Obama’s Student Loan Program Is a Windfall for the Rich Study Says

[CaféAuLait]

Obama’s Student Loan Program Is a Windfall for the Rich Study Says

Jason Delisle and Alex Holt have published a paper examining the effects of Obama's new proposal and the results are not promising.

The study found that under the new IRB rules there is no extra cost in borrowing an additional dollar after a student loan debts exceed $60,000, regardless of salary.

"This is the more you borrow the more you can have forgiven," explains Delisle. "The provision doesn't really have any safeguard so that someone earning a substantial income wouldn't be disqualified from getting loan forgiveness."

For example, a law school student with $120,000 in debt and a starting salary of $65,000 might have $160,000 forgiven after 20 years.

"On the one hand you have the Obama administration talking about the spiraling cost of tuition and that they have a plan to keep tuition low and stop the growth or slow the growth, but this goes in a completely different direction," Delisle notes

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Obama

So who picks up the cost of forgiven debt?

Taxpayers? Last year the outstanding student debt reached 1 trillion dollars...

 

[waltky]

Mebbe there should be a debt limit...

Students' $1T in Debt Comes With Complaints About Lenders
10/29/12 --- It's a double-downer for student loan borrowers, who face steadily higher debt burdens and are more likely to file complaints against student loan lenders -- conclusions drawn in a comprehensive report issued by the Consumer Financial Protection Board.

In it, the CFPB says:

* Outstanding student loan debt stands at just over $1 trillion.
* Private student loan debt only accounts for about $150 billion.
* There is about $8 billion in private loans already in default on roughly 850,000 student loans.
* The CFPB has handled 2,900 private student loan complaints in less than seven months.
* The average amount of what the CFPB calls "relief amounts" from those complaints was $1,572.
* 87% of all complaints against college lenders were concentrated on just seven companies

Aside from the huge amount of cash owed by student loan borrowers, what issues are college loan consumers most upset about? The CFPB notes that they're the same issues that vex mortgage borrowers, specifically:

* Improper application of payments
* Drawn-out loan error resolutions
* The inability to reach the right lender contact to resolve a problem
* Too much paperwork
* Inability to refinance a loan or modify debt

MORE]/url]

http://www.thestreet.com/story/1175...lenders.html?puc=unitedonli&cm_ven=UNITEDONLI