Recovery threatened by student loan debt

[Nova78]

Recovery threatened by runaway student loan debt | Comcast

WASHINGTON — The federal student loan program seemed like a great idea back in 1965: Borrow to go to college now, pay it back later when you have a job.

But many borrowers these days are close to flunking out, tripped up by painful real-life lessons in math and economics.Surging above $1 trillion, U.S. student loan debt has surpassed credit card and auto-loan debt. This debt explosion jeopardizes the fragile recovery, increases the burden on taxpayers and possibly sets the stage for a new economic crisis.

With a still-wobbly jobs market, these loans are increasingly hard to pay off. Unable to find work, many students have returned to school, further driving up their indebtedness.

Average student loan debt recently topped $25,000, up 25 percent in 10 years. And the mushrooming debt has direct implications for taxpayers, since 8 in 10 of these loans are government-issued or guaranteed.

As always the taxpayer is left holding the bag, this Country is in deep -do -do ,you were lied to...........

 

[TakeAStepBack]

It's a potential catalyst.

 

[Katzndogz]

There is no recovery. Democrats have to start laying blame early for the lack of recovery so they could at least say there would have been a recovery if something else wasn't blamed.

 

[TakeAStepBack]

The "recovery", is merely the throws of attempted stabilization in markets. There is still al lot of toxicity being moved around and blanketed over in order to spur growth. It is likely short lived. Take a look at the Euro and the EU. They had this momentary "shit looks good" followed quickly by, "ooops, shit doesn't look so good afterall".

This isn't much of a partisan issue, it's a monetary one. Both sides have played along for decades. What's another bust on a bubble?

Time will tell.

 

[Nova78]

It's a potential catalyst.

Some are blind to the truth.

There are 365 days in a year, 24 hours in a day, and 60 minutes in an hour. That adds up to a total of 525,600 minutes. Divide that figure into the $3.6 trillion in FY2010 spending and you find that the federal government spends about $6.85 million per minute.

 

[waltky]

Granny says. "What do it matter? Dey not payin' their loans off as it is...

House votes to extend low rates on federal student loans
26 Apr.`12 WASHINGTON – The U.S. House approved, on a mostly party-line (215-195) vote, a $5.9 billion bill to maintain low interest rates for Stafford student loans, paying for it by slashing funds for a provision of President Obama's health care law.

Thirty Republican lawmakers voted against the bill, while 13 Democrats voted for it. The legislation was fueled by politics after President Obama this week traveled to three college campuses in battleground states attacking Republicans for paying "lip service" to the issue of rising interest rates but not acting. House Speaker John Boehner, R-Ohio, responded angrily to the accusation and said Obama was "wasting time on a fake fight" because Republicans intended to vote to protect the student loan rates before they expire in July. But the speaker's decision to move immediately to the bill ahead of a week-long congressional recess signaled concern over Republican vulnerability to the president's attack.

Unless Congress acts, the current 3.4% interest rate for Stafford loans would double on July 1. According to the most recent data for the 2010-11 school year, about 7.5 million undergraduates benefit from Stafford loans to pay for college. The Obama campaign is particularly keen on appealing to young voters this year. In 2008, he won 66% of 18- to 29-year-old voters — a percentage he would like to duplicate this year in his campaign against former Massachusetts governor Mitt Romney, the presumptive GOP presidential nominee. Both parties broadly agree that the rate should be extended for one year, but they do not agree on how to pay for it. It is a scenario that has played out repeatedly in this Congress.

Republicans would pay for the cost of the loan extension by cutting funds from the Prevention and Public Health Fund (PPHF), a $15 billion fund created under the health care law to help states and localities pay for everything from anti-obesity campaigns to cancer screenings. Congress already dipped into the fund to use $5 billion to pay for the payroll tax cut extension package earlier this year, but congressional Democrats opposed the student loan bill on Friday because they contend further cuts would undermine health care access, particularly to women. Surrounded by female lawmakers, Minority Leader Nancy Pelosi, D-Calif., on Friday called the bill a "continuation of the assault on women's health" because the fund helps provide services to women, including mammograms and pregnancy-related care. Instead, Pelosi said Congress should pay for the loan rates by eliminating tax subsidies for oil companies.

Rep. Gwen Moore, D-Wis., accused Republicans of sexism in their fiscal policies. "We are seeing the sheer gender bias in this institution against meeting women's needs," she said. On the House floor before the vote, Boehner said accusations that Republicans were trying to cut women's health was "absolutely not true" and decried the tone of the debate. "People want to politicize this because it's an election year, but, my God, do we have to fight about everything?" he said.

