[OPINION] The Real Student-Debt Crisis

"If you’re reading this, 'college' may connote a very expensive, four-year residential institution where one comes of age, acquires what one hopes will become an impressive lifelong credential and a network of useful friends, and learns at least something of the liberal arts," Nicholas Lemann writes in an opinion piece for The New Yorker.

"Because élites have a thumb on the scale of public discourse, discussions of student debt too often assume that it’s acquired at private liberal-arts institutions. In fact, the main drivers of student debt—which has recently risen to the attention-getting sum of a trillion dollars—are the rapid growth of for-profit, mostly online education institutions, where ninety per cent of students take on debt, completion rates are low, and default rates are high; substantial cuts by state legislatures in their support for public universities; and the stubborn fact that, for most people, going to college continues to pay off economically, effectively doubling lifetime earnings. ...

If people choose to exit from the higher-cost model rather than to stay and complain, then 'college,' notionally, will become more like the actual colleges that most American students attend. There’s something to be said, then, for complaining about rising costs at this small fraction of institutions: it’s emotionally satisfying, and it preserves a small and valuable part of the system."

NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 Via: NASFAA

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[CARTOON] Student Loans

Via: California Political Review

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Government Urging 25% of U.S. Workforce to Strive for Student Loan Forgiveness

(CNSNews.com) - There's no student loan forgiveness program for mothers who raise their own children, but there is for some daycare workers; And student loan forgiveness may be yours if you work for the government in some capacity, but not if you earn a low salary in the private sector.

The federal Consumer Financial Protection Bureau (CFPB) is trying to make it easier for people in certain jobs -- teachers, nurses, social workers, police and firefighters, and federal, state and local government workers -- to understand the route to student loan forgiveness.

On Wednesday, the CFPB released a "toolkit" to "empower" school districts and other public service organizations to help their employees understand how they can pay off their student loans or have them forgiven. That toolkit asks employers to pledge that they will talk to their workers about student debt, help them understand their options, and assist them in enrolling in student-loan repayment benefits. 

Richmond Public Schools in Virginia and the City of South Bend, Indiana, are the first public employers to sign the pledge.

Up to a quarter of the U.S. workforce is in public service and may be eligible for existing student loan debt-forgiveness programs, the CFPB said. 

Via: CNS News

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WASHINGTON PROPOSES $1 TRILLION BAILOUT FOR DELINQUENT STUDENT LOANS

A possible $1 trillion bailout is coming—and soon.

America’s now-nationalized student loan industry just reached a value of $1 trillion, according to Citigroup, growing at a 20 percent-per-year pace. Since President Obama nationalized the industry (a tacked-on provision of the Obamacare bill), tuition has gone up 25 percent and the three-year default rate is at a record 13.4 percent.

Ron discussed this problem last night with Larry Kudlow:

With many young people unable to pay their loans (average graduating debt is about $29,000), Citigroup and others are speculating that this industry might be ripe for a bailout.

To pay off all the current defaults, Citigroup says it would cost taxpayers $74 billion. However, this number doesn’t include those who will default in the coming years, and, when the government rewards the defaulters, it will encourage more borrowers not to pay their debts.

And liberals in Congress have proposed forgiving all student loans via “The Student Loan Forgiveness Act 2012,” costing taxpayers $1 trillion.

Adding another $1 trillion dollars to the national debt isn’t exactly “forgiveness” for young people—it’s prolonging the payoff. In fact, student loan bailouts are a catch-22 for young people because they’re going to be held accountable for paying off the national debt and interest payments.

A student loan bailout will also be rewarding higher education bureaucrats for a diminished product. A college degree used to mean that a person would add on average $1 million to their income over their lifetime. Today a college degree only guarantees an average $300,000 in added income over a lifetime.

The answer isn’t a bailout. The student loan industry must to be returned to the private sector. Would a private lender ever invest $100,000 of their money in a student that had no plan? No.

It’s not about limiting access to college; it’s about making sure students have a well-thought out plan for their future before investors put a $100,000 stake in their education. College should be about specializing in a trade rather than defaulting to general studies that won’t lead to a job.

A civics education is important, but why would an employer hire someone with no applicable work skills, especially in a slow economy?

If we wish to end the incentives for bailouts, we need to hit higher education in the purse. Endless government money and bailouts won’t get our students jobs, and it won’t fix the problem.

Ron Meyer is the press secretary and a spokesman for American Majority Action. Celia Bigelow is the Campus Director for the same organization. Learn more at AmericanMajorityAction.org.

Via: Breitbart

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THE BIG FAIL: Obama Claims To Have Made College More Affordable, ButStudent Loan Debt Continues To Burden Grads Under His Watch

ACCORDING TO A NEW REPORT, THE AVERAGE STUDENT LOAN DEBT FOR THE CLASS OF 2011 HAS INCREASED YET AGAIN TO $26,600

Two-Thirds Of Graduates From The Class Of 2011 Have Student Loan Debt, With An Average Of $26,600, An Increase Of Five Percent From Last Year. “We estimate that two-thirds (66%) of college seniors who graduated in 2011 had student loan debt, with an average of $26,600 for those with loans. The five percent increase in average debt at the national level is similar to the average annual increase over the past few years. (“Student Debt And The Class Of 2011,” The Institute For College & Success, 10/12)

• “It’s The Latest Snapshot Of The Growing Burden Of Student Debt And It’s Another Discouraging One.” It’s the latest snapshot of the growing burden of student debt and it’s another discouraging one: Two-thirds of the national college class of 2011 finished school with loan debt, and those who borrowed walked off the graduation stage owing on average $26,600 – up about 5 percent from the class before.” (Justin Pope, “Average Debt Up Again For New College Grads,” The Associated Press, 10/18/12)

“Ohio Students Who Borrowed For College And Earned A Bachelor’s Degree In 2011 Graduated With An Average Of $28,683 In Student-Loan Debt.” “Ohio students who borrowed for college and earned a bachelor’s degree in 2011 graduated with an average of $28,683 in student-loan debt, which ranked seventh highest in the nation for the second year in a row, a new report finds.” (Encarnacion Pyle, “College Debt Of New Ohio Graduates Rises 3.5%,” Columbus Dispatch, 10/18/12)

• That’s “8 Percent Higher Than The National Average Of $26,600 And A 3.5 Percent Increase Over What Ohio Students Who Graduated In 2010 Owed.”“That’s nearly 8 percent higher than the national average of $26,600 and a 3.5 percent increase over what Ohio students who graduated in 2010 owed on average, according to the report by the Project on Student Debt.” (Encarnacion Pyle, “College Debt Of New Ohio Graduates Rises 3.5%,” Columbus Dispatch, 10/18/12)

• “And Like The Previous Year, 68 Percent Of The State’s 2011 Graduates Left School With At Least Some Student-Loan Debt.” (Encarnacion Pyle, “College Debt Of New Ohio Graduates Rises 3.5%,” Columbus Dispatch, 10/18/12)

New Hampshire Has The Highest Student Loan Debt, With An Average Of More Than $32,000 Per Student, While Pennsylvania Is Second With An Average Of $30,000 Per Student. CNBC’s SCOTT COHN: “Much of the debt is concentrated here in the northeast. Connecticut is the fifth highest debt totaling nearly $28,000. Rhode Island is fourth at just over $28,000 per graduate. Number three is Minnesota with more than 70% of the graduates there in debt, averaging just under $29,000 and Pennsylvania average student debt is just under $30,000, and the most indebted state is New Hampshire, with more than $32,000 in average student debt. Three-quarters of the graduates in New Hampshire have student loans.” (CNBC, 10/18/12)

Via: GOP.com

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