Posted on 10/09/2019 5:12:25 AM PDT by karpov
...
Student loans neared $1.5 trillion in the second quarter of 2019, a more than fivefold increase since the beginning of 2003. The rapid growth was fueled by increases in both the number of borrowers—there are approximately 43 million borrowers in 2019, compared with only 19 million in 2003—as well as a near tripling of the average balance per borrower, a rise to $33,500 in 2019, up from $13,300 in 2003.
Although these factors explain the rapid growth of aggregate student debt, there remains a large number of borrowers with smaller balances. The distribution of borrowers by balance reflects this; the median balance among borrowers is just under $18,000. About 33 percent of borrowers have balances below $10,000, and 20 percent of borrowers has a balance of more than $50,000. Only a small percentage—only 7 percent or about 2.9 million borrowers—has a balance over $100,000.
Repayment on student loans has been slow, with high delinquency and default rates. Overall, 15 percent of borrowers in the second quarter of 2019 were ninety or more days past due or in default on a student loan. That share reflects an improvement from 2013 when it peaked at more than 17 percent. In addition to delinquency, other factors contribute to slow repayment patterns, such as more accommodating repayment plans, forbearance, and deferment. Only about 36 percent of borrowers who were still current on their loan in the second quarter of 2019 had reduced their balance over the past twelve months.
Slow repayment has long-lasting consequences: ten years after leaving school, 2005 graduates had repaid less than 40 percent of their outstanding balances; 2010 grads fared especially poorly, with only 9 percent of their balances repaid five years after graduating. Subsequently, slow repayment has contributed to the burgeoning aggregate balance
(Excerpt) Read more at libertystreeteconomics.newyorkfed.org ...
Well, I paid mine and my husband paid his.
He’s always saying the minorities get all these breaks for college that the middle class does not get and has to pay for through working and taxes and they get the college grants.
I did. Eventually.
The government should either give grants or get out of the business of lending.
If the country feels it’s a worthwhile investment, set standards and make grants.
Otherwise, kids go through banks. This is how it was done for decades.
There is no reason for us to be hip deep in this loan crap.
I paid my bachelors and am almost done w/ my master’s.
Weeeeeeeeheeeee
It’s not just minorities. There are plenty of white kids who go to school for two years and drop out. This is an equal opportunity mess.
Ditto. The day I made that final payment was one of the happiest of my life.
I paid mine.
You could graduate from a State University in the 70’s with no student loan debt. And the diploma actually had value.
Agreed. The federal government should have no stake in this scam.
It’s interesting that in virtually all the discussions on student debt, the blame is usually placed either on the evil bankers for charging interest, or the government for not assuming student debt.
It’s never assigned to “Big College”, or the academic industry, which charges exorbitant tuition rates for sometimes inferior education, or to the students themselves, who take on debt without considering how they are going to repay it.
You’re right.
The root of the problem is that universities can charge whatever they wish, knowing that grants and loans will cover the cost.
If the government would discontinue providing both, tuition would once again be subject to market forces and would drop to the point of affordability.
Either that or the college would be forced to shut its doors.
I paid mine, including the interest. Of course, I also had a real degree which got me a job, rather than a BS in Leftist Agitation.
That said, I could support a program that might defer payments for a bit for those who have a useful degree with job prospects. You end up repaying the loan out of the lowest income of your career when those payments can be the most painful. Starting out, most of us had a lot of expenses - new housing, new car, new clothes, relocation, etc. It might make some sense to be able to defer the payments for 5 or even 10 years until you’re established and settled a bit.
I did. Paid in full. And those times were when my new wife and made a conscious decision to buy a pound if hamburger instead of the new Life magazine. (How many of these millennial deadbeats have cell phones?) Sorry, no sympathy from me.
Those who repay are the ones who create lives and business and intact families because they have to
The folks who do nothing but waste a year or two in college don’t
Make the colleges co-sign the loans.
Suddenly, they will stop admitting totally unqualified students, and stop offering majors which do not prepare students for a viable career.
Two of my daughters went to college on student loans. Both of them have already fully paid them off. One is 31 and the other is 34.
But that is because one got a degree in accounting and the other got a degree in civil engineering.
“The federal government should have no stake in this scam.“
The federal government should also have no stake or control in education or schools, period.
It is our federal gov and the progressives that infest it that created , basically, an education jobs program, which is sucking the dollars out of us and our children, in return for indoctrinating them toward unGodliness and socialism.
“Many of these loans will never be paid”
So go after the co-signers of the loans which would be the Parents / Guardians. Maybe their snot nosed 18 year old kids didn’t know what they were getting into, but they did.
I am retired now,but looking back on all this, I think if I had gone to school for my trade using a student loan, that I would not have been able to repay the loan & eat at the same time. The job just never paid well enough to do it. There were always ongoing expenses in connection with the trade that used up any extra.As it was, I was able to learn gradually through on the job training & some employer-provided technical training at various facilities. The thing is that if I’d had a student loan to pay off, my standard of living in the meantime would have been very minimal. Assuming the loan was eventually paid, experience has shown me that all the formal training would not have improved things (like the paycheck)enough to have made it worthwhile in the long run. I’m basing this not only on my own experience without the early formal training, but also on what I’m seeing with others who borrowed money & received that training.
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