The Student Loan Crisis Is Here, and It's Pretty Scary

In 2007, we suffered from a mortgage crisis. Today, we may be suffering from a student debt crisis.

New figures from the Federal Reserve Bank of New York show that while student loan debt is growing, students' ability to repay their debt isn't.

Younger students and recent grads under 30 years old are among the hardest hit. The percentage of loans 90 days delinquent or more rocketed to 8.9%, up from 6.5% just one year earlier.

Source: New York Federal Reserve.

Why delinquencies matter
Numbers need context. With 8.9% of student loan balances 90 days delinquent or more, student loans stand as the worst performing loans. When JPMorgan Chase  (NYSE: JPM  ) reported its earnings last week, the company reported that only 0.8% of its credit card balances were 90 days delinquent.

Said another way, supposed "high-risk" credit cards are performing better than student loans, debt which is supposed to leave students with an education and better career prospects -- and higher earnings.

But students are falling through the cracks, graduating with an average of $29,400 in debt, unable to repay their loans.

Source: DonkeyHotey,

The only good news
If there's any good news to be found in a student loan crisis, it's that it won't have the same immediate, devastating effects as the housing crisis. Unlike housing, a student can't exactly drop in value. When the mortgage crisis hit, nearly all home values plummeted.

No bank can foreclose on a degree, so it's unlikely successful graduates with full-time jobs and on-the-job skills will suffer at all. For the 8.9% minority, however, this is, in fact, a real crisis. Failure to pay student loans could keep them from buying a home, getting a necessary post-graduate degree, or having anything left when lenders garnish their wages to cover their outstanding debt.

Without meaningful improvement in employment, student loan delinquencies will likely only rise from here. Rising delinquencies are a troubling glance into what's to come.

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  • Report this Comment On January 19, 2014, at 11:26 AM, Bobc2 wrote:

    It's all about choices and getting a quality affordable education at the best school your finances will allow. I'm met folks who study Art History at expensive private colleges and wind up with a debt of over 100K but can't get a job because they have no marketable skills and the job market in their is extremely small.

    The purpose of a post high school education, whether technical, scientific, vocational, or liberal is to prepare oneself for the future. Part of that preparation begins BEFORE embarks on higher education.

    Once in the post high school education, they must learn to control their meagIer finances and live within their means.

    Several years ago at Starbucks I was standing behind this young lady who was vehemently complaining to her friend over there iPhone about the increase of tuition at the University of Washington. She ordered some fancy latte for 4.50 and dropped the change in the tip jar. I excused myself and asked her how many lattes a day she had, she responded 'at least two'. I said to her that drinking two lattes a day five days a week 50 weeks a year is about $2,500, enough for one semester at UW. She told me to mind my own business. I told her, it was about choices and obviously she wasn't making the proper choices for her time and position.

    She offered me 'half the peace' sign and walked away. The barista, apparently a mother of several teenage kids, handed me my 'drip coffee' and said 'it's on the house and thank you, I wish my daughter could have heard that'.

    Choices, when you open a door and walk through understand where it can take you.

  • Report this Comment On January 19, 2014, at 11:34 AM, colin112 wrote:

    Forcing the younger generation to buy over-priced insurance policies isn't going to help the situation much either.

  • Report this Comment On January 19, 2014, at 4:49 PM, peckbill wrote:

    How many educational loans for American college students, in the middle and lower class, would taxpayer money pay off if our government opted to eliminate foreign aid unless absolutely necessary; or, say for just six months to one year? Just think about it, wouldn’t it be better to keep the money in the United States of America than in the pockets of foreign powers; mostly foreign powers that will eventually use the same foreign aid money against the hand that feeds them; or, in the pockets of crooked politicians/leaders and greedy loan agencies that are money grabbing greedy Capitalists to their very core. We, the people, owe future Americans all the education that can be absorbed and use for a better America. America is currently running behind other countries in educating their young people.

