Tuesday, July 2, 2013

Studen loans: continuing mayhem

Student loan interest rates are set to double soon (my info from WSJ hardcopy) if Congress does not take action.   To which there is an interesting backdrop of information that someone sent me.

Bank Notes: U of Phoenix, Student Loan Debt, Green Dot
Adam Rust, Bank Talk, 26 June 2013
University of Phoenix’s corporate parent reports large drop in enrollments: Apollo Group, the parent of the U of Phoenix and several other for-profit schools, says that new enrollments fell by 25 percent year-over-year.
Interesting comments from Rohit Chopra: Yesterday’s hearing at the Senate Banking Committee produced some interesting commentary on the status of student lending in the United States.
  • 81 percent of high debt undergraduate borrowers used private student loans.
  • According to the National Association of Home Builders, the share of first time home buyers in today’s market is extraordinarily low relative to historical levels, because student debt is limiting down payment capacity.
  • The American Medical Association says that high-debt burdens impact career choices of new doctors.
  • 89 percent of veteranian students graduate with more than $100,000 in debt.


PioneerPreppy said...

That bubble will burst but I still bet it will be forgiven and bailed out eventually. I still think Obummer was going to make a move that direction last year but then figured he didn't need to.

russell1200 said...

Pioneer: Depends on if his banker friends are still underwater. Remember if a bank has its loans settle out early, it can't keep kicking the can (of its loses) down the road. That is why the banks were adamantly opposed to the idea of mortgages being paid off by the government.