Over 40% Of Federal Student Loan Recipients Aren’t Making Payments On Their Debts

Shocking Statistic: Over 40% Of Student Borrowers Don’t Make Payments – Zero Hedge

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Over 40 percent of those in student loan programs have stopped making payments. Many borrowers have never made any payments.

The department of education (a useless body that I would eliminate in one second if given the chance), cannot figure out why this is happening.

“We obviously have not cracked that nut but we want to keep working on it,” said Ted Mitchell, the Education Department’s under secretary.

The Wall Street Journal reports More Than 40% of Student Borrowers Aren’t Making Payments.
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More than 40% of Americans who borrowed from the government’s main student-loan program aren’t making payments or are behind on more than $200 billion owed, raising worries that millions of them may never repay.

While most have since left school and joined the workforce, 43% of the roughly 22 million Americans with federal student loans weren’t making payments as of Jan. 1, according to a quarterly snapshot of the Education Department’s $1.2 trillion student-loan portfolio.

About 1 in 6 borrowers, or 3.6 million, were in default on $56 billion in student debt, meaning they had gone at least a year without making a payment. Three million more owing roughly $66 billion were at least a month behind.

Meantime, another three million owing almost $110 billion were in “forbearance” or “deferment,” meaning they had received permission to temporarily halt payments due to a financial emergency, such as unemployment. The figures exclude borrowers still in school and those with government-guaranteed private loans.

Navient Corp., which services student loans and offers payment plans tied to income, says it attempts to reach each borrower on average 230 to 300 times – through letters, emails, calls and text messages – in the year leading up to his or her default. Ninety percent of those borrowers, which include federal borrowers as well as those who hold private loans, never respond and more than half never make a single payment before they default, the company says.

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Crisis Easy to Explain

Carlo Salerno, an economist who studies higher education and has consulted for the private student-lending industry, noted that the government imposes virtually no credit checks on borrowers, requires no cosigners and doesn’t screen people for their preparedness for college-level course work. “On what planet does a financing vehicle with those kinds of terms and those kinds of performance metrics make sense,” he said.

I could easily come up with numerous reasons off the top of my head.
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1. Being in the workforce and having a job are two different things.

2. Having a job and making enough money to pay back hundreds of thousands of dollars is yet another thing.

3. Some feel cheated by the system, as well they should.

4. Many have figured out the consequences of default are small. The worst that can happen is wage garnishment. Should that happen, one can always find another low-paying job, buying time until they are discovered again.

5. Some never intended to pay back the loans in the first place. To those borrowers, it’s all free money for a few years. They will stay in school as long as they can. If by some miracle they actually graduate (or are kicked out), they never make a payment.

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Blame Bush!

A large portion of the blame for this mess goes to George W. Bush. Seriously.

The Bankruptcy Abuse Prevention and Consumer Protection Act enacted April 20, 2005 made it much more difficult to discharge debts in bankruptcy.

Among other things, “BAPCPA amended the law to broaden the types of educational (“student”) loans that cannot be discharged in bankruptcy absent proof of “undue hardship.” The nature of the lender became irrelevant. Even loans from “for-profit” or “non-governmental” entities are not dischargeable.

The Deflation Guarantee Act of 2005

I predicted this mess when Bush signed the bill. As proof, I offer The Deflation Guarantee Act of 2005.

Here are my lead paragraphs as I wrote them at the time.
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Today Congress passed the “The Deflation Guarantee Act of 2005” currently known as the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005”. Twenty years from now economists are going to be studying legislation from this Congress and signed by this administration and be wondering: “What the * were they thinking?”.

Consumer Protection Act? LMAO

Anytime this administration passes a law with the “protection” in it, assume it will do just the opposite.

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Student Debt Highly Deflationary

I have wanted to refer back to that post on numerous occasions.

I had not done so previously because I strongly dislike my writing style in those days. I frequently used chat room talk like “LMAO” (laughing my ass off), in those early posts.

There are other aspects of my 2005 post that I dislike as well. However, I nailed the idea correctly. Student debt is a hugely deflationary force.

In the wake of that act (albeit with a bit of a delay), we saw massive amounts of seemingly reckless lending to students. Because of government guarantees, lenders did not give a damn who they lent to.

For profit universities flourished. Abuses at the University of Phoenix became rampant. And because of various lending programs that followed, education costs soared as well.

Those debts cannot be paid back, and household formation has gone into reverse. Students moved back home after graduation, and attitudes on debt have changed.

These are all debt deflation forces.

Modest Fee Request

The Department of Education will no doubt waste millions of taxpayer dollars studying this issue, only to come up with the wrong answers because students will lie.

Will anyone realistically admit “I never intended to pay back these loans”?

My modest fee for this analysis is a mere $250,000. Of that amount, I pledge $249,999.99 to the Khan Academy.

All I ask is a penny for my thoughts, saving taxpayers countless millions in useless department of education studies.

For more on the Khan Academy please see Teaching Revolution: Online, Accredited, Free; Start Learning Now!

