I was in college in the late 1980’s with a study plan to get a 4 year degree in finance, it called for two years at Santa Rosa JC in Sonoma County (at the time the largest junior college in the country) and the core two years at SF State. Mish, I have mixed feelings about this trap, and as long as the debt can’t be discharged in BK like other debt it is certainly a trap with no way out. Rather, escalating costs went to teachers, administrators, and their pensions as student debt piled sky high.
Not a single student aid program aided any students. The solution is to stop the meddling: Stop all the loan programs, stop all the aid programs, stop insisting that everyone needs to go to college, and start accrediting programs and course offerings from places like the Khan Academy. Wherever government meddles, costs rise dramatically. There is one way to get rid of these loans. Thank you Congress, President Bush, and President Obama.
25 WITH A WORTHLESS DEGREE AND STUCK IN A DEAD END JOB PLUS
Parents plus their kids are mired in debt that cannot be paid back. President Obama came along next and encouraged parents who had no idea what they were getting into to sign loans to put their kids through college. In 2005, president Bush signed the bankruptcy reform act of 2005 making student loans not dischargeable in bankruptcy. More than three million others owing $88 billion have fallen at least a month behind or have been granted temporary reprieves on payments because of financial distress.” Roughly eight million Americans owing $137 billion are at least 360 days delinquent on federal student loans, nearly the number of homeowners who lost their homes because of the housing crisis. By comparison, subprime mortgages peaked at nearly 20% of all mortgage originations in 2006. That figure excludes borrowers, such as many 18-year-old freshmen, who lacked scores because of shallow credit histories. Nearly four in 10 student loans-the vast majority of them federal ones-went to borrowers with credit scores below the subprime threshold of 620, indicating they were at the highest risk of defaulting, according to a Wall Street Journal analysis of data from credit-rating firm Equifax Inc. The Obama administration supported such lending in an effort to widen access to college education. Between 20, enrollment grew 20%, the biggest increase since the 1970s. The financing fueled a surge in college enrollment. Overall student debt, most of it issued by the federal government, more than doubled to $1.3 trillion over that period. The number of Americans with federal student loans, including through programs for undergraduates, parents and graduate students, grew by 14 million to 42 million in the decade through last year. “You can’t avoid that we’re targeting high-cost, high-dollar-amount loans to people who we know can’t afford to repay them.” “This credit is being extended on terms that specifically, willfully ignore their ability to repay,” says Toby Merrill of Harvard Law School’s Legal Services Center. More recent Education Department data show another 180,000 of the loans were at least a month delinquent as of May 2016. mortgages at the peak of the housing crisis. Then it extends loans that are nearly impossible to extinguish in bankruptcy if borrowers fall on hard times.Īs of September 2015, more than 330,000 people, or 11% of borrowers, had gone at least a year without making a payment on a Parent Plus loan, according to the Government Accountability Office.
The problem is the government asks almost nothing about its borrowers’ incomes, existing debts, savings, credit scores or ability to repay. “Student loans made through parents come from an Education Department program called Parent Plus, which has loans outstanding to more than three million Americans. It’s Easy for Parents to Get College Loans-Repaying Them Is Another Story. Kids graduate from college with useless degrees, plus parents and kids are stuck with massive bills that cannot be paid back. The default rate exceeds the rate for U.S. The results speak for themselves: Nearly 40% of the loans are subprime. The program was enacted by Congress in the 1980s, but president Obama promoted it heavily.
0 kommentar(er)