    The government may need to add some incentives for those students who pursue degrees in things the United States needs the most, i.e., Engineering, Science, Medical, the Arts, Physics; do not provide incentives for degrees in such things as law, economics and the like; we currently have too many in these fields and the most of them are in government. We need some grass roots people in government so government will work as originally intended by the United States Constitution.

    Even when the cost of tuition (partially covered by the grant), room, board and meals costs are either not necessary or are partially paid for by loans, etc., some greedy professors make it mandatory that the students used a text book written by the professors teaching the class; and, the cost is usually over $100.00 (this is usually an out of pocket expense). This practice should not be allowed. This is just another reason education costs are so high and some of the time the quality of education suffers because the text book is not the best quality of material. On you first day of school everything goes to Hell. The teacher tells you what supplies you need, what books you need and what additional fees you must pay to continue the class; the catch is, these items must be in your hands by the next class which is day after tomorrow. You go over to the finance section of the college and tell them you need money, from your grant, to buy the things you need for class. The person in charge tells you that the money can’t be given out for at least two weeks; you have a sinking spell. What do you do? The grant givers or the College Administrators do not have the brains to see this problem. What about transportation costs for those students that can’t afford to reside on campus or do not live within walking distance; the cost of transportation is about $75.00 per week and doesn’t include a cheap lunch to keep you going for the day nor does it cover the very high cost of automobile insurance (insurance companies make a virtual killing from mandatory automobile insurance for college students). When you put it all together, you get screwed no matter where you turn for help. People complain about the cost of higher education; they don’t have a clue as to the actual cost; ask the student.

    American education should and must come first if America is to regain a positive posture in the world ranking of countries. Let us educate our young people to be true future leaders, in needed fields, that respect the Constitution of the United States of America. Raise the call “America first”.

  • Report this Comment On January 19, 2014, at 4:56 PM, MissDisplaced wrote:

    Can't pay student loans if you don't have a JOB.

    Can't pay student loans if all you can get is a part-time job.

    Creating jobs is the only thing that will fix this, but since Corporate America wants everyone to be part-time, minimum wage slaves people will continue to simply not pay.

    Surprise!

  • Report this Comment On January 19, 2014, at 5:42 PM, piasabird wrote:

    This crisis was manufactured by the federal government and its takeover of the school loans from the banks. The feds almost doubled the loan interest rate last year.

  • Report this Comment On January 19, 2014, at 5:44 PM, piasabird wrote:

    Student loans cant be forgiven.

  • Report this Comment On January 19, 2014, at 5:50 PM, Schneidku40 wrote:

    Do you have more recent data? Your graph seems to be over a year old.

  • Report this Comment On January 19, 2014, at 6:14 PM, kimkan2 wrote:

    The problem is, they rope in people because they get their names of some "poor dumb shlump" list and when they reel you in (and, by the way, I am intelligent) your life circumstances are okay AT THE TIME. Two years later, you're 50 hard+ years old and the economy has tanked and that $15,000 REASONALBE loan has suddenly spiraled out of control to....take my $5,000 refund while my parents are dying and I am not around to fight back; (number one) didn't know both my parents would die within four months of each other -- UNFORSEEN CIRCUMSTANCE -- (number two) was booted out of my home due to an abusive relationship that he pretty much got away with); (number three) -- started working HARDER in my twilight years to pay off said loan, and yet, every time around tax time, they decide they don't want to work with my payment arrangements anymore. Those whose educations are bought and paid for will say I should have known better. That irks me to no end. "There but for the Grace of God," is what you should be saying to yourself if you are fortunate to have not bought into this tragedy. I went back to school when things were good in my life and with the thought that towards retirement I would finally get a degree in something I am good at and financially could handle. However, and with hindsight being 20/20, I allowed the government and/or the loan guarantors to snow me into a false sense of security. I paid $5,000 on my $10K loan two years ago; it and the fact that I paid regular $80 a month payments for that year brought my loan balance to $4, 513. Now I am in default and owe $5,515. For someone who is book smart, I sure was dumb when it came to student loans. The whole system needs an overhaul, and those that say I shouldn't have taken out that loan initially, like I said before, "he who is without sin can cast the first stone." And I hope you've got a good aim and a clean conscience, because it can happen to anyone. Seriously, you never can tell when life changes course and you suddenly find yourself as an extra in "Trading Places". Big wet raspberry to those rich brats that think that poor people don't deserve no better. Language intentional.

