Sunday, February 05, 2017 by Daniel Barker
America’s student loan crisis has grown far worse than anyone has been willing to admit – at least until now.
On January 13, the U.S. Department of Education released a memo stating that the agency’s previously published statistics regarding student loans were inaccurate and that repayment rates had been exaggerated for 99.8 percent of the colleges and trade schools listed.
The most recent calculations reveal that more than 50 percent of loan recipients from 1,000 different lending institutions have either defaulted or not made any of their payments over the last seven years. (RELATED: Read Collapse.news for coverage of the coming economic collapse.)
More than 44 million Americans have student loan debt and the total in outstanding loans has now reached $1.3 trillion.
The new figures completely contradict those provided only recently by the Department of Education, proving that the government cannot be trusted to tell the truth regarding the extent of the student loan fiasco – a crisis that places a serious burden on a large segment of the U.S. economy.
From CBN News:
“Large-scale non-payment of student loans has broader economic implications. Defaults can have long-lasting ramifications, as student loan debt generally cannot be discharged through bankruptcy. Without massive forgiveness programs or some other means of useful debt relief, a significant segment of an entire generation may be pushed to the economic sidelines — unable to afford a home and provide a market for starter homes, unwilling to start families under such an economic burden, and incapable of saving enough for their retirement.”
Some experts are comparing the potential economic effects of the student loan crisis to those of the foreclosure crisis of 2008 and 2009. During that period, roughly one in ten homeowners were 90 days delinquent on their mortgage payments. Today, the overall delinquency rate for student loans is more than 11 percent and has been that way for more than four years.
“Imagine if we were told that, year after year, more than one in ten homeowners simply weren’t making payments in the midst of an economic expansion. It would be deemed an unsustainable disaster. And yet, that’s what we’re seeing with student loans right now.”
What many people do not recognize is the fact that student loans are a major contributing factor to spiraling tuition costs. Over the past two decades, the average cost for four years tuition at a public college jumped more than 200 percent. Colleges are able to continue hiking tuition costs because they know the government will continue to make loans easily available. (RELATED: Find more news about the rigged system at RIGGED.news.)
Under Donald Trump, no one is expecting sweeping changes to the system, but he has promised an end to the “student loans scam” that he blames squarely on the federal government. His stance on student loan payments and forgiveness programs seems to be more liberal than many of his Republican colleagues, but his specific plans for dealing with the issue are not yet clear.
Many observers, including President Trump himself, believe that the most effective solution is the creation of more U.S. jobs, as there is certainly no easy, quick-fix for the crisis as it stands.
As long as a college education costs more than what a student can pay for working a part-time job – something that was once possible until “huge sums of money were handed out to anyone with a pulse” (as Shaun Bradley of Anti-Media put it), subsequently driving up the price of tuition – there will continue to be an issue with student loan debt in America.
Perhaps the concept of a taxpayer-funded free college education isn’t such a bad idea after all, compared to what we have now. At least it would theoretically cut out all the loan sharks in the middle.