MORE

 

[Mr. H.]

I heard on the news that this doubling of student loan interest rates will result in an extra....

$100 per year average.

BFD

 

[waltky]

Obama's political posturing may be negated by "regulatory uncertainties"...

Student Loan Rates May Rise Regardless of Politics: Fitch
4/30/12 --- Both President Obama and Republican party standard-bearer Mitt Romney support extending low-interest rate student loans. But regardless of whether that happens, student loans could still wind up being more expensive.

Currently, political wrangling on how Congress would pay for the bill that would extend student loan rates at their present levels of 3.4% threatens to scuttle any deal. The GOP favors taking it out of the health care budget while the Democrats want to raise taxes on small business owners, or by hiking taxes on wealthy Americans. If no deal is cut, federally funded student loan rates would double to 6.8% on June 30 -- essentially a $6 billion tuition hike for financially embattled U.S. families.

Make no mistake, affordable student loan advocates aren't happy about the bickering. "Political mudslinging over the $6 billion investment has taken this critical issue hostage and threatens to saddle students with even more unnecessary debt", notes Tiffany Dena Loftin, vice president of the Washington D.C.-based United States Student Association, which represents four million students on 400 U.S. college campuses. But even if a deal is reached in Washington, there's no guarantee that college students won't be paying even more for student loans.

That's the consensus of a new white paper released by Fitch Ratings, which says that students and families may gain in the short term, but "regulatory uncertainties" may add to loan costs in the long run. "A scheduled doubling of interest rates on subsidized undergraduate Stafford student loans could create a short-term opportunity for private lenders, although Fitch Ratings believes that regulatory uncertainty with respect to the student lending business, a dwindling number of lenders in the space, and longer-term interest rate dynamics would all likely result in little response from private lenders. Left with few alternative financing sources, future undergraduate students could face higher interest rates as a result."

Fitch notes that a higher rate environment could boost private lending to college-going students and their families. If rates did pop up to 6.8%, the firm says that banks and other lenders would surely swoop in and undercut the high rate to grab a larger slice of the burgeoning student loan market.

MORE

 

[waltky]

Not Uncle Ferd - he was smart enough not to go to college...

More Than 15 Percent Still Paying Back Student Loans at Age 50, Economics Professor Says
May 4, 2012 – Many college students are not earning enough to pay back their student loans, because they choose majors that pay too little upon graduation, and 15 percent of college grads are still paying back student loans at age 50, Peter Morici, University of Maryland Economics Professor, said Thursday.

College graduates owe on average $25,000 when they finish school, Morici said, and in some cases, graduates can rack up debt close to six figures. “You know, if you go to a liberal arts college, and your family has reasonably decent means, but not enough to qualify for really substantial financial aid, you can get up close to six figures if you work at it, though it’s unusual. The bottom line is though is that graduates are not earning enough money to reasonably service their loans in many majors,” he said. “You know there’s a great span across which graduates earn money. Some may only earn say $25,000 a year. It’s very difficult to service a $25,000 loan on that and pay rent, get an automobile, get to work, and so forth,” Morici said during an appearance on C-SPAN’s “Washington Journal.”

Student loan debt has surpassed credit card debt and auto debt, according to the Federal Reserve Bank. Americans 60 and over owe $36 million, and more than 15 percent are still paying back student loans at age 50. “Absolutely, more than 15 percent are still paying back student loans at age 50. They should have long ago been retired. We have folks that are being hounded by collection agencies in their 80s. We’ve got Social Security checks being garnished. You know student loans aren’t dischargeable like other debts, like many other debts, in bankruptcy,” Morici said.

Morici said schools like NYU, Columbia University, and Princeton have large endowments so student tuition is “very heavily discounted” and their earning potential is “quite substantial.” “However, it’s the folks that go to these small liberal arts colleges where there’s not a large endowment. They can rack up very heavy debt. Often they don’t get a major that leads to something rather substantial on the other end. So there the debt is outsized because there isn’t … as much financial aid, and the student’s earning capacity is much lower,” he said.

MORE

 

[rdean]

Republicans answer is to cut funding for schools. Close those fuckers. They are all hotbeds of liberalism. Besides, according to some conservatives at the USMB, they taught themselves computer language, physics and how to read.

 

[waltky]

So in the end, do they really make more than a high school graduate?

Students lament debts as loan battle gains steam in Congress
13 May`12 – Sean Doerr, like thousands of college graduates this spring, is trapped between a rock and a hard place. To get a good job, he knew he needed a college degree. But getting it cost the 22-year-old Detroiter dearly. He graduated Thursday from the College for Creative Studies in Detroit with more than $85,000 in debt.