  • Report this Comment On January 19, 2014, at 6:16 PM, Howdie wrote:

    We've created a permanent underclass and companies keep hiring foreigners on H1b visas.

    How about some of those companies pay for one year of intense computer training and then all those data-center operations people, which is really the blue-collar end of the computer jobs that only needs vocational training, could be USA citizens.

  • Report this Comment On January 19, 2014, at 6:26 PM, DHammer12 wrote:

    When the US Government went into the business of making available low cost student loans, the colleges started increasing their tuition costs. This was the main driver for the Student Debt problem. If Students would decide to wait until they could afford to go to College, the cost of College would dramatically shrink. Colleges are for-profit businesses and need to be motivated to reduce tuition costs to attract students. Also there is no guarantee of a good job after graduation to pay for College student loans. We see that today as many College graduates find it hard to get any job.

  • Report this Comment On January 19, 2014, at 6:29 PM, foolsall wrote:

    The Four Horsemen and the Grim Reaper responsible for destroying the lives of Generation X, the Millennial's; and, the next Generation - - yet to be named: 1. Financial Sector, 2. Higher Education Industry, 3. Health Insurance/Health Care Industries; and 4. Military Industrial Complex. They are robbing the Govt and our Young People - Blind!

    The Grim Reaper is the Chairmen of the Board; and, s/he feeds the Greed and the Destruction wrought on the Nation's Young. The Reaper is the Chairman of the Federal Reserve. To the Left of the Reaper at the Table is the U.S. Gov't - - to weak & dumb to intercede; and, to the Right; those Champions of Predator Capitalism: the Wall Street Robber Barons. Together, they all have schemed to decimate the Financial Futures of our Young. And,why the Young Saps aren't in the Streets; is beyond me. They are being hosed! They have little or no future!

  • Report this Comment On January 19, 2014, at 7:33 PM, mtdad80 wrote:

    I remember not more than four years ago automotive manufacturers begging for corporate well fare soon after then was the finical collapse all of them groping for tax payer bailout. Now corporate America will not left one _ _ _ _ finger to help prospective customers. Most corporate officer make more in compensation than largest majority of their employees and they wonder why the so hated.

  • Report this Comment On January 19, 2014, at 7:33 PM, kennie wrote:

    Student loans are part of the education process. If you don't want to work hard and suffer to get through college with out a student loan then you will pay the price later. I am an engineer and worked and interned through college. It took me longer To graduate but I did not have any debt when I graduated. I could be more choosey about who and where I went to work. My daughter is a junior in college and lives in an apartment and works to support herself and go to college without any student loans or scholarships. Its all about choices and planning for your future. Student loans may seem like the easy way but remember no debt is good debt.

  • Report this Comment On January 19, 2014, at 9:58 PM, RedHowler wrote:

    I've often wondered how a college or university could call themselves "non profit" while taking enormous amounts of money from students and paying themselves exorbitant salaries. Wait just a dang minute - - did I just answer my own question???

  • Report this Comment On January 19, 2014, at 10:15 PM, lidiworks wrote:

    Whenever the government tries to help, there is always a catch 22...they help you and hurt you at the same time, usually locking you down so that you can't grow financially. Congress has the power to fix this, but they would rather continue to squeeze blood from a turnip in creating a permanent slave class. Student loans are not always bad. People need an education to keep this country moving forward and the value of a college education isn't always there anymore, but tuition keeps rising. And yes, everyone should learn how to manage their money, but there are two, maybe three things wrong with students loans.

    First, they aren't treated like other loans. You can't refinance them or streamline them. The interest rate that you get when you get them you are stuck with. Banks can't change the terms to help with repayment even if they want to and you can't at least file a chapter 13 on them, which would then allow the courts to come up with a better payment plan (Notice that I said 13, not 7, because if you borrow for student loans it should be paid back to help the next students coming along.).

