The government has created this crisis with its “do everything for everybody and get re-elected mentality”. With the government guarantee of these student loans, their influence on the banking system to lend without caring about repayment, colleges and universities raised their fees exponentially to get their share of the cash cow. Students have a right to be angry at themselves for falling for the liberal tactics that will wed them to the big government cause for the rest of their lives. Unless they can miraculously somehow recover some sense of self worth, they will never be able to truly be free of this overreaching oppressive Democrat hegemony.
Excerpt: As college students graduate into one of the most depressed job markets in years with more debt than ever, it’s no wonder so many of them have become delinquent on their loans. As many as 1 in 4 borrowers was carrying a past-due student loan balance in the third quarter, higher even than the Federal Reserve Bank of New York had previously thought.
Borrowers who are temporarily exempt from making payments for one reason or the other are excluded from the figures. If included, the Fed says the number of borrowers with past-due balances would jump to 27 percent of the total. The total amount of outstanding balances that are late would rise to 21 percent. Both figures are about double the unadjusted rates.
When it comes to private, non-guaranteed student loans, the default rate seems to be a bit lower. Moody’s Investors Service recently reported that the default rate for such loans in the fourth quarter was 5.1 percent. However, that rate double what it was before the most recent recession. Furthermore, the Moody’s report noted that some private student loan measures indicated the pace of defaults is rising. “High unemployment will keep defaults high,” the report said.
Economists vary on how the strain of student loans will impact the broader economy, but Federal Reserve Chairman Ben Bernanke said recently that “student loans are becoming a very large category of loans.” The Fed put the latest outstanding student loan balance at $870 billion. Meanwhile, credit card debt in the U.S. totaled $693 billion, according to the same report, and car loan debt totaled $730 billion.
Read full The Blaze article here.