He's far from alone: Millions of Americans now owe more for student loans than credit cards. The loans can top $100,000 — even $200,000 — and often translate into payments of more than $1,000 a month. The debts will climb even higher if Congress can't agree to hold down interest rates on federally subsidized loans. But even if that bill passes, Doerr still faces years of college bills. "I am afraid of the payments six months from now" when he must start repaying the loans, he said.

The issue of college costs is gaining steam as a presidential campaign issue with President Obama and presumptive GOP nominee Mitt Romney talking about the issue on campuses. Obama has been hammering on the need to hold down college costs and for Congress to pass a law preventing federally backed loans from doubling their interest rates. Romney has echoed the same concerns, differing only on the federal government's role.

The average student debt load tops $25,000 in the U.S., while the job market for recent graduates continues to struggle. More than 95 U.S. colleges report that their 2010 graduates — the most recent data available — owed on average more than $35,000, and 73 colleges reported that more than 90% of the 2010 class had student loan debt, according to an analysis by the nonprofit Institute for College Access & Success' Project on Student Debt.

That has some economists worrying that federal student loans could become the nation's next huge financial crisis, like the mortgage bubble that plunged the U.S. into a recession from which it's still recovering. It also worries many parents, educators and experts that the huge burden of student debt is putting a college education out of reach for many families.

The Federal Reserve Bank of New York estimates 37 million Americans have student loan debt, totaling $870 billion. Bankruptcies are on the rise, with 81% of bankruptcy attorneys reporting more clients with student debts in the past few years. "I look at the loans my daughter is taking out, and I've got to wonder what it's going to be like when my son, who is in eighth grade, gets there," said Tony Pollack, 55, of Detroit, whose daughter is a sophomore at Grand Valley State University. "We can't help them out — they've got to shoulder all that cost and get so many debts."

A Democratic bill under debate in Congress would extend the current 3.4% interest rate on subsidized Stafford loans for another year. The rates will grow to 6.8% without congressional action. because a 2007 law that gradually lowered the rates expires July 1. While those loans cap the amount of money students can borrow, private loans are available for any amount.

Debt load jumps

 

[Stephanie]

Republicans answer is to cut funding for schools. Close those fuckers. They are all hotbeds of liberalism. Besides, according to some conservatives at the USMB, they taught themselves computer language, physics and how to read.

all made up bull in your head

 

[Mad Scientist]

Republicans answer is to cut funding for schools. Close those fuckers. They are all hotbeds of liberalism. Besides, according to some conservatives at the USMB, they taught themselves computer language, physics and how to read.

My Mother and Father taught me how to read. I taught myself the computer programing I know.

Never took a Physics class though.

Plenty of people learn these things without being disadvantaged or held back by Public Schooling.

 

[waltky]

Not a good economy to be graduating into...

Student debt, lack of well-paying jobs delays independence for new grads
May 20,`12 (UPI) -- The sheepskin may be on the wall, but today's college graduates could have a long way to go before achieving independence from mom and dad.

A recent survey by Kelton for eHealthinsurance last month found nearly half of college students and recent grads are afraid they won't be able to pay off their student loans and nearly two-thirds are afraid they won't even be able to find a job, let alone a job in their chosen field. The survey, which queried 255 people April 13-23 online, found college students think they need an average annual salary of $81,600 to be financially independent while parents put the figure at $54,000. However, the survey found, the average salary for newly minted grads is $21,900.

With student debt now eclipsing credit-card debt as consumers' biggest liability, junior may be bunking with mom and dad a lot longer than initially planned. Last year, students graduated with an average $24,000 in loan debt and the burden will get worse if Congress doesn't act to keep interest rates from doubling July 1. Moody's Investors Service recently noted college tuition is "at a tipping point" and college administrators increasingly are realizing they need to find ways to make education more affordable. "Schools are very good at adding new things, new programs," Sherideen S. Stoll, vice president for finance and administration at Bowling Green State University in Ohio, recently told The New York Times. "We are not so good at looking at things we have been doing for 20 or 30 years and saying, 'Should we be offering those academic programs?'"

Why are college costs so high? The Times blames increased campus amenities, upscale food service, frequent sabbaticals for professors, the need to stay on top of technology and healthcare -- education being labor-intensive means a large number of employees. Also to blame: top-heavy administrations and enormous compensation packages for top administrators.