    Second, the repayment terms are not flexible enough and do not take into account unique financial situations. Everyone's life is very different, especially since the recession. There are no jobs, no good paying jobs, and wages do not keep up with inflation; they've been stagnant for years.

    Third, the forgiveness aspect of loans is ambiguous. If you have a private servicer you'll pay on your loans until you die. If the government services them, they forgive the rest after you reach government retirement age. Because the loans are sold, your servicer changes and you may be stuck with a private servicer. The other problem with forgiveness is that certain professions, like teachers, police, federal workers, etc. can have the remainder of their loans forgiven after they make a certain number of payments, maybe up to10 years. However, this little tidbit is never explained to students during their loan counseling sessions and its not retroactive!

  • Report this Comment On January 19, 2014, at 11:58 PM, Mossup wrote:

    On an apples-to-apples basis, student loan delinquencies are lower than car loans, credit cards, personal loans and all mortgages but prime. For these other credit products, chargeoffs occur if the borrower has not paid in four or five months. For federal student loans, default occurs at 12 months, and then post-default collection processes begin. Federal loans are never written off. There are so many tools the govt has to collect them, and bankruptcy discharge is almost impossible. Death and disability discharge are available, but the disability discharge process, which is now very quick, creates a lot of confusion with lawyers and the media, plus discharge of debt is generally taxable.

    A broken clock is still correct twice a day. What is ignored is that delinquency rates for federal loans declined from 2001-2011 -- which included one of the deepest recessions in American history. Clearly, the story is more complex that what the press has been describing. The borrower rights and entitlements in federal student loans are unusual and provide protection, or at least "insulation," for several years, against economic troubles.

    Clearly the connection between federal loan availability and increase in the sticker price of college is not what has been generally reported. For example, for decades the maximum borrowing permitted annually for undergraduates was not increased by Congress, yet this period coincided with the greatest period of inflation in the sticker price of college. Even after Congress began increasing the annual borrowing limits slightly after 2006, the lifetime, "aggregate" borrowing limit wasn't increased at all.

    The National Center for Education Statistics recently released data showing marginal increases since the 1990s in the average and median cumulative borrowed by graduating college seniors.

  • Report this Comment On January 20, 2014, at 1:18 AM, donnad wrote:

    I am graduate with my Master's degree in May and will wind up with about $60 thousand in student loans. To get my doctorate you can add almost that much more. I'm 40 and when I told my financial advisor I'd never live long enough to pay it all back, his reply was a laugh and "I don't care."

    If you've are nearing graduation consolidate all your loans under SALLIEMAE and your payment will be between $1 and $99 per month (income based), which is pretty affordable, even if you are working part time.

    Your loans will be forgiven after age 62 but can also be forgiven if you become disabled. I know several students who are attending college on student loans who are already disabled. And come to think of it, I've never seen the question "Are you disabled?" on the loan application, so will these students be forgiven upon graduation? The government may be surprised to discover themselves forgiving a mountain of debt to disabled people who were disabled all along.

    I obtained my Associates degree on student loans years ago, paid them all off, worked 15 years and went back to school. My best friend finished her Masters in December and now owes a whopping $72 thousand but will earn less than $40 thousand as an 8th grade math teacher. Her SALLIEMAE payment is $50 a month (income based) and she will reach retirement in less than 10 years. Her husband changed his major 4 times and spent 7 years on a four year degree. He owes as much as his wife owes for her Masters. Then he had a heart attack and is, you guessed it, disabled. Is anyone paying attention? They are now making student loans for students past retirement age. How does this make sense. They will graduate just in time to succumb to Alzheimer's or be placed in a nursing home by their children. Thankfully, loans can't be passed on to any one other than the borrower.

    My grandkids will not be able to attend school on student loans. I fully expect by the time they are old enough to attend college someone will realize the system is not functioning as it should and will stop the bleeding. So they all have a college fund being fed on a routine basis by Nana & Poppy.

    Student loans are just another WTF moment the government will soon face.

