Slashdot Mirror
U.S. Students/Grads Carrying Over $1 Trillion In Debt
An anonymous reader writes "Time reports that American students and grads were carrying $1.08 trillion in student loan debt at the end of 2013. This compares to just $253 billion a decade earlier. Aggregate debt grew 10% in the past year alone. 'By comparison, overall debt grew just 43% in the last decade and 1.6% over the past year.' About 70% of students graduate with some amount of debt, and the average amount owed is $29,400. 'Delinquencies on student loans have risen dramatically over the past decade: 11.5 percent of graduates were at least 90 days late on paying back their loans at the end of 2013, compared with 6.2 percent delinquencies on student loans in 2003. Moreover, the Fed's figures on delinquencies hide more stark data: nearly half of all students with debt aren't currently in repayment thanks to deferments and forbearances and the fact that students are not expected to pay while they're in school.' An attached graph shows an alarming spike in delinquent loans that looks a bit like mortgage delinquencies did at the beginning of the sub-prime crisis."
The government has essentially taken over the academic loan business in order to make funds more readily available to a greater number of people seeking a college degree. The result of this easy money? Not only this debt crisis but also college tuition and fees inflated at four times the rate of cost-of-living inflation. Way to go government intervention!
But in 2005, Congress and the Bush Administration clamped down on bankruptcy filings, placing hurdles in the path of Americans trying to file and making it more difficult to discharge debts. In particular, the 2005 law made private student loan debt, like federal student loans, impossible to discharge in bankruptcy except under a difficult to meet hardship exemption.
The lead-in for this, which made it possible in the first place, was the 1999 Gramm–Leach–Bliley Act, signed by Bill Clinton, which is what allowed the merger that led to the legislation. This effectively turned credit card debt for students who shouldn't have been offered credit cards in the first place to be non-dischargable by bankruptcy (effectively turning uncollateralized loans into collateralized ones).
http://en.wikipedia.org/wiki/G...–Leach–Bliley_Act
Frankly, there's no difference between the parties; they both work for the banks.
Yeah, either go to school to get a normal job or become a Walmart or McDonald's drone working for the minimum and collecting food stamps. You and everyone else around you convince yourself that if you work hard and get a good job you can easily afford the loans. But working hard usually means that you can barely work on the side to make a living. So then you're forced to take loans out just to cover living expenses. So you work hard, bust your ass and end up with a butt load of loans and no guarantee that your hard work will produce enough income to cover the massive amount of debt you incurred. The smart thing that I've been telling my nieces and nephews is to look at college as something you do in your 20's. Go to community college on your own money and take your time. Work your way into a better school and try to get as many grants as possible. Then by the time you're 26-27 you might get into state and only have a year or so to get a bachelor's. The you can work your way into grad school. The trick is to not feel the pressure to get school over quickly and to get all of the filler stuff out of the way on your own dime. Wait until grad school to take out loans or hopefully you'll have performed well enough to earn your way through grants. It works, I have a good friend do exactly that. Zero debt. It just sucks that I never figured this out sooner.
So why isn't supply responding to the glut of money? It's had decades.
Accreditation is a legally-sanctioned cartel.
I followed a small startup school for a while in the mid 90's - they tried for years to get accreditation as college and ultimately folded because they could not get it. The education was fine, but they dared to allow students to take classes online (c.1996) which was seen as too much of a threat to the cartel.
A degree from a non-accredited school is maligned, so without a marketable service they had to go out of business.
So: "because the politicians want it that way" is the actual answer to your question.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
No kidding.
I was working at OSU (Oklahoma State University) about 4-5 years ago when the annual raises came out.[1]
The 'President', Hargis got a raise of a little over $150,000.00 a year. He was already making a 7 figure salary, while the faculty got a 2-3% raise, and the staff got none.(again, after not getting a raise for 3 years previously)
[1] I had been working there several years at this point, and still work there, but no longer(as of Feb. 09, 2014) as an OSU employee, they subcontracted out the dept. I work for(Custodial and Housekeeping) to save money, Pres. Hargis has recieved a minimum of 5% raise each year, while staff and most faculty salaries remain frozen, or 2% maximum.
When I was hired, they had to give me a raise within 2 months due to the minimum wage going up from $6.90/hr to $7.25/hr. As of the Feb. takeover, I was making $8.25/hr after almost 6 years there.(before everyone started leaving due to the 'takeover', I was only making $7.65/hr-my pay had only gone up $0.40/hr over 5+ years there. After a lot of people started leaving, they gave us remaining fools a substancial(compared to what we were used to) raise to encourage us to stay.(I got bumped from $7.65/hr to $8.25/hr then) We have been at %50 (or less) of req'd. manpower since mid-May 2013. We(OSU) just completed a several million dollar 'campus beuatification' upgrade, amid a lot of other new multi-million dollar construction projects, including the new Boone Pickens Stadium that made news(even front page on slashdot!) recently for being 'unfriendly' to scouts and media.
Down With Slashdot BETA!!! I've been around the corner and seen the oliphant; you can only abuse me from your perspecti