The Chronicle of Higher Education listed former banker Gordon Gee, Ohio State University's chief executive, as the highest paid public university administrator in 2011 at $1.32 million plus benefits, followed by Francisco Cigarroa of the University of Texas system at $750,000 and William Powers Jr. at the University of Texas-Austin at $746,738. Rounding out the top five were Mary Sue Coleman at the University of Michigan system at $728,504 and Michael Young at the University of Utah at $723,595. "Students and their parents who are struggling, not just with coming up with the money, but paying off the debt, I think there is a disconnect between what they are being asked to do and what they are seeing the leader of the university doing," Dale Butland of the non-profit research group Innovation Ohio told the Times.

Read more: Student debt, lack of well-paying jobs delays independence for new grads - UPI.com

 

[editec]

Want an instant BOOM to the economy?

Absolve all educational debtors.

That would take $1 trillion off the debit side of THE PEOPLE'S balance sheet.


What about the BANKSTERS to whom all this debt is owed?


Hell, folks! do what we always did for them when their DERIVATIVE loans blew up in their faces -- print up more money and give it to them!

 

[starcraftzzz]

There is no recovery. Democrats have to start laying blame early for the lack of recovery so they could at least say there would have been a recovery if something else wasn't blamed.

So according to you adding 200,000jobs a month GDP growing at 2%, unemployment falling from 10 to 8% and GDP being above where it was at before the recession is not a recovery. You are a retard

 

[starcraftzzz]

Republicans answer is to cut funding for schools. Close those fuckers. They are all hotbeds of liberalism. Besides, according to some conservatives at the USMB, they taught themselves computer language, physics and how to read.

all made up bull in your head

Yes history and reality is totally just in the head
I’d LOL but I don’t LOL at people like you being dumber then bricks

 

[EdwardBaiamonte]

There is no recovery. Democrats have to start laying blame early for the lack of recovery so they could at least say there would have been a recovery if something else wasn't blamed.

So according to you adding 200,000jobs a month GDP growing at 2%, unemployment falling from 10 to 8% and GDP being above where it was at before the recession is not a recovery. You are a retard

its not. Krugman calls it a depression!! Unemployment is 12% if you count the workforce that existed under Bush

 

[iamwhatiseem]

Recovery threatened by runaway student loan debt | Comcast

WASHINGTON — The federal student loan program seemed like a great idea back in 1965: Borrow to go to college now, pay it back later when you have a job.

But many borrowers these days are close to flunking out, tripped up by painful real-life lessons in math and economics.Surging above $1 trillion, U.S. student loan debt has surpassed credit card and auto-loan debt. This debt explosion jeopardizes the fragile recovery, increases the burden on taxpayers and possibly sets the stage for a new economic crisis.

With a still-wobbly jobs market, these loans are increasingly hard to pay off. Unable to find work, many students have returned to school, further driving up their indebtedness.

Average student loan debt recently topped $25,000, up 25 percent in 10 years. And the mushrooming debt has direct implications for taxpayers, since 8 in 10 of these loans are government-issued or guaranteed.

As always the taxpayer is left holding the bag, this Country is in deep -do -do ,you were lied to...........

Just another reason showing how big government programs in America are always, always a bad idea.
In 1975 - the total cost of a 4 year degree was about 30% of the average annual household income. Enter GIANT government programs and grants - and whalah - the annual cost of a 4 year degree is 67% of the annual household income. More than double in comparison to income.

 

[EdwardBaiamonte]

Recovery threatened by runaway student loan debt | Comcast

WASHINGTON — The federal student loan program seemed like a great idea back in 1965: Borrow to go to college now, pay it back later when you have a job.

But many borrowers these days are close to flunking out, tripped up by painful real-life lessons in math and economics.Surging above $1 trillion, U.S. student loan debt has surpassed credit card and auto-loan debt. This debt explosion jeopardizes the fragile recovery, increases the burden on taxpayers and possibly sets the stage for a new economic crisis.

With a still-wobbly jobs market, these loans are increasingly hard to pay off. Unable to find work, many students have returned to school, further driving up their indebtedness.

Average student loan debt recently topped $25,000, up 25 percent in 10 years. And the mushrooming debt has direct implications for taxpayers, since 8 in 10 of these loans are government-issued or guaranteed.

As always the taxpayer is left holding the bag, this Country is in deep -do -do ,you were lied to...........

Just another reason showing how big government programs in America are always, always a bad idea.
In 1975 - the total cost of a 4 year degree was about 30% of the average annual household income. Enter GIANT government programs and grants - and whalah - the annual cost of a 4 year degree is 67% of the annual household income. More than double in comparison to income.

not sure but what I read says that as liberal bleeding hearts have made loans easier and easier that has made it easier and easier for colleges to raised tuition, room and board.

Once again the free market was best, while the liberal market appeared best to simple minded bleeding heart liberals.