  • Report this Comment On January 20, 2014, at 1:27 AM, CaptEddie wrote:

    The real problem is the so called colleges like Sail time, ITT, etc that are for profit .... profiting at the expense of young unknowing kids who think they are getting a real accredited degree only to find out they were fooled with great $$ liability.

  • Report this Comment On January 20, 2014, at 2:16 AM, ronko wrote:

    Bobc2, the cost of attending the University of Washington is far higher than 2,500 a semester. Base tuition is 6,100 per semester. All the other costs(room and board, etc), bring it to 13,000 a semester for live-on campus students and 10,000 for those who live with their parents.

  • Report this Comment On January 20, 2014, at 4:12 AM, DevonShire123 wrote:

    I love how these media A-holes make it sound like it was some kind of accident, or twist of fate, that created this. As if it wasn't done deliberately by the banks, the same as the financial "crisis" of 2008 was done deliberately. Research United Nations Agenda 21 and you will begin to understand what's really going on.

  • Report this Comment On January 20, 2014, at 6:12 AM, Riggerwo wrote:

    The education establishment is doing just the same as "Big Pharma" driving up prices because they know the Government will cover the costs....the Presidents of many of these educational establishment s are earning over a Million $'s a year! Higher education needs to more affordable....the future of the nation is at stake....if the USA wants to stay ahead we need to ensure the brightest and the best can get the higher level education without ending up heavily in debt!...while the schools make millions.

  • Report this Comment On January 20, 2014, at 7:46 AM, kanina wrote:

    Wonder how many illegals we are paying for! It seems we don't have money for anything except schooling, housing etc for the illegals. Stop and maybe we would have money for the real citizens of the US.

  • Report this Comment On January 20, 2014, at 8:03 AM, bearme125 wrote:

    Good gosh! College pricks. I hope you stay on the hook for your loans. Pay back for what you signed on the dotted line. There are only a few exceptions for not paying students loans.

    No one owes you anything. I do not want anymore tax dollars going for colleges. We already have enough of this. State colleges being propt up by state governments. Another socialist piece of bleep.

    You college pricks got into this mess, so you own it. No sympathy here, and I hope everyone else thinks the same way. While you slept in during college and partied. Oh you went to class and learned something. Pay off your debts and stop crying.

    I hope you stay on the hook and wiggle like the worms that you are

  • Report this Comment On January 20, 2014, at 8:06 AM, bearme125 wrote:

    I truly hope the college punks stay on the hook and wiggle, like the worms they are. You and the whole college system are turning into parasites that live and breed off other peoples hard earned tax dollars. I tired of the American people picking up the tab for other peoples stupidity.

    That is the truth the whole truth and nothing but the truth. Freaking Socialist pigs will ruin the country.

  • Report this Comment On January 20, 2014, at 9:07 AM, mkn100 wrote:

    I can relate in part to Kimkans situation. I am in my late 50's and owe 33,000 in federal student loans. I too went back to school when I was 30 years old, I had been working in computer operations since I was in my 20's. Well, that job has become obsolete. I really had no idea what the heck I was getting myself into, and if I had it to do all over again..I would have never gone to college. Huge mistake. I wanted a degree so I would have job security, all I got out of college was a huge debt and getting bigger as I type this. For years, I thought of suicide, leaving the country..and other "not so great choices", but, I have finally made my peace with these loans, however; would be great if after 55 years old, the government would give us over 50 people a slash in half option of the loans.

  • Report this Comment On January 20, 2014, at 10:25 AM, boston wrote:

    What the article did not mention is that many people with student loans CAN'T get decent jobs because big business has decided that your credit rating is a reason to deny you a position. I, for one, have no choice but to take out loans. It's a cycle. You don't have the education needed to get a job so you go back to school. You still don't have a job and the only income you have is money from the loans. You still can't get a job so you can't pay off your loans. You still can't get a job because there aren't enough of them. You don't qualify because your credit is messed up from getting the loans.

    Choosing the "right" college for your money doesn't matter much. The tuition might be lower but the college itself may not have a stellar reputation that will get you in the door so you're back to square one anyway. I go to an "affordable" university yet I still owe loans I can't repay. Unless you're still living with your parents and they're willing to take care of you like you're some 10 year old, you're going to get into debt - period.

