Colleges have no skin in the loan game. College loans are guaranteed by the government. The loans are far too easy to get and parents can get snared too with Parent Plus loans. Our student loan program is despicable and deliberately aimed and burdening people with loans they can’t afford, which are then securitized so Wall Street parasites can make money off someone else’s pain. In a sweet touch for the banksters, the loans are not dischargeable by bankruptcy. Yes, personal responsibility is always important and one should not borrow what they can’t pay back. But unlike other loans, these loans are not vetted to make sure the borrower can repay it – and that is quite purposeful.
A joint examination by ProPublica and The Chronicle of Higher Education has found that Plus loans can sometimes hurt the very families they are intended to help: The loans are both remarkably easy to get and nearly impossible to get out from under for families who’ve overreached.
Student loan defaults could hurt the economy. Default rates on college loans have been rising for five years in a row.
Student loans outstanding now exceeds $1 trillion. The faltering economy means many are seeking retraining and taking out federal loans to do so.
Bursting our next bubble: The expanding student loan debt crisis. For college loans made in 2005 “41 percent of the borrowers faced the consequences of delinquency or default.” 2005 was before the real estate bubble burst, bringing down the economy with it. Presumably the problem loan rate is much higher now.
Congress and our pretend regulators in DC have done nothing about this, presumably because they are in thrall to Wall Street maggots who make fat profits off riskless loans. Well, the loans are riskless until massive defaults occur. Then Wall Street will come whimpering to Washington saying they need a bailout because who could have possibly predicted this could happen.