Student Loan Crisis Continues

Hey, I would like a new topic, too!

student loan crisis
Burn that diploma?

Email me if you have something other than

student loan crisis that you want me to discuss.

How Bad Is The Student Loan Crisis?

Catherine Curan at the New York Post writes, it is getting worse at the hands of servicers.

Old news, yes, but, it is not getting better.

Earlier this month, the Consumer Financial Protection Bureau slapped the nation’s largest student-loan servicer, Navient — formerly part of Sallie Mae — with a lawsuit alleging the company incorrectly processed payments, and steered troubled borrowers toward expensive repayment plans.

As I have written before, the student loan servicers are walking, or, should I say, tripping, in the shoes of the mortgage servicers who helped botch that crisis.

The Student Loan Hero website recently updated the bad news.

If those numbers weren’t stunning enough, here’s a closer look at how students accumulate debt based on the type of school they attend.

In 2012, 71 percent of students graduating from four-year colleges had student loan debt:

  • Represents 1.3 million students graduating with debt, increase from 1.1 million in 2008
  • 66 percent of graduates from public colleges had loans (average debt of $25,550)
  • 75 percent of graduates from private nonprofit colleges had loans (average debt of $32,300)
  • 88 percent of graduates from for-profit colleges had loans (average debt of $39,950)
  • Read the whole story, but I will share some more:

Graduate student loan debt

About 40 percent of the $1 trillion student loan debt was used to finance graduate and professional degrees.

Combined undergraduate and graduate debt by degree:

  • MBA = $42,000 (11% of graduate degrees)
  • Master of Education = $50,879 (16%)
  • Master of Science = $50,400 (18%)
  • Master of Arts = $58,539 (8%)
  • Law = $140,616 (4%)
  • Medicine and health sciences = $161,772 (5%)

I should remember what law school cost back in the last millenium, as I paid for it, but, I don’t.

Nowhere near what it cost these days.

And what is that diploma worth, that law degree?

I am filing bankruptcy cases for lawyers making $14 per hour.

Working as lawyers.

That is not enough to make a living and pay off six figure student loan debt.

I read that we have 5,000 janitors with master’s degrees.

I know some of my clients take graduate programs to kick the can down the road, to put off the date they have to start repaying their student loan debt.

Not a good strategy, as they are borrowing even more money, which is not the way to solve a debt problem.

In spite of what our federal government does.

Law schools have been making so much money, there are more of them admitting more students, who are failing the state bar exams in increasing numbers.

The law schools solution?  Lower those test standards!

 

Student Loan Crisis – How Does It Stand?

New presidents mean new policy, for the student loan crisis, that meant re-instating the 16 per cent collection fee on delinquent student loan debt. Although the fee was only stopped by the Obama administration last year, the New York Times bemoans its resurrection. The Education Department’s decision to let guaranty agencies gouge struggling people is… Continue Reading

Student Loan Bubble Update

I long for the day when the Student Loan Bubble Update is good news. Let’s lead with the surprise: According to the survey of 500 college students by LendEDU, a private firm that connects students and their families with student loans and loan refinancing, almost half of those responded that they believe they would be… Continue Reading

Bankruptcy Discharge Of Student Loans

Folks keep telling me that Bankruptcy Discharge Of Student Loans does not/can not happen. Even a lawyer friend I was speaking to last week. “What?  You can get rid of student loans in bankruptcy?” Uh, yes.  Not automatically.  Not easily.  But, yes, you can. Chapter 7 Discharge of Student Loans When a bankruptcy case is… Continue Reading

Navient Again – Student Loan Servicers

Sallie Mae acquired such a bad reputation that it changed its name to Navient. But the service has not improved, as Navient is at the center of the Student Loan Servicers Mess. What Do Student Loan Servicers Do? Here is the Department of Education definition of Student Loan Servicer: A l(student) oan servicer is a company… Continue Reading

Navient & Student Loan News

Navient, formerly Sallie Mae, still on a  losing streak. Navient Shahien Nasiripour writes frequently for Bloomberg on student loan issues. So there is lots of material. Navient Corp. lost out on a lucrative government contract to collect on defaulted federal student loans late last week, disappointing previously optimistic investors. The company has collected on such debt for… Continue Reading

Student Loans And Politics

Bernie Sanders wanted free college for everyone. Well, somebody would be paying, just, not the students. The Obama administration does not like for profit colleges, among other for-profit entities it dislikes. New rules are supposed to make it easier to get rid of student loans incurred to attend fraudulent colleges/programs. President elect Trump, a big… Continue Reading