You don’t have to be a smart person to know that any loan program that has a 40 percent default rate is not a stellar product. Well, that’s the forecast for student loans as more than 1 million people a year pile on to the current people drowning in student loan debt.
Education debt has gone up 300 percent over the last decade and unmanageable student loans for many people are not easily discharged in bankruptcy. Keep in mind some student loans ARE eliminated in bankruptcy.
It wasn’t all that long ago when people could not believe student loan indebtedness was crossing $1 trillion dollars. Now it is more than $1.5 trillion with no end in sight.
Somehow we believe that continuing down the same path of overlending to fund underperforming education is going to make this situation better. Isn’t that the definition of insanity – doing the same thing over and over and expecting a different result? It’s actually the classic definition of “cluster f***” – a disastrously mishandled situation or undertaking.
“Ditzy DeVos,” as President Trump has been said to call her. Is robbing students of protections and options only to seemingly fuel the gravy train of lenders and ineffective schools to sell loans and shoddy education. Yet young students and adults keep buying this crap.
Holding schools accountable for the education product they sell is so 2012. Today the message seems to be students need to lookout for themselves, defrauded students will not be able to get rid of that crappy debt, and new government rules prohibit states from putting rules in place to regulate loan servicers and Great Lakes Educational Loan Service told California to go pound sand.
According to CNBC, “Defaulters are less likely than nondefaulters to have types of debt that require a risk assessment, like credit card, auto and mortgage debt. They’re more likely than nondefaulters to have their utility and medical bills fall into collections, as well.”
“Federal loans come with a lot of protections that should make default rare, said Kristin Blagg, a research associate at the Urban Institute, focusing on education.
However, she learned, that is not the case: Within four years after leaving school, nearly a quarter of the borrowers had defaulted. “To default is still pretty common,” Blagg said.”
If there are any adults in charge who actually care about solving the student debt problem, please step forward.