More than 40% of U.S. students aren't making payments on their student loans!

More Than 40% of Student Borrowers Aren’t Making Payments

New figure raises worries that millions of them may never repay more than $200 billion owed

More than 40% of Americans who borrowed from the government’s main student-loan program aren’t making payments or are behind on more than $200 billion owed, raising worries that millions of them may never repay.

The new figures represent the fallout of a decadelong borrowing boom as record numbers of students enrolled in trade schools, universities and graduate schools.

While most have since left school and joined the workforce, 43% of the roughly 22 million Americans with federal student loans weren’t making payments as of Jan. 1, according to a quarterly snapshot of the Education Department’s $1.2 trillion student-loan portfolio.

About 1 in 6 borrowers, or 3.6 million, were in default on $56 billion in student debt, meaning they had gone at least a year without making a payment. Three million more owing roughly $66 billion were at least a month behind.

Meantime, another three million owing almost $110 billion were in “forbearance” or “deferment,” meaning they had received permission to temporarily halt payments due to a financial emergency, such as unemployment. The figures exclude borrowers still in school and those with government-guaranteed private loans.

Source.

Is the bubble finally popping!?

@magicalclick: But is not their money, it's yours! (Tax payer)

I'm so glad I got college done in the 90's. Looking at the financials these days I don't think I could convince myself it would be worth it. I'd probably just take up plumbing or something.

deadbeat students.

do you have the crack for that?

No, actually. But plumbers who do construction sites make dough. If I were starting over today I'd probably seriously consider it vs college.

Makes sense, those who are so poor and need financial help might continue to need financial help later on in life. I think weve made a breakthrough mates.

When it makes more sense and is a larger financial gain to be a stripper rather then attend college, I think one could say there's something questionable with the whole situation.

No such thing as "Debters" prison. Also what are the punishments for not paying it back? If any?

The colleges and technical schools cash in on government money and consistently give loans to students who should not get them for degrees they cant make money with and offer nothing to society. Almost no reason to go to college with the internet other than to show you have a degree when applying for a job. As someone who employs people though, the college students have been worthless and everyone I hired that learned on their own and doesn't have a degree have been much better employees and more skilled. Modeling, Texturing, Rigging etc. jobs for context.

student loans need to have more control measures, such as only providing them to career path building educations and not waste money on non-accredited institutions that are nothing more than for profit student loan mills, and we can also focus on providing free college education as that would solve a lot of problems

I also think they can save money by proactively giving tax breaks or even subsidies to industries and employers to provide on the job training through apprenticeship programs, so people can go right into the workforce and get the necessary skill building experience they need on the spot while employed and productive

We can start by outlawing for profit colleges. That's where a significant amount of delinquent defaulting students come from.

wouldnt pay shit either unless i had a job were i was banking anually

@magicalclick: not super cheap, though when I lived in WA it was so much more affordable for a quarter than it was in one semester in California community college by a large factor, plus I could knock out say a year of chemistry, year of language, whatever, in three quarters at a community college or university in WA, while in CA community colleges they have everything broken up into three semesters meaning what would take me 3/4 of one year in WA would take me 1 1/2 years in CA, so not only take twice as long but cost like several times as much money... stupid, anyhow moving back to WA

Tell that to my 300 hundred dollar used books, and my 600 dollar classes.......

that's why I scanned books and handed PDFs out to my friends =P

most my teachers were very cool, some just required we go pick up a $10-15 course packet from the local university print shop

I actually just finished paying mine off last Thursday.

Shouldn't have gotten the loan if they couldn't pay it back.

Haha, nice one. I see what you did there.

Assholes. That'll be the cause of the next financial crisis...

Really, really shitty credit ratings.

What is your degree in?

@magicalclick: damn, maybe I had it figured wrong this whole time **stupid** oh well, I'm considering school when I move back home, after I get a job of course

physics.

If we're going to legislate, instead of handing out large sums of cash like the socialists want to do, can we not just agree to not allow colleges to let you study for a degree without there being a possibility of finding an occupation in that field? Why cry to the government when the schools the one that scammed them into getting a worthless education at the expense of thousands of dollars and 4 years of their life.

Dude, community college is just getting your feet wet and getting some classes transferred to a four year university. You're unlikely to get hired anywhere that pays well with just high school and community college on your record. Everything is so competitive and employers only want the best of the best, which means hiring the most highly educated people with the highest GPAs.

