Posted on 03/06/2012 12:41:05 PM PST by SeekAndFind
Some have called the nations soaring college debt load a ticking bomb -- a new bubble crisis threatening young adults, their families and the broader economy. Are those fears warranted?
A report Monday adds to the alarm bells. In it, the Federal Reserve Bank of New York says its likely that as many as one out of four borrowers are carrying a past-due student loan balance.
Thats a much higher rate of delinquency than previously thought. By the more conventional measure, the Fed report says, 5.4 million out of 37 million borrowers with student loan balances as of last summer had at least one past-due student loan account -- a 14.4% rate. The sum of those past-due balances comes to $85 billion, or about 10% of the total. The same 10% rate applies on average to other types of consumer delinquent debt, such as mortgages and credit cards.
But Fed researchers say those delinquency figures for student loans understate the magnitude of the problem. Thats because the calculations dont take into account that federally guaranteed loans, which make up the bulk of the student debt, typically don't require repayment while borrowers are still in school and also are deferred for six months upon graduation. If those who are temporarily exempt from making payments are excluded, the report shows, the number of borrowers with past-due balances jumps to 27% of the total. And the outstanding balances that are late rises to 21%. Both figures are about double the unadjusted rates.
The New York Fed report concludes that student loan debt is not just a concern for the young. Parents and the federal government shoulder a substantial part of the post-secondary education bill.
(Excerpt) Read more at latimes.com ...
Screw self help books and motivational speakers.....whenever I'm down, I'm going to get me a politician. They'll tell me how important I am and whatever else I want to hear; all "free" of course.
They can’t pay back their loans if they can’t find a decent job after they graduate.
a Student Loan Forgiveness scheme is absolutely in their bag of October Surprises
You have to admit it’s a great scam.
Offer massive cheap money to any student with a pulse
Allowing schools to charge huge tuitions
Schools pay liberal profs and staff big $$
Profs and staff contribute to Democrats
Just like the union dues cycle
The message is to use part of their loan payments to bolster Osama's campaign. He will reimburse them one way or another after November.
It is the same type of promise Hussein made to part time teenie boppers. He would rebate their payroll taxes. He did.
yitbos
Damn. How do I grab some free Gov’t money?
Food Stamps, mortgage forgiveness, student loan forgiveness.
Hell - the EPA just gave away $100K to some activist group in our area to take photos of potential polluters, whatever the hell that means.
Making the rounds of students telcom is that The Obammunist has nationalized student loans. He is in charge of all the loans.
yitbos
And it's free?
Thanks, Mr. Wizard!
Hopefully there credit scores will reflect their negligence.
Who defines “decent”?
A simple solution is to garnishee 5-10% of any wages until the loan is paid.
There are tons of students that get forbearance’s and deferments for no good reason. They don’t have to pay , but interest is still being added unless it’s a subsidized loan where the gov’t (we) are paying the interest. You can get a forbearance for up to two years, I think, for no reason. So a lot more people aren’t paying their loans and they’re just growing and costing us more money in the long run,
6 months is standard.
5.4 million divided by 27% = 20 million.
So there are 17 million borrowers still in school (or out less than 6 months or otherwise deferred)?
Maybe the good news is that many students do repay their loans fairly quickly? Surely there hasn’t been an explosion in the number of loans granted.
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