In mid-2015, 17% of student loans hadn’t been paid in a year

Arsenal Bolt: Quick updates on the news stories we’re following.

arsenal-bolt-logo

“School-Loan Reckoning: 7 Million Are in Default” – The Wall Street Journal, August 21, 2015:

Nearly 7 million Americans have gone at least a year without making a payment on their federal student loans, a high level of default that suggests a widening swath of households are unable or unwilling to pay back their school debt.

As of July, 6.9 million Americans with student loans hadn’t sent a payment to the government in at least 360 days, quarterly data from the Education Department showed this past week. That was up 6%, or 400,000 borrowers, from a year earlier.

That translates into about 17% of all borrowers with federal loans being severely delinquent, a share that would be even higher if borrowers currently in school who aren’t yet required to repay were excluded. Millions of other borrowers are months behind but haven’t hit the 360-day threshold that the government defines as a default.

 
There are 40 million Americans with some outstanding student debt.

Unlike credit card, auto, mortgage and other personal debts, student debts are rarely dischargeable in a personal bankruptcy.

This unusual exception to U.S. bankruptcy law was implemented as part of the so-called “Bankruptcy Abuse Prevention and Consumer Protection Act” passed in 2005. Lenders lobbied Congress heavily for the law’s passage.

In the 10 years since that law’s creation, the share of bachelor’s degree holders with student debt after graduation rose from 64% to 71%. This potentially exposes even more young people to personal debt crises they cannot discharge.

Another key issue in U.S. student debt is how much of it has come from “for-profit” colleges, diploma mills and shady online universities. In fact, 10 of the 20 institutions that generate the most student debt fall under one or more of those categories.

They represent about 19% of the total 2014 student debt load. That is all the more astounding as they account for only 9% of the total U.S. student body. Evidently, the cost of enrolling at these institutions is high, but the payoff for graduates is low or zero.

This post was produced in conjunction with The Globalist Research Center.

Oct 14, 2015 – Arsenal For Democracy Ep. 146

Posted by Bill on behalf of the team.

AFD-logo-470

Topics: How the Reagan Revolution influenced the American Left; the US airstrike on a hospital in Kunduz Afghanistan; Perkins Loans end. People: Bill, Kelley, Nate. Produced: October 11th, 2015.

Episode 146 (54 min):
AFD 146

Discussion Points:

– Generational Politics: How the Reagan Revolution influenced the American Left
– The US blew up a hospital in Afghanistan. What now?
– Why was the Perkins Loan program allowed to expire?

Related Links

AFD: “Getting trapped in Reagan’s ideological framing”
France24: “Aid workers killed in US air strike on Afghan hospital”
AFD by Kelley: “Perkins Loan program expires after 57 year run”

Subscribe

RSS Feed: Arsenal for Democracy Feedburner
iTunes Store Link: “Arsenal for Democracy by Bill Humphrey”

And don’t forget to check out The Digitized Ramblings of an 8-Bit Animal, the video game blog of our announcer, Justin.

Bernie Sanders proposes cutting public college tuition in half

Sanders-021507-18335- 0004Public college tuition could be cut in half by diverting defense spending, increasing state investment, and making other reforms to student lending, according to a proposal by Senate Budget Committee Ranking Member Bernie Sanders (I-VT) presented at the University of Iowa this week as he explores a presidential run.

The budget proposed by President Barack Obama includes $38 billion more for the Pentagon’s base budget. Republicans in Congress want even more in a military budget that is higher than the next nine countries combined. Sanders instead would put half the amount requested for extra military funding, about $18 billion, into higher education grants to states. With state matching funds, tuitions at public universities and colleges could be cut in half, according to Sanders, the ranking member of the Senate Budget Committee.

Sanders also called for a major overhaul of federal student loans. The Congressional Budget Office has projected that the Department of Education will reap $127 billion in profits over 10 years from rising interest charges for college students and their families.

“We must end the practice of the government making billions in profits from student loans taken out by low and moderate income families. That is extremely regressive public policy,” Sanders said. “It also makes no sense that students and their parents are forced to pay interest rates for higher education loans that are much higher than they pay for car loans or housing mortgages.”

 
Senator Sanders’ prepared remarks and citations are available here.

It’s an ambitious proposal by the feckless standards to which we have grown accustomed, but it’s still far short of proposals for zero-tuition public colleges. My radio co-host Nate and I discussed the latter concept at length on a recent episode of our show. Listen below:

Part 1 – Free College – AFD 115

A thought on student debt

He’s my “Thoughtpinion” of the day: It’s criminally irresponsible to be pushing massive, undefaultable loans to 17 and 18 year olds. Due to underdeveloped decision-making and judgment brain centers, we don’t trust them to drink, we barely trust some of them to vote, and we (as a society) more or less don’t trust them to be having sex — let alone to start families. Why? Because these are big decisions with potentially huge and permanent consequences.

But let’s have them sign giant loans they might not be able to repay so they can go to a school they can’t afford to attend because it was well marketed to them? That’s a decision we trust them to weigh?

And then when they get there, all the vulture scammy credit card deals — often backed by the school — help these teens get hooked into unrepayable consumer debt cycles for life.

Later they will be told it was their fault for being so irresponsible and for making bad choices. At age 18.

AFD 55 – College Costs

Latest Episode:
“AFD 55 – College Costs”
Posted: Tues, 03 September 2013

Bill and Persephone critique President Obama’s proposed reforms to the cost of higher education. Then we discuss three military cases involving death penalty level crimes and the related issue of anti-Muslim attitudes in the U.S. Finally we look at the shocking number of squirrel-related power failures and what that says about America’s infrastructure.

Additional links referenced:

http://www.theguardian.com/commentisfree/2013/aug/31/barack-obama-jay-leno-muslim-universal-rights

http://www.theglobalist.com/passing-up-a-golden-opportunity/

http://www.npr.org/2013/08/14/210620446/10-years-after-the-blackout-how-has-the-power-grid-changed

http://www.theglobalist.com/doubling-down-on-wind-ireland-greens-its-grid-looks-to-export/

http://energyblog.nationalgeographic.com/2013/07/09/as-u-s-plans-7-billion-effort-to-electrify-africa-it-faces-challenges-at-home/