Student Loan Update

Yes, you don’t need the reports to know the student

Yes, you don't need the reports to know the student   loan crisis is going to get worse.  Just keep reading this blog.  Americans are facing a "looming" student loan default crisis that is more serious, and more complex, than previously understood, an analysis of new federal data suggests.  Almost 40% of borrowers who entered college in 2004 are likely to default on their loans by 2023, the report predicts. And the impending crisis will hit marginalized students the hardest, with sky-high default rates among black students and those at for-profit colleges.  Yeah, the more student loan debt you have, the more defaults you get.  And with the balances bigger, the default rates increase.  For people who entered college in 1996 and took out loans, the data shows, 18% had defaulted after 12 years, and more than a quarter had defaulted after 20. But those numbers jumped sharply for those who entered college in 2004: Some 27% had defaulted after 12 years, a nearly 50% increase.  More Bad Student Loan Debt News FROM THE INTEREST GROUPS The American Legion and National Consumer Law Center published an op-ed in Politico's Morning Consult on the taxation of death and disability on student loan discharges. In it they argue, when a borrower dies or becomes permanently disabled before paying off a student loans, the loans can be discharged, relieving the disabled borrower or surviving family members of the burden of paying off a loan they often cannot afford. However, The Internal Revenue Service may treat the amount of the forgiven loan as taxable income. Although some will be able to exempt this income because they are insolvent, not all will qualify. As a result, a family that was relieved to have a student loan forgiven may then end up struggling to pay a big tax bill - all while dealing with the death of a child.  OTHER On October 14th PBS News Hour has a featured episode titled "More older Americans than ever are struggling with student debt". Watch it online now. Student Loan System Is Broken Megan McArdle is right:  Most of the eye-popping figures that you hear about student debt are in fact averages that include graduate programs. Once you separate those figures, you see that most people with bachelor’s degrees actually took on modest sums that look more like a car loan than a mortgage. There are pockets of trouble in Undergraduate Land: students at for-profit colleges, and people who borrowed relatively small sums but never finished their degree. But most of the high-debt burdens fall on people with graduate degrees.  As long as those degrees bring a big income boost, that’s fine. But there’s a troubling wrinkle: The proliferation of master’s degrees may simply allow employers to demand an advanced degree for jobs that used to be open only to candidates with a bachelor's degree. That makes things easier for employers, by winnowing down those huge stacks of resumes. It’s certainly nice for the colleges. But it costs the graduates enormous amounts, not just in tuition, but in the earnings they forgo while they’re in school. And considering all the subsidized repayment programs the government has made available to help graduates manage their debt burden, it is also costly for taxpayers.  The Answer? That problem is federal student lending itself. The government has no incentive to make only those student loans that make sense. It ought to get out of this business and leave it to people who are playing with their own money.  Read more at: http://www.nationalreview.com/corner/455300/martin-center-article-borrower-defense-repayment-controversy
Student Loan debtorPRISON

loan crisis is going to get worse.

Just keep reading this blog.

Americans are facing a “looming” student loan default crisis that is more serious, and more complex, than previously understood, an analysis of new federal data suggests.

Almost 40% of borrowers who entered college in 2004 are likely to default on their loans by 2023, the report predicts. And the impending crisis will hit marginalized students the hardest, with sky-high default rates among black students and those at for-profit colleges.

Yeah, the more student loan debt you have, the more defaults you get.  And with the balances bigger, the default rates increase.

For people who entered college in 1996 and took out loans, the data shows, 18% had defaulted after 12 years, and more than a quarter had defaulted after 20. But those numbers jumped sharply for those who entered college in 2004: Some 27% had defaulted after 12 years, a nearly 50% increase.

More Bad Student Loan Debt News

FROM THE INTEREST GROUPS The American Legion and National Consumer Law Center published an op-ed in Politico’s Morning Consult on the taxation of death and disability on student loan discharges. In it they argue, when a borrower dies or becomes permanently disabled before paying off a student loans, the loans can be discharged, relieving the disabled borrower or surviving family members of the burden of paying off a loan they often cannot afford. However, The Internal Revenue Service may treat the amount of the forgiven loan as taxable income. Although some will be able to exempt this income because they are insolvent, not all will qualify. As a result, a family that was relieved to have a student loan forgiven may then end up struggling to pay a big tax bill – all while dealing with the death of a child.
OTHER On October 14th PBS News Hour has a featured episode titled “More older Americans than ever are struggling with student debt”. Watch it online now.

Student Loan System Is Broken

Megan McArdle is right:

Most of the eye-popping figures that you hear about student debt are in fact averages that include graduate programs. Once you separate those figures, you see that most people with bachelor’s degrees actually took on modest sums that look more like a car loan than a mortgage. There are pockets of trouble in Undergraduate Land: students at for-profit colleges, and people who borrowed relatively small sums but never finished their degree. But most of the high-debt burdens fall on people with graduate degrees.

As long as those degrees bring a big income boost, that’s fine. But there’s a troubling wrinkle: The proliferation of master’s degrees may simply allow employers to demand an advanced degree for jobs that used to be open only to candidates with a bachelor’s degree. That makes things easier for employers, by winnowing down those huge stacks of resumes. It’s certainly nice for the colleges. But it costs the graduates enormous amounts, not just in tuition, but in the earnings they forgo while they’re in school. And considering all the subsidized repayment programs the government has made available to help graduates manage their debt burden, it is also costly for taxpayers.

The Answer?

That problem is federal student lending itself. The government has no incentive to make only those student loans that make sense. It ought to get out of this business and leave it to people who are playing with their own money.

Read more at: http://www.nationalreview.com/corner/455300/martin-center-article-borrower-defense-repayment-controversy

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Student Loan Update
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Student Loan Update
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Student Loan news, more student loan debt, more defaults, senior citizens affected, you know the solution.
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