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 nearly two decades, raking in tens of millions of dollars in annual revenue.
Navient used to be Sallie Mae, but messed up like a restaurant that gives 50 people food poisoning so has to change its name to stay in business.
But, for that to work, you have to stop poisoning the clientelle.
The Consumer Financial Protection Bureau has been investigating the company for about two years, and the Education Department last year declined to extend Pioneer’s expiring debt collection contract after determining that the company’s employees had misled borrowers at “unacceptably high rates.” Navient sued the Education Department in federal court to overturn its decision. The case is still pending, and the company has denied any wrongdoing.
Trouble Paying Student Loans?
Well, one of my themes, and I am not alone on this, is that the student loan bubble pumped up tuition costs, as colleges did not want to miss the gravy train, so created more programs (that would not lead to jobs) and lowered admission standards to make more money.
Gee, sounds like the mortgage crisis/real estate bubble.
Because it is.
So, for the first (?) time, the Department of Education released stats on whether folks with student loans have degrees that will enable them to earn enough income to, repay the student loans.
gainful employment regulations, which attempt to measure whether graduates of career-training programs end up earning enough to afford their student debt. The Obama administration defined affordability as annual loan payments of no more than 20 percent of discretionary income, or 8 percent of total earnings.
Somehow, the Obama administration seems to always find that private, for profit colleges are the problem.
More than 800 career-training programs across 296 schools produced graduates who recently left school with loan payments exceeding either 30 percent of their annual discretionary income or 12 percent of earnings, government data show. The schools range from the defunct ITT Technical Institute to Harvard University. (A graduate certificate in drama from the Ivy League school leaves the typical student with debt that’s 44 percent of discretionary earnings). Unless they challenge the data, schools must warn prospective students that they’re at risk of losing access to federal student loans within a few years.
Of course, there is a problem. And Harvard is a private school.
I wonder how many law schools are in there?
Law school seems to be the most expensive degree with the worst results. More in student loans, way more, and fewer and fewer good paying jobs.
Watch for what the Trump administration does on this issue.