Barely Half of Student Loans Are Being Repaid

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That is a pretty significant stat. It certainly does not indicate upward mobility for today’s youth.

It also indicates how completely out of whack our crony system of student debt is. The colleges love it. The students well, they aren’t able to pay the money they were loaned back. So they don’t love it so much.

(From FEE)

Now, these statistics do not mean that taxpayers will need to pick up the tab for 46 percent of the outstanding student loan balance, but they do raise a red flag that taxpayers could be on the hook for a lot of money if these loans are not repaid in full. Moreover, high delinquency and default rates will hurt the ability of students to gain access to credit in the future, slowing the economy.

Unfortunately, the trend seems to be moving in the wrong direction. While delinquency rates dropped, overall loan nonperformance increased. Most notably, student loans in default (defined here as loans more than 360 days delinquent) increased 31 percent in the past year, to $56 billion. This far outpaced the 20 percent increase in the outstanding balance for all borrowers not in school or a grace period.

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