We're All Paying for Student Loan Defaults and the Incredible Cost of U.S. Higher Education

[xchrom]

http://www.alternet.org/education/were-all-paying-student-loan-defaults-and-incredible-cost-us-higher-education



Parents are increasingly struggling to repay federal loans they've taken out to help cover their children's college costs, according to newly released federal data.

The Parent Plus program allows parents to take out essentially uncapped amounts to cover college costs, regardless of the borrower's income or ability to repay the loan. As the cost of college has risen, the program has become an increasingly critical workaround for families that max out on federal student loans and can't pay the rest out of pocket.

Education Department officials have long said that they simply don't have figures on how many of the loans were in default. But the agency has finally run some numbers. The data shows that default rates, while still modest, have nearly tripled over the last four years. About five percent of loans originated in fiscal year 2010 were in default three years later. The default rate at for-profit colleges is much higher, at 13 percent.

Overall, there is about $62 billion in outstanding debt from Parent Plus, according to the new data. The average Parent Plus loan borrower owes about $20,300. The Education Department compiled the numbers at the request of a government committee that is working on new rules for the program.

[AcertainLiz]

1. Indeed

It forces people to either become essentially debt slaves or do other things to avoid such a fate such as joining the military or what not. I'm doing the latter to avoid huge student debt for example.

The yoke that student debt has on our society is quite large...

[daleanime]

2. K&R....

[BainsBane]

3. It is very hard to get out of paying student loans

Even if you enter bankruptcy, they still get their money back. The last people you want to screw with are the student loan lenders. They will fuck you up.

[exboyfil]

4. Just got my daughters financial aid letter

from Iowa State. My expected family contribution is 40% of my take home after state and federal taxes and social security. My daughter did get $4,500 in merit scholarships. Fortunately she will only have to be on campus 2 1/2 years because of her college coursework in high school (a lot of which I have already paid for). She also got a really good summer internship as well.

I wonder about parents who have not prepared for this eventuality.

[kelliekat44]

5. And such great "higher education" either. nt