What percent of Gradplus Loans are being repaid? OUr borrowing problem laid bare

The new legislation has capped grad loans at $200k, which wouldn't cover specialties like med and Law schools that run 300-400k

The interest is fixed at 9% so the lender still makes money... IF the loans are repaid. Unfortunately, 25% of student loans will be in default

There are also no clear numbers - whether they're being used for non education related items (like going wild on a corporate credit card) or being taken out by people who overwhelmingly don't finish school

• The outstanding federal student loan balance is $1.693 trillion; 42.7 million student borrowers have federal loan debt.
• Federal student loan debt represents 92.2% of all student loan debt; 7.79% of student loan debt is private, including $29.3 billion in refinance loans.
• • More than 5 million borrowers haven't made a monthly payment in over 360 days and are considered in default.
  • Another 4 million borrowers are in late-stage delinquency (91-180 days late).
  • The Department of Education estimates that almost 25% of the federal student loan portfolio will be in default soon.

Capping it will be a wake up call to those who don't take loans seriously and get knee deep in them because everyone's doing it. Also need to add actual penalties for those who play the keeping up with joneses game while not paying back massive amounts of student loans.

 

Forever student syndrome showing no end in sight

 

Love it. The sheer entitlement of so many leftists.

U.S. Department of Education to Begin Federal Student Loan Collections, Other Actions to Help Borrowers Get Back into Repayment | U.S. Department of Education

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” said U.S. Secretary of Education Linda McMahon. “The Biden Administration misled borrowers: the executive branch does not have the constitutional authority to wipe debt away, nor do the loan balances simply disappear. Hundreds of billions have already been transferred to taxpayers. Going forward, the Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment—both for the sake of their own financial health and our nation’s economic outlook.”

Later this summer, FSA will send required notices beginning administrative wage garnishment.

The Department will also authorize guaranty agencies that they may begin involuntary collections activities on loans under the Federal Family Education Loan Program. All FSA collection activities are required under the Higher Education Act and conducted only after student and parent borrowers have been provided sufficient notice and opportunity to repay their loans under the law.