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Just days after reports emerged that student loan defaults are soaring, which is undoubtedly due to some combination of, among other things, poor job prospects for the millions of snowflakes who graduate each year with their $200,000 educations in anthropology and the moral hazard created by liberal politicians constantly calling for student debts to be ‘forgiven’ (a.k.a. forcefully jammed down the throats of taxpayers), the Trump administration has revoked rules put in place by Obama that barred student debt collectors from charging penalty fees on past-due loans.
Originating from the Department of Justice, the “Dear Colleague” letter (full letter included at end of post) says that Obama’s unilateral rules implemented in 2015 could have “benefited from public input”…but what good is being King if you can’t unilaterally force new laws on the masses? Per the Washington Post:
H/t reader squodgy:
“And so it ends.
This could go pear shaped if parents guaranteed the loans.”
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This will surely end well!
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The Department of Education recently released a memo admitting that repayment rates on student loans have been grossly exaggerated. Data from 99.8% of schools across the country has been manipulated to cover up growing problems with the $1.3 trillion in outstanding student loans. New calculations show that more than half of all borrowers from 1,000 different institutions have defaulted on or not paid back a single dollar of their loans over the last seven years.
Joining the ranks of “broke lawyers” who can cancel their student debt, “Americans with disabilities have a right to student loan relief,” now according to Ted Mitchell, the undersecretary of education, said in a statement. Almost 400,000 student loan borrowers will now have an easier path to a debt bailout as Obama primes the populist voting pump just in time for the elections.
The Department of Education will send letters to 387,000 people they’ve identified as being eligible for a total and permanent disability discharge, a designation that allows federal student loan borrowers who can’t work because of a disability to have their loans forgiven. The borrowers identified by the Department won’t have to go through the typical application process for receiving a disability discharge, which requires sending in documented proof of their disability. Instead, the borrower will simply have to sign and return the completed application enclosed in the letter.
Over 40 percent of those in student loan programs have stopped making payments. Many borrowers have never made any payments.
The department of education (a useless body that I would eliminate in one second if given the chance), cannot figure out why this is happening.
“We obviously have not cracked that nut but we want to keep working on it,” said Ted Mitchell, the Education Department’s under secretary.
The Wall Street Journal reports More Than 40% of Student Borrowers Aren’t Making Payments.
Hot off the presses, the US government just published its audited financial statements this morning, signed and sealed by Treasury Secretary Jack Lew.
These reports are intended provide an accurate accounting of government finances, just like any big corporation would do.
And once again, the US government’s financial condition has declined significantly from the previous year.
– 7 Million People Haven’t Made A Single Student Loan Payment In At Least A Year (ZeroHedge, Aug 22, 2015):
Perhaps it’s all the talk about across-the-board debt forgiveness or maybe the total amount of outstanding student debt has simply grown so large ($1.3 trillion) that even those with no conception of how much money that actually is realize that it’s simply never going to paid back so there’s no point worrying about, but whatever the case, the general level of concern regarding America’s student debt bubble doesn’t seem to be at all commensurate with the size of the problem.
And it’s not just the sheer size of the debt pile that’s worrisome. There’s also the knock-on effects, such as delayed household formation and the attendant downward pressure on the homeownership rate, and of course hyperinflation in the rental market.
– “Staggering” Student Loan Defaults On Deck: 27% Of Students Are A Month Behind On Their Payments (ZeroHedge, April 15, 2015):
A new St. Louis Fed study finds that the delinquency rate for student borrowers in repayment is 27.3%, meaning nearly one in three of the Americans laboring under a debt load that has now swelled to $1.3 trillion are more than a month behind on their payments. Ackman says there’s “no way they are going to pay it back.” We can hear the “cancel the debt” cries now.
– Every young person should see the Fed’s startling numbers on student debt (Sovereign Man, March 30, 2015):
What I’m about to tell you is not my own opinion or even analysis. It’s original data that comes from the United States Federal Reserve and national credit bureaus.
- 40 million Americans are now in debt because of their university education, and on average borrowers have four loans with a total balance of $29,000.
- According to the Fed, “Student loans have the highest delinquency rate of any form of household credit, having surpassed credit cards in 2012.”
- Since 2010, student debt has been the second largest category of personal debt, just after a home mortgage.
- The delinquency rate for student loans is now hovering near an all-time high since they started collecting data 12 years ago.
- Only 37% of total students loan balances are currently in repayment and not delinquent.
The rest—nearly 2 out of 3—are either behind on payments, in all-out default, or have entered some sort of deferral program to delay making payments, with a small percentage still in school.
It’s pretty obvious that this is a giant, unsustainable bubble (more on this below). But even more important are the personal implications.
– Next Mega-Bailout On Deck: White House Studying “New Bankruptcy Options” For Student-Loan Borrowers (ZeroHedge, March 10, 2015):
It appears that just as the administration is finally figuring out what HFT is, it also decided to take a look at the charts above and has made a decision: the next bailout is about to be unveiled, and it will involve a “streamlined” bankruptcy law allowing students to discharge their student debt.
– 18 Sobering Facts About The Unprecedented Student Loan Debt Crisis In The United States (The American Dream, Oct 7, 2014):
The student loan debt bubble in America is spiraling out of control, and it is financially crippling an entire generation of young Americans. At this point, the grand total of student loan debt in the United States has reached a staggering 1.2 trillion dollars, and an all-time record high 40 million Americans are currently paying off student loan debts. Just when our young people should be planning on buying homes and starting families, they find themselves financially paralyzed by oppressive levels of debt. What makes all of this even worse is that only some of our college graduates are able to get the “good jobs” that we promised them. So with limited job prospects and suffocating levels of debt, this generation of young Americans is increasingly putting off major life commitments such as buying a home and getting married. As a society, we really need to rethink how we are “educating” our young people, because what we are doing now is clearly not working. The following are 18 sobering facts about the unprecedented student loan debt crisis in the United States…