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The burden of paying for college is wreaking havoc on the finances of an unexpected demographic: senior citizens.

New research from the Federal Reserve Bank of New York shows that Americans 60 and older still owe about $36 billion in student loans, providing a rare window into the dynamics of student debt. More than 10 percent of those loans are delinquent. As a result, consumer advocates say, it is not uncommon for Social Security checks to be garnished or for debt collectors to harass borrowers in their 80s over student loans that are decades old.
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“A student loan can be a debt that’s kind of like a ball and chain that you can drag to the grave,” said William E. Brewer, president of the National Association of Consumer Bankruptcy Attorneys. “You can unhook it when they lay you in the coffin.”
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Seems to me just another ponzi operation in itsel

timo wrote:I went to a large, midwest public university, was awarded a small music scholarship, Pell grant, and worked abhout 20 hrs per week to provide some spending money, but the secret was actually, and oddly, the student loans i took out to finance the entire endeavor.

smiley wrote:I think Universities should be honest in telling potential students what their actual chances are, in finding a job in a field, or even restrict the number of enrollments accordingly.

Millions of college students could be in for a shock this summer when the interest rate on a popular federally subsidized student loan doubles unless Congress acts.

College students on Tuesday delivered more than 130,000 letters to congressional leaders asking them to stop rates from increasing from 3.4 to 6.8 percent. The rate hike affects new subsidized Stafford loans, which are issued to low and middle income undergraduates. They hope to raise enough awareness to get Congress to stop it.

Sen. Jack Reed, D-R.I., and Rep. Joe Courtney, D-Conn., who spoke at the press conference, said it doesn't make sense for student loan recipients to face a higher interest rate than homeowners are getting on mortgages or that banks are able to get. The two back legislation that would keep the lower rate, but both acknowledged that in the political climate, it will be challenging to get the legislation passed by the July deadline.

“While overall growth in student indebtedness is troubling, the most pressing concern is private student loans which are being aggressively promoted by the for-profit college industry. Forty-two percent of for-profit college students had private loans in 2008 – up from just 12% in 2003. The for-profit college business model relies on steering students toward private loans and, as a result, many students are pushed into private loans when they are still eligible for federal loans – even when the lender knows they are likely to default. “

For the past decade, private student loans have been the fastest growing and most profitable part of the student loan industry. The interest rates and fees on private loans can be as onerous as credit cards. There are reports of private loans with interest rates of at least 15% and higher rates are not unheard of. This can place a tremendous burden on student borrowers with private loans and unlike federal student loans, there is no government-imposed loan limit on private loans and no public regulation over the terms and cost of these loans.

Durbin’s Fairness for Struggling Students Act would help address the looming student debt crisis by restoring a pre-2005 provision in the bankruptcy code allowing for discharge of privately-issued student loans – like other forms of private debt, including credit cards – in bankruptcy. Before changes were made to the bankruptcy code in 2005, only government issued or guaranteed student loans were protected during bankruptcy. This protection had been in place since 1978 and was intended to safeguard federal investments in higher education. Restoring this provision would once again make important relief available to students who are being crushed by overwhelming private student loan debt.

rangerone314 wrote:Faced with an untenable situation, a graduate with a useful degree could just leave the US and seek work overseas, and say "bye bye citizenship" and "bye bye debt".

radon wrote:

rangerone314 wrote:Faced with an untenable situation, a graduate with a useful degree could just leave the US and seek work overseas, and say "bye bye citizenship" and "bye bye debt".

Wouldn't that be criminal offence followed by extradition.

EnergyUnlimited wrote:

radon wrote:

rangerone314 wrote:Faced with an untenable situation, a graduate with a useful degree could just leave the US and seek work overseas, and say "bye bye citizenship" and "bye bye debt".

Wouldn't that be criminal offence followed by extradition.

He would have to carefully select new state to live in.
PRC?

If Quebec students noisily protesting hikes in tuition-fee hikes feel mistreated, they should look south of the border.

Aggregate student debt in the United States posted a spectacular jump in 2011 and now stands at $1-trillion (U.S.), or about 7 per cent of GDP, according to the U.S. Consumer Financial Protection Bureau.

The average outstanding student loan balance in the third quarter of last year was $23,000, according to the New York Fed.

Using these and other stats, Pierre Lapointe of Brockhouse Cooper argues that this student-debt explosion will result in a lower home-ownership rate south of the border.

U.S. college tuition costs have ballooned by a cumulative 57 per cent between 2001 and now, whereas average weekly earnings for 25 to 34 year olds fell by 7 per cent, he says.

“If wages are barely growing in real terms, it is no wonder that 27 per cent of all student loans are currently delinquent,” he writes.

A feeble employment outlook and sky-high student loans for an entire segment of the population will translate into less money flowing into home-ownership, he says in a recent report.