workforce and is trying to keep up with repayment. Many of those nontraditional students went to low-quality schools that did a bad job graduating students and preparing them for the workforce.
Student borrowers who complete college very rarely have trouble paying off debt, even with the recent acceleration in the growth of college costs.
But during the financial crisis, enrollment spiked and completion rates fell. The National Student Clearinghouse reported this month that the number of people entering school in the teeth of the recession in 2009 grew 8 percent to 2.9 million, reflecting a large increase in older students. Six years later, however, just 53 percent had graduated, a marked decrease from earlier years.
Loan counselors have noted that student borrowers often don't prioritize paying off student loan debt relative to other payments, such as auto loans. Student debt is very difficult to have removed through bankruptcy, meaning that the backlog of student loans in default are not likely to be written down the way bad home loans were over the course of the recovery.
This is easier to resolve than people think.
Step 1: allow students to declare bankruptcy on their loans after a period of time if they don’t have employment capable of repaying those loans.
Step 2: claw the money back from the colleges and universities who used those students as conduits for loan money without educating them well enough to obtain loan-paying jobs.
Stick it to the overwhelmingly-liberal educational-industrial complex. They deserve it.
Another scary thing rarely mentioned is the existence of SLABS (student loan asset-backed securities), which risk a replay of the mortgage securitization mess of the previous decade. Those instruments really never should have been permitted, but, it’s too late now.
We need more free stuff!
All according to plan.
I don’t owe a thing.
Yep ... and you know who’s going to get stuck with paying the trillion-dollar tab ... no matter which party is in power!
Cloward piven, overwhelm the system into collapse
The real number is at least twice that. Don’t ask me how I know but I do:)
Pay off your f***ing debt by picking fruit for the rest of your worthless lives, or pimp yourselves out on some sugar daddy website, because I absolutely refuse to pay for your lifestyle when as a young man I beat my brains out, pounding railroad spikes by hand on the track gang, and shovelling coal into a steam locomotive's firebox all day in the 103° August heat... just so I could put MYSELF through engineering school.
</rant>
If only we can get the government to supply 1.2 trillion. Then student loan debt could get to a more manageable 2.4 trillion
And all Hillary has to do is utter the word “forgiveness” to ensure her electoral victory and a massive new wave of government employees.
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