Has the problem of unpaid student loans been allowed to fester so long that people have actually forgotten how much money they owe? Apparently it has.
While many outside experts have acknowledged that the collections process needed to resume at some point, they’ve warned that recent upheaval within the Education Department and student lending program could end up creating new problems for borrowers, many of whom may not realize they still owe their debts after years of not having to pay them.
There are currently more than 5 million borrowers with loans in default, who will be immediately affected by the restart. Millions more Americans are expected to fall deeply past due on their student debts in the coming months, with a large bulge in the fall.
Borrower advocates – who pays their salary?
When Obama “Federalized” ALL student loans … he created a vast new deep state bureaucracy… and more significantly, he created a defacto transitional welfare program for 18-27 year olds. They could get paid to go to beauty college. And just like COVID “loans” … they expected it all to get forgiven.
I used to have my dental work done at the university student clinic. Several years ago, one young kid told me that once she was finished her studies and went into practice, she would have to charge more because she had “loans to pay off”.
Uh, no. It doesn’t work that way, madame. You pay your immediate bills, your business expenses first. Without water, power, or rent for office space, you won’t have a clinic, let alone a job. Any staff you have want to get paid as well. Whatever’s left from that goes to your own living expenses. Anything remaining from that can go towards paying off your loans.
It certainly doesn’t appear that so-called professional schools teach their students about this.
How sad…
A student protester at Berkeley who was nearing sixty and piled up a couple BA’s maybe an MBA or something – and a huge load of debt, was complaining that she was going to be on Social Security soon – and therefore shouldn’t have to pay back her debts. She had worked odd jobs over the years.
A lifetime at Berkeley makes a person very stupid apparently…
Time to reinstitute debtor’s prisons.
“Time to reinstitute debtor’s prisons.”
Most of them already are in debtor’s prison – usually consisting of a square of blue tarp and several big cardboard boxes under an overpass, somewhere in Southern California…
And Karl Denninger has explained what to do about addressing future student loan debt crises – make student loans dischargeable in bankruptcy, as they used to be.
That would instantly make student loans nearly-impossible to get. Banks would have to swallow the debt if the student does not succeed at his / her / its studies and round-up a good-paying job and career after graduation, so “the nice lady at the bank” would become very hard to convince that most college students are worth the risk. “Well, I need a loan to take an “Angry Studies” degree at a fabulously-expensive liberal arts College five States away” – ahhh, no thank you, Sir or Madam, you’re too great a risk of non-repayment.
Student numbers would necessarily plummet; tuition fees would necessarily have to shrink a long way or Colleges would face bankruptcy; and grandiose plans for that gucci new Interpretation Centre on the Quad would necessarily end-up being shelved.
Colleges would have to return to their roots and their initial purpose of dispensing value-added post-secondary education to a much smaller cadre of much better-prepared young professionals, who are there to learn quickly before their money runs out instead of endlessly padding their degrees and protesting the latest fad. And because there would be many fewer students, politicians would stop caring about how many votes they could glean by declaring student-loan obligations cancelled.
Win – win – win!