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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsCollege Used to Be the American Dream -- Now It's the American Nightmare
http://www.alternet.org/economy/college-used-be-american-dream-now-its-american-nightmareNow that student loans are undeniably in bubble territory, the officialdom is starting to wake up and take notice. Evidence that students were taking on so much debt as a group that it was undermining their ability to be Good American Consumers wasnt enough. A recent New York Fed study found that 94% of recent graduates had borrowed to help pay for their education, and average debt levels among student borrowers is $23,000. Remember, that average includes seasoned borrowers, who presumably borrowed less and also in many cases reduced the principal amount of their loans, so the average amount borrowed by recent grads is certain to be higher. Student debt is senior to all other consumer debt; unlike, say, credit card balances, Social Security payments can be garnished to pay delinquencies. As a result, it has contributed to the fall in the homeownership rate, since many young people who want to buy a house cant because their level of student debt prevents them from getting a mortgage.
But despite some pious noises about the burden that student loans place on young Americans, theres been no willingness in the officialdom to do much about it. But that may finally be changing. The latest Federal Reserve data is grim.
Student loan delinquencies are getting into nosebleed territory. The Wall Street Journal, citing New York Fed data, tells us that student debt outstanding increased 4.6% in the last quarter . Repeat: in the last quarter. Annualized, thats a 19.7% rate of increase* during a period when other consumer borrowings were on the decline. And this growth is taking place while borrower distress is becoming acute. 11% of the loans were 90+ days delinquent, up from 8.9% at the close of last quarter. The underlying credit picture is certain to be worse, since many borrowers arent even required to service loans (as in they are still in school or have gotten a postponement, which is available to the unemployed for a short period). And it was the only type of consumer debt to show rising delinquency rates.
Democracyinkind
(4,015 posts)My whole education at my University cost me roughly 6'000 dollars. That is BA, MA; PhD.
It's possible. Then again, the University I attended (in Europe) didn't conceive of itself as a for profit corporation, but rather as a public service. I suspect that is the relevant difference here.
Live and Learn
(12,769 posts)Raster
(20,998 posts)...enterprise. While (generally) the European countries and their educations systems are a natural extension of public service.
geckosfeet
(9,644 posts)loans to servicers with ridiculous terms that would be illegal or rejected in most other markets.
It's just another case of the lenders (the rich) leeching off of the federal tax dollar lode.
duhneece
(4,118 posts)It became a for-profit enterprise. We quit having those who made the most off of the infrastructure they made their money from have to pass it on, in the form of taxes.
Mass
(27,315 posts)My son went for a graduate program in Europe, because his costs were 5 times less than he would have to pay for an American school. And, as he has double citizenship, he even got a grant because of his low income and ends up having to pay for nothing without loans, vs a $30,000 loan a year here in the US.
Democracyinkind
(4,015 posts)Imagine how many bright, promising kids haven't gotten the same chance by sheer luck of birth. It's saddening.
CrispyQ
(36,518 posts)It had a graphic of a cancer cell & the words, "What if the cure to cancer is inside the head of someone who can't afford an education?"
The everything-for-profit model has got to stop.
riderinthestorm
(23,272 posts)and in her field, the top school in her field so she got the best education as well.
uponit7771
(90,364 posts)dotymed
(5,610 posts)for wrecking our economy. The least we can do is forgive student loans and make future education reasonable. Capitalism (unregulated) has totally destroyed our country, all for the sake of a few hundred elites.
GatorLarry
(55 posts)Wall Street has bought and paid for the Congress and Senate and so all laws that pass will benefit them and screw the un-represented students with outstanding loans.
lonestarnot
(77,097 posts)woo me with science
(32,139 posts)Keep saying this, until the entire nation is saying it together. There are more of us than there are of them.