    It's all part of the scheme. Those who have want to keep it all. Big business requires these degrees to get in the door but they don't offer decent jobs that will pay off your student loans. Most don't offer jobs that will even pay the bills anymore. Working part time just won't cut it these days.

    I'll probably be a slave until the day I die. Of course, I'll probably die in debt but at least I tried to do something positive and get an education.

  • Report this Comment On January 20, 2014, at 10:33 AM, wmdiess wrote:

    My daughter will start college in the fall at a state university. It will cost about $20K a year all expenses included. The college fund I started seven years before she was born has $100K. If she works hard, she will finish school totally debt free with a little nest egg to get settled in the real world.

    I was able to build this fund in spite of several market down turns and numerous personal financial set backs. The key to success is my modest home and '99 Ford pick-up. Together, they left enough money at the end of the month to set aside for college.

  • Report this Comment On January 20, 2014, at 11:21 AM, abbeyinc wrote:

    It boils down to easy credit.

    There are parallels in this situation to the activities that fueled the housing crisis, and the auto manufacturers troubles in the late 90's.

    when credit gets too easy, two things happen:

    1- those who would not ordinarily qualify for credit, get credit.

    2- easy credit causes money to flow. The price of the product (car, house, education) climbs at a dis-proportionally rapid rate.

    This is what is occurring on the "business side" of the higher education system. The only piece of the parallel that is missing is the resulting crash.

  • Report this Comment On January 20, 2014, at 11:56 AM, MMA wrote:

    In Michigan the cost of a college education is MUCH HIGHER than the national average. I went back to school at age 43 and am now 50 still waiting for someone to hire me. I have two Bachelor degrees now (waiting for the recession to end, went back to get another skill to pay for the first). My degree is in accounting, but there is NO WORK in most of Michigan. I have a house here with a mortgage, I can't move. No one will hire me and I had an excellent work record previous to this recession. My student loans are $50k at age 50. I have NO IDEA what I'm going to do. Either way I've already lost.

  • Report this Comment On January 20, 2014, at 5:53 PM, OldJim51 wrote:

    Graduates in debt, mandatory enrollment in Obamacare, those two can add up to at least $1100 a month (average payment of $650 on $30K loan). How many careers offer a starting salary of $75K? Is it any wonder the 24 to 34 age group isn't enrolling and why they worry about how they will be in debt.

  • Report this Comment On January 20, 2014, at 6:56 PM, NikoTes wrote:

    @ CaptEddie

    "The real problem is the so called colleges like Sail time, ITT, etc that are for profit .... profiting at the expense of young unknowing kids who think they are getting a real accredited degree only to find out they were fooled with great $$ liability."

    I went to ITT. I had a base salary of 90k in 2013 and made 149k for the year with OT, bonuses and travel pay. 2014 will be at least 120k. I'm not in management and I pretty much get to set my own schedule. Get a job, network and work your way up.

  • Report this Comment On January 20, 2014, at 7:24 PM, donlargo wrote:

    It seems absurd to compare student loans to other, more conventional, loans. Student loans are not forgivable--they are for life and not subject to bankruptcy with very very few exceptions.

    In addition, to say that wages will be garnished is an oversimplification of the reality. An employer, wishing to avoid the cost of his HR people working as government debt collectors, will simply not employ a person with such a debt. This makes the defaulted loan recipient unemployable and unable to pay the debt and unable to become a productive part of society. This is not such a large leap from the debtor's prison of yore.

    I recently saw a comment to the effect that a person paying cash for a hotel room was obviously an undesirable element. Those with poor or no credit are shadowing characters and must pay more because they, ostensibly, have less. This makes a great deal of sense, I am sure you will agree. Moreover, as we all know, employers hire--or not!--based on credit checks.

    I-merica is an interesting place. In I-merica, a company can pollute the water supply through negligence or intention and, when sued, promptly file for bankruptcy and abscond with the ill-gained proceeds; but a student trying to make a better life and obligated to assume a mortgage over their future and who falls through the cracks will find that life is over--permanently!

