STUDENT LOAN DEFAULTS ARE ON THE INCREASE, AS STUDENT EMPLOYMENT HOPES DIM

Student loan defaults are rising fast, according to figures released this week by the U.S. Department of Education. While much of the press coverage focused on defaults by students attending for-profit schools, defaults at state colleges and universities went up, too. The bad job market is a big factor: Unemployment in 2010 was 10.1 percent for people between the age of 25 to 34, and those numbers are even higher when you remove people above the age of 30. At the same time, state budget cuts to higher education have led to big tuition hikes at many public colleges. California students graduated from public colleges with the least debt in the country in 2009, but tuition jumped 18 percent last year for in-state students in California and double-digit increases are projected for the next several years, as well.

COMMENTARY:   I originally researched the Student Loan Bubble in a blog post dated December 22, 2010, and was appalled at the amount of college loan debt many college graduates had accumulated upon graduation.   Many colleges and universities, both public and private, have increased tuition rates in order to avoid drastic budget cuts as a result of the Great Recession.  So long as the unemployment rate continues to remain high, and college graduates are unable to find good paying jobs, student loan defaults will increase. 

FinAid prepared this perpetual Student Loan Debt Clock.  This clock reports an estimate of current student loan debt outstanding, including both federal and private student loans.

This student loan debt clock is intended for entertainment purposes only. The actual total debt outstanding demonstrates more volatility at the beginning of each semester, when most student loans are disbursed. (Most colleges are required to disburse federal education loans in two installments per period of enrollment.) 

 

Courtesy of an article dated September 16, 2011 appearing in Stateline

Comments

[debt management]

These numbers make me sick to my stomach. I really hope who ever takes office next year finds some solution to the debt and job crisis that is going on right now. I graduated four years ago and I have yet to find a single job to live off of. I have to work a full time job, then go and work a night shift in order to make it by. Paying 80,000 in schooling to have to have to deal with this makes me cry. I am almost regretting that I even went to college.