- And the data suggests that many popular perceptions of student debt are incorrect. The huge run-up in loans and the subsequent spike in defaults have not been driven by $100,000 debts incurred by students at expensive private colleges like N.Y.U.
They are driven by $8,000 loans at for-profit colleges and, to a lesser extent, community colleges. Borrowing for both of these has become far more common in recent years.Mr. Looney and Mr. Yannelis estimate that 75 percent of the increase in default between 2004 and 2011 can be explained by the surge in the number of borrowers at those institutions.
The whole "for-profit University" thing is such a frustrating and rage-inducing mess. I can hardly believe we allow it to happen. I know far too many people who are throwing their life away (in the form of debt bondage) to places like this. It's so infuriating. I wish I had answers... for now I just have disillusionment and frustration.
Here's the answer. 1) Repeal the 1978 bankruptcy reform act such that student loans can once again be discharged under personal bankruptcy. 2) Remove the federal guarantee for student loans such that the government no longer backs all public student loan debt 100%. 3) Rescind the ability for the Department of Education from selling student loan debt to predatory collections agencies. Tighten up credit and loosen up the ability to get out of debt and lo and behold, it gets harder to get a loan. Lo and behold, fewer colleges tap the easy money. Lo and behold, less people scrabbling for worthless diplomas that will get them nowhere and as a consequence, less worthless diplomas required to get a job that doesn't require much over high school anyway.
Should be noted that 1. Sallie Mae is entirely private now. 2. USA doesn't back private student loan debt (e.g. Sallie Mae loans). 3. DOE doesn't buy private loans. They just buy the servicing of public loans. 4. ECASLA shit is just old. It doesn't affect new loans since, like 2010. System is goofy but not anywhere near as goofy as the infographic suggests. And it's really only goofy in the same way mortgages are: people decided they need college educations, so the government had to create a ton of regulation to get people that shit!
Wait what? That seems insanely long. When you say average wage are you talking across all disciplines or whatever your industry may be? You might already know about unbury.us but it's a very useful tool for student loan repayment estimation.
I used the calculator at MoneySavingExpert, I have one loan on the old system at ~£22,000, assuming I earn £25,000 (which I do not expect to earn at all, but hey it would be nice) it estimates it will take 16 years and 6 months. My new loan to cover this year of teacher training is ~£17,000, but because of the different rules for the new system it estimates repayment in 16 years and 4 months. I have no idea if it tries to pay them both off at the same time or not, in the UK it's automatically deducted from income so I will have to start earning and find out! I hope it doesn't though, as that would be two 9%'s coming off of my paycheck.