Student Debt...

[Gob]

NEW YORK: As the number of Americans taking out government-backed student loans has exploded, so has the number who have fallen at least 12 months behind in making payments, increasing by about a third in the past five years.

Nearly one in every six borrowers with a loan balance is in default. The amount of defaulted loans, $US76 billion ($73.1 billion), is greater than the yearly tuition bill for all students at public two and four-year colleges and universities, according to a survey of state education officials.

To get the money back, the Department of Education paid more than $US1.4 billion last financial year to collection agencies to hunt down defaulters.

Hiding from the government is not easy. ''I keep changing my phone number,'' said Amanda Cordeiro, 29, from Clermont, Florida, who dropped out of college in 2010 and has fielded as many as seven calls a day from debt collectors trying to recover her $US55,000 in overdue loans. ''In a year, this is probably my fourth phone number.''

Unlike private lenders, the federal government has extraordinary tools for collection. Ms Cordeiro has already had two tax refunds seized, and other debtors have had their pay cheques or social security payments garnished. Overall, the government recoups about 80¢ for every dollar that goes into default.

The recovery rate is impressive but critics say it has left the government with little incentive to try to prevent defaults in the first place.

For borrowers, the decision to default can be disastrous, ruining their credit and increasing the amount they owe, with penalties of up to 25 per cent of the balance.

Ms Cordeiro, a single mother, dropped out of Everest College, a profit-making school, 16 credits shy of a bachelor's degree. She said she could not get any more loans to finish. ''I get these letters about defaulting, and I get them and throw them in the bin,'' she said.

Jake Brock, who graduated in 2008 from Keuka College, a private liberal arts school in upstate New York, defaulted in May on a federally guaranteed loan of $8000. With penalties and accumulated interest, the loan balance is now $13,000, he said. ''I just fell behind and couldn't dig myself out,'' said Mr Brock, who is 29 and owes $100,000 in student loans.

There is no statute of limitations on collecting federally guaranteed student loans and Congress has made it difficult for borrowers to wipe out the debt through bankruptcy. Only a small fraction of defaulters even try.

[Guinevere]

If we took all the money we spend on campaigns and spent it on providing the best post-secondary school education a kid could get, we'd be in a far better place than we are today.

This is an issue the occupiers never figured out how to get their heads around, and it's a good one if a sane solution could be devised.

[MajGenl.Meade]

... and if we took all the money spent on NFL players
... and if we took all the money spent on NASA
... and if we took all the money spent on libraries
... and if we took all the money spent on (insert your particular peeve here)

Maybe the important thing is just to take all the money - I think both parties have a programme for that, only each has somewhat different emphases

Meade

[Econoline]

Let's see now....

It's essential that every high school grad takes on massive debt because, though college is expensive, a college degree is an essential requirement in order to secure a well-paying job, and it's essential that every college grad secure a well-paying job in order to be able to pay back the massive debt they will have by the time they get that college degree.

Have I got that right?

[oldr_n_wsr]

Everyone (well not everyone but many politicos and many in the education community) keep saying keep interest rates low and availability to loans high so students can go on to college and get that degree and get that high paying job. But no one wants to look at the college costs, nor that not everyone is college material. The emphasis in high school now-a-days is "go to college" which has caused (among other factors) college costs to skyrocket.

Even if new housing construction has declined, there is still a need for many people in the skill trades (plumbing, electrical, construction, auto mechanics, etc) yet high schools have been cutting these classes in the name of sending more kids to college. Which perpetuates the need for what? More teachers.

Now I have no beef against teachers other than here on Long Island they make too much ($100K+ before benefits with step increases and increases for taking courses even for those coarses not in their expertise). But it seems to me the machine just keeps feeding itself and demanding more and more to be paid into it's own sustanance.

Cut back on the demand for college seats by increasing alternate career paths for those not inclined to go to college. Many of which go for a couple of years and drop out anyway with the debt burden (or loss of savings of their parents who are fortunate enough) and then find they are better off being an electrician.

And for those who are "college eligable", cut the costs of going to their first/second/third choice as that source. That is the college itself.
Not all debt is from the student making improper choices.

[rubato]

The median college debt was about $20,000 which I don't think is unreasonable. That's about the price of a new car.

While I generally favor higher levels of funding for education (and agree with John Keegan the military historian that money should be poured out and wasted on education) It is still true that those who benefit should bear some of the costs because many will never be able to benefit ( because of lack of ability or their parents are red-neck Republicans) and they should not subsidize all the costs.



yrs,
rubato

[rubato]

If we took all the money we spend on campaigns and spent it on providing the best post-secondary school education a kid could get, we'd be in a far better place than we are today.

This is an issue the occupiers never figured out how to get their heads around, and it's a good one if a sane solution could be devised.

Well that's right. If you want a better future you will spend more on education today not for tomorrow but for the generation after that. We had Steve Wozniak and Steve Jobs because their parents were able to get an education. And that's how it works.

If you want a bunch of mean fuckers running things today (Republican Majorities) then you will have to accept that we will be weaker and more helpless in the future.

yrs,
rubato