No high fives here, however:
Bankruptcy lawyers have a frightening message for America: They’re seeing the telltale signs of a student loan debt bubble that is placing increased financial pressure on families struggling with their children’s mounting debt. According to a recent survey by the National Association of Consumer Bankruptcy Attorneys, more than 80 percent of bankruptcy lawyers have seen a substantial increase in the number of clients seeking relief from student loans in recent years.
In most cases, those clients could not meet the federal hardship standards that are necessary to discharge a student loan through bankruptcy proceedings. Instead, many of these parents or guardians who co-signed the student loans face the prospect of losing their life savings, cars or homes to collection agencies for aggressive private lenders.
The amount of student borrowing skyrocketed from $100 billion in 2010 to $867 billion last year — or more than the $704 billion in outstanding U.S. credit card debt, according to the Federal Reserve Bank of New York. Of the 37 million borrowers who have outstanding student loan balances as of third-quarter 2011, 14.4 percent have at least one past-due student loan account. Together, these balances come to $85 billion, or roughly 10 percent of the total outstanding student loan balance.
College seniors who graduated with student loans individually owed an average of $25,250, up 5 percent from the previous year, according to a study by Brewer’s group. Parents are responsible, on average, for $34,000 in student loans, a figure that rises to about $50,000 over a standard 10-year repayment period. An estimated 17 percent of parents whose children graduated in 2010 took out loans, a 5.6 percent increase from 1992 and 1993.
A report last year by the Pew Research Center and the Chronicle of Higher Education warned that public anxiety over college costs is at an all-time high. Moreover, “low income college graduates or those burdened by student loan debt are questioning the value of their degrees,” saying the cost of college has delayed other life decisions, the report said.
But of course the people at the USDOE and the NYCDOE are going to begin tracking both schools and individual teachers on college attendance and readiness, so the point of whether college is good or not for individual students right out of high school is moot.
College For All is good for the bankers - and that's what matters these days
Until people start going belly-up on their students loans.
Not to worry, though - there's a government bailout waiting at the end of the line for the banksters.
As for the Millenium Generation, there's a shackle and chain waiting to be tied around their legs for the rest of their lives as they consistently have to go back to college to be "re-trained" for the latest technology advances and compete for employment in an economy that is increasingly rigged against them:
Stef Gray, a Hunter College graduate from New York who has paid $300 in forbearance fees to the company since May, organized the petition drive in hopes of persuading Sallie Mae to drop the fee, just as Bank of America and other financial institutions dropped unpopular fees in the face of Internet protests.
Gray, 23, who lives in Brooklyn, has become a symbol of the plight of young Americans saddled with debt. With both her parents deceased, Gray has put herself through school with part-time jobs and three private loans with Sallie Mae.
Since graduating in May with a master’s degree in geographic information systems, Gray has been unable to find full-time employment. Instead, she says, she has gotten by with temporary jobs and waitressing. Without a steady income, she says, it has been impossible to make the $700 monthly payments on her $40,000 in loans. Nor has she been able to consolidate the loans or negotiate more favorable terms with Sallie Mae.
Every time she deferred a payment on the three loans, Sallie Mae slapped her with a $50 forbearance fee for each loan — a total of $150.
“That may not sound like a lot of money to some,” she said. “But for me, with no parents, struggling to get by without a job and not receiving any unemployment, that’s a lot of money.” Because of the compounding effect of the interest rate on the unpaid portion of her loan and related penalties, Gray says, her original $40,000 loan has grown to $65,000. “The interest is snowballing,” she said.
Morning in Obama's America.
Going to be one bad day for a long time to come...