Student Loan Defaults On The Rise

[Hissyspit]

http://www.washingtonpost.com/wp-dyn/content/article/2006/09/23/AR2006092300047.html

Lesson for Students: The Best Debt Is None

By Michelle Singletary
Sunday, September 24, 2006; F01

We're told over and over again that student loans are good debt. The conventional wisdom says that, like a home loan, student loan debt will turn into an asset. But what happens when it doesn't turn out that way? What happens when people take on tens of thousands of dollars in loans that may take decades to pay off?

Increasingly, they fall behind on their loans or default. The U.S. Department of Education recently reported that the national default rate on federal student loans rose slightly, to 5.1 percent, in 2004, the latest statistics available, from the previous year's record low of 4.5 percent. The default rate represents the percentage of borrowers who began repaying their loans between Oct. 1, 2003, and Sept. 30, 2004, and who defaulted before Sept. 30, 2005.

Although the default rate is low compared with the all-time high of 22.4 percent set 14 years ago, the latest increase is still a signal that shouldn't be ignored. Since the 1990s, the number of students who graduate with more than $25,000 in loan debt has tripled, according to the student Public Interest Research Groups, which along with several state student associations last year launched the Student Debt Alert project ( http://www.studentdebtalert.org/ ).

The rising student loan levels are so troubling, it's time we stop saying this is good debt.

- snip -

Sinking in debt, borrowers want to know their options. They look deflated when I tell them: Pay it as originally agreed over 10 years and live below your means, or stretch the payments over as long as 30 years. And no, bankruptcy is not an option. If you have a federal student loan, it can't be discharged in bankruptcy. If you have a private student loan, it's still not a viable option unless you can prove that paying it would result in "undue hardship," a test that is nearly impossible to meet.

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[StellaBlue]

1. My $40,000 over 25 years is currently on forbearance

due to "financial hardship" - at $500 in interest per 6-month forbearance.

I can't find a job paying more than $12 an hour, and I've got two part-time ones of that description, both with the same state agency, but, thus, with NO BENEFITS! Wheeeeeeeee!

It's a GREAT time to be young. Just fucking great. (I am 27 and have a masters degree.)

[rsmith6621]

2. This Is A Sign Of ..........

A Growing Economy.........:sarcasm: :sarcasm: :sarcasm:


Thom Hartman says the economy is going to experience some turbulent times sometime after the election but before Christmasand continuing in to the long term....

[lonestarnot]

3. Everything that is rotten in Denmark is on the rise!

Been to the grocery store lately? Even the damn e coli bacteria has been hiked!