Dustlawyer
(10,497 posts)disincentive to ever stop ripping us off. Eric "weak sauce" Holder comes from Wall Street so you know he won't do anything. BP gets off Scott free b/c they paid off the administration. We are the only ones that laws apply to.
grahamhgreen
(15,741 posts)central scrutinizer
(11,662 posts)The whole disinvestment in our future has been widespread. Reagan at the federal level, state anti-tax initiatives like the one pioneered in California by Howard Jarvis, other state legislatures cutting investment in public universities. Horribly short-sighted. If you don't invest in the future just so you can treat yourself to a couple of extra toys right now, you will pay a much higher cost down the road. We have also seen this in deferred maintenance for vital infrastructure as well. Everything has been sacrificed on the altar of "lower taxes - it is my money".
Mass
(27,315 posts)make it virtually impossible for people to attend schools (including private schools) without incurring high loans. Frankly, the cost of American Universities is way too high, including for lower tier ones.
former-republican
(2,163 posts)Sports , some professors earning over $200,000 a year
Coaches making salaries that rival pro teams coaches
MadrasT
(7,237 posts)When I went to college in the 80s my dorm room had cinder block walls and one bathroom for the whole floor.
They made colleges like resorts now. Kids don't need the kind of luxury accommodations colleges are providing now. They need educations.
former-republican
(2,163 posts)JaneyVee
(19,877 posts)business, environmental studies.
former-republican
(2,163 posts)JaneyVee
(19,877 posts)former-republican
(2,163 posts)country.
Call me radical but I would like to see a take over of all higher learning intuitions.
dkf
(37,305 posts)sulphurdunn
(6,891 posts)universities has been on the decline for years. Parasitic corporations get to lend the difference or front phony online universities with public money. States can divert educational funds as tax "incentives" to business. It's a win-win for states, banks and corporations desiring to turn the university into for profit training centers, and they will not stop sucking until they are burned off.
JPZenger
(6,819 posts)It is all tied together. If you look at trends in state spending throughout the country over the last couple decades, the money that used to go to state public universities was diverted to pay for increased medicaid/medical assistance expenses of the states. We need cost control of both colleges and health care in order to make the system work.
sulphurdunn
(6,891 posts)that to be true in states unwilling to collect enough revenue to fund their public sectors. They need worry less about cost and more about revenue. California comes to mind. A good place to start would be a Constitutional amendment forbidding states to pass any laws that restrict their power to levy taxes.
dkf
(37,305 posts)I'm glad they took student loans away from the banks so now we can see that these bubbles happen without accusing others of fraud.
Are students going to be demanding jubilees from the evil, greedy and corrupt government now?
Response to dkf (Reply #27)
marmar This message was self-deleted by its author.
central scrutinizer
(11,662 posts)I believe the University of North Carolina was the first, but several other large public universities, like University of Oregon, have programs that guarantee that all tuition and fees for low-income in-state students will be covered without loans. I am most familiar with the Oregon one - the Financial Aid office reviews all in-state applicants and their FAFSAs (Free Application for Federal Student Aid). If a student meets the criteria, he or she is offered a package that covers 4 years worth of tuition and fees guarantees, as long as the student remains in academic good standing (at least 12 credits per quarter with a cumulative GPA of at least 2.00). They count up the Pell Grant, any other scholarships or grants the student may have earned and if there is still a gap, it is covered by the program. It does not cover room and board or other expenses so the student or his or her family is still likely to have to borrow. The rationale is that the student would have to eat and have a place to stay whether he or she was in college or not.
TheProgressive
(1,656 posts)First I went to Junior college to save money and got an AA degree. It was less expensive
to get your general course requirements at JC than a 4-year college (room and board).
Then I went to California State University and got my degree in Computer Science. I paid
$100 per semester, plus books, and room and board. I paid my own way (worked and saved money).
This was when California used tax money to pay for the CA State University system.
The payback? I graduated and worked for employers in CA and then elsewhere, contributing to
Social Security and federal taxes and was a productive member of society - just like millions
of other graduates over the years. And, as a bonus, I started a small and profitable business.
My point: education is the foundation for our democracy and economic progress. It is an investment
in our country. Once again, America should provide 'free' education k thru BA/BS, even masters and doctorates.