Student loan debt has increased exponentially, along with?
government student loans.
From the linked to Investors Business Daily editorial:
From 2006 to today, total student loan debt soared from $517 billion to $1.3 trillion, a 152% jump, to fund surging tuition costs. Over that very same period, real starting wages for school grads were essentially flat.
So, should the cost of something goes up, as well as the ability to pay for it stays the same = problem.
Sure, a college degree has some value.
Which is why people borrow so much money to get one.
The Onion cites a report by the National Education Association:
A study published Wednesday through the National Education Association has determined that the four-year college education is still a better investment of the time and money than spending the exact same duration chained to a radiator in a very dank, unlit basement.
It is tough for new graduates to obtain jobs with sufficient income to settle student loan debt, well, what about the parents, and, even grand parents, who signed up for student loan debt?
Natalie Kitroeff? of the Bloomberg website has an article on the education loan debt crisis for elderly people:
Twenty-seven percent of education loans held by people age 65-74 were in default in 2013, meaning they hadn\’t designed a payment in 270 days or higher. More than half of education loans held by people 75 and older were in arrears. And the government can garnish wages or suspend tax refunds for anybody who fails to pay their education loans, but it has an extra tool with regards to senior citizens: taking money out of their Social Security payments. In 2013, 155,000 seniors lost component of their retirement benefit to repay education debt, up from 31,000 in 2002, in line with the GAO. \”There\’s no statute of limitations, so these refinancing options go with you to your death,\” says John Rao, legal counsel with the National Consumer Law Center, a buyer rights nonprofit. \”That makes it different for an individual who is elderly who might think at a certain point in their life they can be immune from collections.\”
As wonderful co-signers, they think they will never have to pay, your child who gets the degree will pay, whether the kid signed to your student loan debt or not.
But how come the government making these large loans to people in their late 50s, and older?
How do they really think they will get that cash back?
For many, it is more likely they will end up like the homeless guy inside the picture above, than that they\’re going to timely repay the student loan debt.
From 2001 to 2007, Murphy took out 12 Parent PLUS loans originally worth $220,765. Like those made instantly to students, Parent PLUS loans are federally backed and extremely hard to discharge-that is, to be forgiven. The whole outstanding education loans held by people 65 and older, including debt that financed their unique schooling and their children\’s, grew to $18.2?billion in 2013, the modern year available from the U.S. Government Accountability Office (GAO), from $2.8?billion in 2005. That\’s doubly fast as the overall increase student debt. The number of borrowers age 60 and up has increased to 2.2?million, from 700,000 in 2005, as per the Federal Reserve Bank of New York.
A big mess, getting bigger.
As Investor’s Business Daily said:
Paying for college education isn\’t too imperative that you be left to the market. The fact is, college education is too important to stay to an incompetent, overweening federal government\’s incessant meddling.