The next market crash?

[Blacknbengal]

Mounting student loans a 'debt bomb' waiting to explode


It’s a vicious cycle. Many families in this country cannot afford the skyrocketing cost of higher education without student loans. But many graduates cannot find a job and cannot pay off the loans. As a result, they wind up in a much deeper hole (as the interest and collection fees accrue) with no way out.

Student loan debt in the U.S. now totals more than $1 trillion. That’s more than all the outstanding credit card debt in the country.

A recent report by the National Association of Consumer Bankruptcy Attorneys found that both students and parents are borrowing at record rates.

College seniors who graduated with student loans in 2010 owed an average of $25,250, up five percent from the previous year. Parents had an average of $34,000 in student loans for their children. The report says the number of these parental loans has jumped 75 percent since 2005-2006.

“These are enormous numbers,” says Ike Shulman, a bankruptcy attorney in San Jose, Calif. “They’re basically setting us up for having a large number of fellow citizens become economically non-functional for the rest of their adult lives.”

Current law makes it almost impossible to discharge student loan debt through bankruptcy. And unlike other unsecured debt, there is no statute of limitations on student loans. Lenders can pursue borrowers to the grave.

“It’s not fair and it needs to be corrected,” says NACBA president William Brewer. “It is a debt bomb that could cripple our society.”

It’s a problem for students and parents who co-signed loans
Dave Ingham, a disabled Vietnam veteran who lives in Minneapolis, fears he could lose his savings and his house because he co-signed student loans -- now in default -- for his son. Ingham is being sued by collectors.

His son Shannon has been unable to find work since October 2009. He’s now been diagnosed with acute anxiety disorder and depression. He’s still looking for work, but his father says the loan defaults keep him from getting hired.

“It seems that whenever he comes close to a job interview, they run a credit check, see his loan defaults and the interview does not proceed,” Ingham said at a recent telephone news conference arranged by NACBA.

http://bottomline.msnbc.msn.com/_news/2012/02/22/10469504-mounting-student-loans-a-debt-bomb-waiting-to-explode

 

[jsupop33]

Beans,...

I won't say a word.

On second thought I will...

When this Higher ED bubble hits, it is going to really hurt some folks and put some schools out of business. Repayment rates of recent graduates are about to be made public for every Title IV eligible school.

You know my position

1. Cap Student Loans
2. Force schools who increase their tuition more than CPI to justify their increases or make them ineligible for federal student aid of any sorts.
3. Take a harder stance on for-profits.

 

[Blacknbengal]

Beans,...

I won't say a word.

On second thought I will...

When this Higher ED bubble hits, it is going to really hurt some folks and put some schools out of business. Repayment rates of recent graduates are about to be made public for every Title IV eligible school.

You know my position

1. Cap Student Loans
2. Force schools who increase their tuition more than CPI to justify their increases or make them ineligible for federal student aid of any sorts.
3. Take a harder stance on for-profits.

That is why you got to get what you can now, cause it's coming. Just like the housing market crash.