America's students have defaulted on $76 billion in government loan debt, and the Department of Education is now paying more than $1.4 billion a year to debt collectors. That startling fact brought to us by the NYTimes's Gail Collins. She quotes one collector who gloats, "if you wait long enough, you catch people when their guard's down," after he'd garnished "the savings of a disabled carpenter."
But don't worry guys, Congress is on it. The House is holding hearings, led by Rep. Virginia Foxx, an NC Republican best-known for announcing that she has "little tolerance for people" with huge student loan debt.
The Senate is also holding hearings, and these may be a bit more effective. Democrat Al Franken and Republican Charles Grassley have co-sponsored a bill requiring all colleges to tell students little details like how much in loan repayments they'll have to make per month.
Meanwhile Obama has been trying to get colleges to voluntarily provide cost and loan info to all students. So far 100 schools have signed up to this scheme. Leaving just 3,900 of America's colleges to go.
We need to STOP the free for all that is student loans. People are getting hundreds of thousands of dollars in loans to get 2 year degrees and these for profit schools target people for all this 'free money'. There needs to be more strings attached. Students need to realize that floating around for two years only to choose a liberal arts, communications, or art history degree is not what the govt loans are for. The loans are for the student to get a higher education so they are better prepared for life, not so they can go to a 4 year resort and come out with a degree that is worthless.
@PuroChorizo361 Not only the poor, but our veterans as well. These for profit schools have to have at least 20% of their student body not pay with federal student loans and veterans count as part of the 20% because they get VA loans.
What should be done about spiraling student loan debt?
By the government, nothing. By the borrowers and lenders, work it out.
For future reference; Lenders, don't make a loan if the borrower is likely not to repay it. Loaning money for a liberal arts degree isn't good business. Borrowers, taking any loan involves risk. Know what you're getting into before you sign the papers.
guaranteed student loans are an enigma. the banks loan the money for no other reason than the federal gov't. said that if the students are unable to pay it off for any reason, then the government will. they said that they'd pay it, they should pay it and stop complaining so much. if there's not enough money for them to live up to their word, then they should strip it from some entitlement such as corporate welfare, or the war budget.
Not all student loans are government backed.(My kid's aren't.)
IMO government backed student loans are just another area that the government has no business being involved in. It's another well intentioned, socialistic government program that's going to further burden the tax payers.
dances-weebles @Thunderchicken that's what tax money is for... helping the citizens.
Our tax money is for running the government. Backing student loans isn't really part of running the government. And even if it were, we're out of money and have resorted to counterfeiting. We simply cannot afford to fund things like student loans.
@Thunderchicken we can better afford to pay student loans than we can afford to fund the war budget and corporate welfare. if the money were stripped from those two things, then there's be enough to pay everyone's medical needs in full,+ education.
if that isn't enough money, they tax the 'romneys' and 'buffetts' of the nation down to middle class, sell off their expensive cars and mansions and strip all their offshore bank accounts to -0- and give that money to education and medicine and feeding the poor.
let's show them how good it feels to be philanthropic for a change.
I,ll admit Bush spent alot of money, 9-11 two wars drug benefits for seniors Im sure you could name more but the sub prime mortgage problem started brewing long before Bush. In fact he raised a red flag about it.
No one seems to be mentioning another part of the "debt crisis", that being some individual responsibility. If you decide to get your masters degree in Ancient Cultures & Dead Languages from some high priced private school, don't b*tch about all your debt. We also need to recognize that some kids just aren't made to go to school. Instead of pushing everyone to college, how about these guidance counselors actually provide some guidance to kids and recommend career paths that are better suited to their skill set. Tech schools cost alot less than a university....