Student loan debt growing and so is the delinquency rate

According to the Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit Total, consumer debt in the U.S. fell again in the third quarter. This figure has been falling for four years. As consumer debt has been falling, so have consumers’ delinquency rates. As of Sept. 30, 8.9 percent of outstanding household debt was in some stage of delinquency, with 6.6 percent at least 90 days late.

 

 

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Student loan defaults continue to grow and the worst is yet to come

graduates

The student loan default rate for fiscal 2009 surged to 8.8%, up from 7% in 2008.

Two years ago critics warned that government-backed student loan defaults would rise.  The question was how soon would taxpayers feel the pain.  This month, the U.S. Department of Education provided part of the answer when it reported that the default rate for fiscal 2009 surged to 8.8%, up from 7% in 2008.

 

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Growing Student Loan Debt Weighs Heavier on Graduates

StudentLoanDebt

College loans will top a trillion dollars.

More students will be going to college this and more of these students will borrow money to do so.  Student loan debt will likely top a trillion dollars this year.  And for the first time last year student loan debt outpaced credit card debt.

 

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With the Rising Cost of Tuition More Colleges Offering Grants, Work-study to Reduce Student Debt

SaveWorkStudy

Students rally to “save work study” at the “Protect Our Future” rally.

In a nod to the rising cost of college tuition and the burden of massive student loan debt on graduates, a growing number of universities are stepping up with “no-loan” aid pledges. 

More than 50 colleges — including elite private schools and flagship state universities in Virginia and Maryland — have eliminated or capped loans in their financial aid portfolios for some or all students, promising enough aid in grants and work-study to cover most of the gap between what they charge and what each student can afford to pay.

 

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Government Takeover of the Student Loan System

College fund

If the Senate approves the  final piece of legislation, millions of students will get their federal loans directly from the Department of Education

“Government takeover!” So yelled the many critics of President Barack Obama’s health care reform bill. But in their focus on the main event, Republicans seem to have all but ignored another part of the legislation that more precisely fits their rhetoric. In addition to securing the President a victory on health care, the House bill took him one step closer to delivering on a promise to reform the college-student-loan system. If a final piece of legislation before the Senate is approved, millions of students will get their federal loans directly from the Department of Education. In other words, the federal government would sweep aside private competitors in the biggest change to the federal student-loan program since its creation in 1965. It’s a legitimate government takeover.

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