    What a great country this!

  • Report this Comment On January 20, 2014, at 8:23 PM, aero1126 wrote:

    Good thing the ACA increased young people's health insurance the most.

  • Report this Comment On January 21, 2014, at 1:23 AM, em11965 wrote:

    The higher educational system is messed up. Curriculums are not suited for the jobs that are available. Students are unprepared for the job market. But these educational institutions are not held accountable enough. They charge these high rates but a lot of students cannot find employment.If the government started to institute a provision stating that some tuition would be withheld if a certain percentage of students could not find suitable employment, then I bet that schools would take more care in making students more employable and less care in filling their finances.

  • Report this Comment On January 21, 2014, at 2:13 AM, Debt4Eve wrote:

    Our taxes pay for public schools for all children up until high school age. The government if they care about children getting an education and an educated society, instead of giving out student loans should take that money and have public colleges that is covered by that money instead. There would be no educational debt unless a student wanted to go to a private school, which their parents would pay the tuition for. If the student enters school at 18, around 22 they would be ready for the job market with employable skills. The economy would start to improve and by the time the next phase of students enter college and finish their 4 years, there should be some jobs available that were built on the previous students because the economy would be growing instead of declining.

  • Report this Comment On January 21, 2014, at 8:17 AM, irieone wrote:

    You signed on the dotted line for the money. You owe the money. College is about lessons and learning. For those with loans they cannot repay, it is a tough lesson, but one that will help them in their future. Buy what you can pay for. If you decide to finance something understand the terms. Hopefully the lesson will be passed on if they have kids. The lesson is not that college is a waste. It is that, if you decide to go to college, understand how it will affect your future employment (what will you get form the degree you are studying for) and how much will it cost. Maybe it makes sense to get another degree than the philosophy degree and maybe it makes sense to work your way through and take a bit longer to get the degree. There are no short cuts...lesson learned.

  • Report this Comment On January 21, 2014, at 10:22 AM, straymoon2002 wrote:

    I am a parent of 3 sons they all have or are attending college all have had to get school loans to attend. I remember when I attended college the loan rate was at 2 or 3 % my monthly payment was @ $50.00 per month, it was a reasonal repayment, when I got my first job I could pay the loan amount and live comfortably. When my oldest got his first job, is loan payment was more then his car payment. He couldn't live on his own and pay all his bills. How are students leaving college be able to pay their school loans back when they can't afford them. My sons loans are at a 6-8% interest rate which is higher then today's mortgage rates. These interest rates need to be at a rate students looking for that first job in their field can afford to pay and live. 8% delinquency rate of loans is possible what should the student pay first, it isn't the school loan!

  • Report this Comment On January 21, 2014, at 10:57 AM, edgemont1 wrote:

    Seems to be best not to work anymore! You can get nice housing, medicaide, reduced gas and electric and other benefits. Most of all your repayment would be 0 dollars. You could volunteer for 10 years and pay 25.00 a month and have the loans forgiven. The authorities should just make it so that once you graduate you make five years payments no matter your field and your loan can be forgiven --- 100% This would ensure some responsibility upon the student to take the loan seriously but not overwhelm them in terms of ever paying it back.

  • Report this Comment On January 21, 2014, at 2:53 PM, hambone1969 wrote:

    Sorry but this is really just a self-fulfilling prophecy. Just look at the chart, and anyone can realize that this corresponds to the timeframe Oblablabla and the media proclaimed a looming student loan crisis. All that has happened is that kids who borrowed money on their own, (again like housing no one was forced to,) have decided to default because the administration and the media have TOLD us that it is a looming default crisis. Any genius would decide to default now and blame the loans, but in reality they are just being opportunistic. Just like the housing crisis. SOME people lost jobs and defaulted, but others who could have kept paying decided to pile on and get out of bad choices by blaming "the loans".

    Be careful what you wish for Obama, because here it is clear that YOU and the media precipitated this default "crisis".

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