That's because the cost is too damn high. Stupid system.

Such a stupid comment. Learn the reality of what it takes to make it in this country.

@still_vicious: Physics! That's awesome. A good friend of mine has a degree in physics and Is the head of the science department at one of the better public schools. He makes a decent living but I have no idea what his student loan situation was or is. I believe he got scholarships.

If he just payed it off, sounds like he already knows.

@Renevent42: He didn't give enough information to buy into that. For all you know he is lying or his parents paid it.

His second comment is still stupid.

No tax returns for them then.

The ones who gives the loans have to be realistic as well. The chance of them getting a job in their respective field should be taken into account. If more than 40% of those who have a student loan haven't made a payment in the last year or are late on their current one... Then I won't jump so easily to the conclusion that it is only the students who are at fault here.

I'm torn on the situation.

On one hand, they took out a debt, they should repay. That's part of being a responsible adult.

On the other hand, the whole "business" of college is pretty damn ridiculous. Outrageous interest fees, incredibly and needlessly high tuition costs, not to mention the costs of living, books, and so forth.

I tend to favor the latter thought: people should be rewarded for seeking out a college education, trying to improve themselves. Instead they are shackled with debt for decades, forced to take jobs they don't want or don't pay well just to make ends meet (so you actually stay in debt longer). The system is skewed to screw over students, and when you combine it with American society that, as of late, leans towards anti-intellectualism, it is just a bad situation.

You should not be penalized for improving yourself and thus improving your country. It's greed, plain and simple; if people had this country's interest in mind, they'd realize an educated workforce is the only smart move, and not an opportunity to enslave the youngest and brightest of us.

I think a lot of people here aren't seeing something.....

College/University isn't supposed to be a place to go and get training so you can get a "job" in the future. It is a place of higher learning so one can expand their mind and become a more well rounded individual. Getting a good job can be just a benefit from that.

It's more of a society problem than anything. We tell kids, young kids with no life experience at all, that going to college is the only way to get ahead in life. Funny thing is this wasn't always the case. I think the college degree rate in this country is close to 30%. That's nuts!!!!!!! But we got there the wrong way even though I would say getting more people educated is a good thing.

We have a declining middle class, so instead of addressing the issue politically and figuring out why that is, we as a society have told the youth to go to college. However, in the US this isn't a free option therefore youths take out massive amounts of loans to attend a school to hope to be in the middle class wage range upon graduating.

And it doesn't help that as a society we put down technical schools and community colleges as "lesser" keeping people from going that rout to educate themselves and learn a trade.

The issue is the middle class is gone and we are doing the wrong thing to fix it. 20-30 years ago people could live a middle class lifestyle with just a high school degree. But once all the manufacturing jobs went over seas so did our middle class.

If we are going to assume people are lying then there's no point discussing anything. He said his degree is in physics and he paid his loans off, on what grounds can you say he doesn't know what it takes to make it in this country?

Regarding the second comment, it's kinda true. There's a lot of stupid people signing up for school racking up tens of thousands of dollars for schooling they should never be doing in the first place. Not that I don't agree the college loan system in this country is way out of whack, but there is some level of personal responsibility on the part of the student as well.

This is something that both parties should address. Students shouldnt have to amass a mountain of debt in getting a higher education. We need an educated population to fill the job demands of the 21st century. No one is saying that you hand ppl free degrees, but they should work on affordability.

@TheWalkingGhost: 'What it takes to make it in this country..'

Yeah, cause its soooo hard.

We have to stop telling every high school graduate that they have to go to college. A lot of people would be better off finding a job and deciding later if college is worth the expense. In my case it was a complete waste of time and money.

Are they really ridiculous though? Interest rates are proportionate to the risk that the banks take; if 40% aren't paying their loans back, then it's safe to say it's a high risk.

I paid my loan off and make a lot, seems like I do.

No paid for it mostly myself. Scholarships helped a little bit.

How is it stupid? If you borrow money, you should be expected to pay it back. Don't make bad decisions that lead to you being unable to pay it back.

It's fun, I love to learn new things, and it fits the bill. I've been moving more in the direction of programming than hard science since college, but it was a great foundation in going into engineering.