KissMy
Free Breast Exam
2 out of 5 student loans are delinquent while university cost climb twice the rate of inflation, faster than health-care or any other segment of the economy. 63% of student borrowers can't make their student loan payments on time. Some university's get 87% of their revenue from Government backed student loans. This money does not all go to education, it funds student debit cards that can buy anything. Students are using the money to live the good life buying Beer, Pizza, Shoes, High Fashion Clothes, Cars, Gas, Jewelery, etc. This is a $1 Trillion subsidy to liberal professors & the unemployed.
CNBC: Price of Admission
NYT: Loan Study on Students Goes Beyond Default Rates
CNBC: Price of Admission
College costs that are rising at twice the rate of inflation, CNBC investigates a system that encourages widespread borrowing—often with little regard to a student's ability to pay, leaving the average college graduate with tens of thousands of dollars in student-loan debt. How long can the system be sustained? Are student loans the next subprime mortgages? And if the bubble bursts, who will pay the price?
NYT: Loan Study on Students Goes Beyond Default Rates
For each student who defaults on a loan, at least two more fall behind in payments on their student debt, a new study has found.
The Institute for Higher Education Policy, a nonprofit organization, said in a report that two out of five student loan borrowers were delinquent at some point in the first five years after they started repaying their loans.
Almost a quarter of the borrowers used an option to postpone payments to avoid delinquency.
“We want to get beyond the dichotomy of people who default on their loans and everyone else,” Alisa Cunningham, The study, based on data from five of the nation’s largest student-loan agencies, found that only 37 percent of student borrowers who started repaying their loans in 2005 were able to fully pay them back on time.
And that percentage is probably decreasing, given the high unemployment rate of recent years, Ms. Cunningham said.
With tuition rising more rapidly than inflation or family incomes, student borrowing has been growing. College seniors who graduated in 2009 had an average of $24,000 in student loan debt, up 6 percent from 2008, according to an annual report from the Project on Student Debt.
Mark Kantrowitz, the publisher of Finaid.org and Fastweb.com, estimates total student debt at about $896 billion — more than the nation’s credit-card debt.
Meanwhile, default rates have been rising, to 7 percent, for the 2008 fiscal year, the latest period for which data is available, from 5.2 percent in the 2006 fiscal year. Students who did not graduate were more likely to become deliquent or default.
According to the new study, the majority of student borrowers at both two- and four-year for-profit schools went into deliquency or default. The majority of student borrowers at community colleges also went into delinquency or default. But because community college tuition is far lower than that of for-profit institutions, most community-college students do not take out loans.