Obama’s Role

President Obama does not escape criticism for his efforts to fuel the problem.

Here’s my blast at Obama: For Profit Schools Turn Students Into Debt Zombies; It’s Time To Kill The Entire Pell Grant Program.

There is plenty of blame to go around, but I have not seen a single person take this crisis back to the logical origin, the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” making student debt non-dischargeable in bankruptcy.

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Black Woman Gets In White Student’s Face Over His Dreadlocks (Video)

Woman Gets In White Student’s Face For Having Dreadlocks – Daily Caller

A video allegedly showing a woman at San Francisco State University verbally badgering a student for “cultural appropriation” has gone viral after being posted on YouTube Monday evening.
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The woman can be heard telling the student, a white male, he can’t wear dreadlocks because “it’s [her] culture” and threatens to cut them off with scissors. The woman is identified in the YouTube as a “campus employee.”

After the student attempts to extricate himself from the woman’s grasp – “you have no right to tell me what I can wear on my head… stop touching me” – she pulls him back and says, “if you put your hands on me, you’re gonna learn.”

At the end of the video, she asks the cameraman “why are you filming this?” and shoves the lens after he responds, “for everyone’s safety.”

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Connecticut High School Student Pledges Allegiance To ISIS – Feds Investigating

Student Says ‘ISIS’ In Pledge, Gets Pulled From High School – WTNH

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A 15-year-old high school student in Ansonia is under federal investigation for comments he made during class.

In a statement to News 8, the Ansonia Police Department said that; “The allegation is that the male was allegedly making pro-ISIS statements during the Pledge of Allegiance.”

Ansonia High School officials alerted police who passed the incident report on to the Department of Homeland Security. New Haven Civil Rights Attorney John Williams called the whole situation a shame.

“This is in my view exactly what the terrorists want,” Williams said. “They want to scare us so much that we become crazy and turn on each other.”

The Ansonia Superintendent of Schools also declined an on-camera interview, but released a statement that reads in part; “ …we did not deem the incident a legitimate threat to the safety of students or staff. Out of an abundance of caution, the incident was reported to the appropriate authorities. As far as the Ansonia Public Schools is concerned, the matter is resolved.”

The 15 year-old student is now at an alternative school. Williams – who is not involved in this case – calls this a clear violation of the student’s First Amendment rights to free speech. He said the teenager is being punished for the content of his words.

“It’s pure speech. Not like the proverbial shouting fire in a crowded theater. No harm to anybody, except to himself, because he looks silly.”

According to the minutes from the school board meeting, the student’s mother calls the decision to investigate her son “irrational and impulsive.”

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*VIDEOS* Young America’s Foundation – National Conservative Student Conference 2015


MIKE LEE


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NEWT GINGRICH

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TOM COTTON

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DINESH D’SOUZA

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BURT FOLSOM

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DANIEL HANNAN

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WALTER E. WILLIAMS

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MARK LEVIN

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Click HERE to visit the official website of the Young America’s Foundation

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University Of Arkansas Student Arrested After Making False Sexual Assault Allegation

U Of A Student Arrested For Lying About Sexual Assault – Arkansas Matters

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Police arrested 20-year-old Lindsey Sweetin Thursday for filing a false police report about a sexual assault she originally said happened in the Harmon Parking garage on the University of Arkansas campus.

According to a police report, on March 8, Sweetin’s brother called the University of Arkansas Police Department to report that his sister had been sexually assaulted in the garage on March 5.

When police interviewed Lindsey Sweetin, she told them when she was walking back to her car in the deck after class, a man she described as being between 50 and 60-years-old with gray hair approached her and asked if she had any jumper cables.

Sweetin told officers she told the man she couldn’t help, and at that point she said the man “grabbed her and put his hand up her shirt, and then pulled her towards him and put his other hand down her pants and touched her buttocks” and then the man “pushed her against the back of her car and put his hand down the front of her pants, touching her vagina.” Sweetin told officers she sprayed the man with pepper spray and got in her car and drove away.

After the interview, police reviewed video footage from the Harmon Parking Garage during the time that Sweetin said the incident happened. Detectives did not find any men in the video matching the description Sweetin provided them. Detectives also spoke to potential witnesses who were in the garage at that time, and they told officers they did not hear or see anything out of the ordinary.

On March 11, Detective Josh Bowen interviewed Sweetin again at UAPD. Detective Bowen asked Sweetin if she was telling the truth about the incident, and Sweetin said no. When asked why she would lie, Sweetin said she did see a man that matched the description she gave on Dickson Street and he scared her, but that the man never followed her into the Harmon deck.

Sweetin told Detective Bowen she had texted her boyfriend about seeing a man that scared her, and that her boyfriend made a suggestion that something more might have happened, and then the boyfriend told Sweetin’s brother. Police say Sweetin said the story just got worse from there and she “continued to go along with it because she did not know what else to do.”

Sweetin was arrested for Filing a False Police Report, which is a Class D Felony.

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*VIDEO* Senator Ted Cruz Speaks At The National Conservative Student Conference


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