It’s over, there is no possible way to ever save the college loan crisis, and when this bubble bursts it will greatly affect all Americans. As of October 1, 2016 there were 44.2 million people in the US that have student loan debt, most of these student loans have parents or grandparents as cosigners, and it gets worse, as the fallout rates or technical default rates could be as high as 50%. If this doesn’t worry you, then you are not paying attention.
Recently there was an article in Activist Post titled: “America’s Problem with Student Loans Is Much Bigger than Anybody Realized,” by Shaun Bradley published on February 2, 2017. The article stated the sum of all fears:
“The Department of Education recently released their findings that repayment rates on student loans have been grossly exaggerated. Data from 99.8% of schools across the country has been manipulated to cover up growing problems with the $1.3 trillion in outstanding student loans.”
The article also noted that the default rates are 50% now, and huge numbers have never made a single payment, others no payments within 7-years and the default rate went from 38% to 50% in less than 2-years. Why? Most likely due to all the talk about “free college for everyone” during the recent presidential election, and if you will recall both Hillary Clinton and Bernie Sanders both talked about college tuition loan forgiveness, and free college for everyone.
Right now, the bad debt equals more than $650 Billion, and the taxpayer is on the hook for a good chunk of that, but we will all feel the fallout regardless. Welcome to the power of socialism.
The USA Today noted that; “Approximately 90% of private student loans are co-signed by a parent, according to a 2012 report by the CFPB and the Department of Education – that’s up significantly from previous years,” in an article titled; “The dangers of co-signing a student loan,” by Jessica Dickler of CNBC put forth on January 16, 2016.
We all by now know that most of those leaving school with degrees will not work in the job categories of that knowledge set. Only 15% are expected to still be working in fields for which they got their degrees, and many of those jobs won’t be around in the next 10-years.
What are we doing to fix the problem? Nothing it seems, college tuition increases continue each year, and new semesters start twice or three times a year, more debt, more students, more loans, more defaults, the bubble is on autopilot but the rubber is about to splatter all over the room, and unfortunately, it’s too later. Of course, everyone is going to find someone to blame; Obama Administration, Banks, Students, Universities, and those wealthy one-percenters of course. Sure, the left will blame capitalism and the right will blame socialist – does it matter now?
Didn’t we just recover from the mortgage crisis bubble, and 2008 crash? What did we learn? Not much apparently. Well, way to go humans, you got caught up once again in your BS and echo chamber – I had hopes for you, but you keep proving yourselves incapable – humans? Please think on this.
(1) Article: WSJ (Wall Street Journal), “Student Debt Payback Far Worse Than Believed – Revised Education Department numbers shows at more than 1,000 schools, at least half of students defaulted or failed to pay down debt within 7 years,” by Andrea Fuller, January 18, 2017.
(2) Book: “Campus Politics – What Everyone Needs to Know,” by Jonathan Zimmerman, Oxford, 2016, 146 pages, ISBN: 978-0190627409.
(3) YouTube Video: “Did You Know”