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Obama's decision to nationalize the Student loan program will cost Feds Billions.
SFGbob
Member Posts: 32,213
in Tug Tavern
Ah yes, the efficiency and cost savings when you let the Federal government take over an industry.
Aug. 21 (UPI) -- The total amount of household debt in the United States has grown for the 20th consecutive quarter and student loans have become the most prevalent type of "severely derogatory" debt, new statistics show.
The Federal Reserve Bank of New York said in its quarterly report household debt climbed by nearly $200 billion in the second quarter, to nearly $14 trillion.
Not only has rising student debt become the most defaulted, the New York Fed classified the spike over the last few years as "stunning."
"The outstanding severely derogatory balance is comprised of 35 percent defaulted student loans, which have grown stunningly since 2012," the report states.
The New York Fed defines "severely derogatory" as any kind of delinquent loan -- along with repossession, foreclosure or charge off -- meaning the lender has removed a debt from its books.
The report also found that student loan delinquency rates increased by 10 percent for the period between April and July, transitioning at high levels to relative types of debt.
Ashley Harrington, senior policy counsel at the Center for Responsible Lending, says one reason for the high rate of derogatory student debt is that 90 percent of outstanding loans are federal loans, which take longer to default.
"For federal loans, you are not defaulting until 270 days delinquent, and even then it takes a bit longer to show up on your credit report," she said. "Whereas we know very soon when someone is struggling with payments on their credit cards or their cars, or their houses, it takes much longer for us to really register the extent of the issue with student debt."
Aug. 21 (UPI) -- The total amount of household debt in the United States has grown for the 20th consecutive quarter and student loans have become the most prevalent type of "severely derogatory" debt, new statistics show.
The Federal Reserve Bank of New York said in its quarterly report household debt climbed by nearly $200 billion in the second quarter, to nearly $14 trillion.
Not only has rising student debt become the most defaulted, the New York Fed classified the spike over the last few years as "stunning."
"The outstanding severely derogatory balance is comprised of 35 percent defaulted student loans, which have grown stunningly since 2012," the report states.
The New York Fed defines "severely derogatory" as any kind of delinquent loan -- along with repossession, foreclosure or charge off -- meaning the lender has removed a debt from its books.
The report also found that student loan delinquency rates increased by 10 percent for the period between April and July, transitioning at high levels to relative types of debt.
Ashley Harrington, senior policy counsel at the Center for Responsible Lending, says one reason for the high rate of derogatory student debt is that 90 percent of outstanding loans are federal loans, which take longer to default.
"For federal loans, you are not defaulting until 270 days delinquent, and even then it takes a bit longer to show up on your credit report," she said. "Whereas we know very soon when someone is struggling with payments on their credit cards or their cars, or their houses, it takes much longer for us to really register the extent of the issue with student debt."
Comments
The very same asswholes who are telling us now that a Single Payer Federalized health insurance program will save us money were telling us the exact same thing in 2010 when Obama took over the Student loan program.
Obama sold this government takeover as a way to save money — why bear the costs of guaranteeing private loans, he said, when the government could cut out the middleman and lend the money itself?
The cost savings didn't happen. In fact, the Congressional Budget Office just increased its 10-year forecast for the loan program's costs by $27 billion, or 30%.
https://www.investors.com/politics/editorials/obama-created-student-loan-crisis-with-1-trillion-in-loans/
Respect the pole interpretive performers.
Even the Communist News Network knows so I know you know.
https://money.cnn.com/2016/11/30/pf/college/obama-student-loan-cost/index.html
But that kind of legislation could be met with pushback from the president-elect. During the campaign, Trump said he would make Obama's program even more generous by capping monthly payments at 12.5% and cutting the repayment period down to 15 years.
It's CNN they'll praise Obama regardless and slam Trump. Hope this helps.
https://www.theatlantic.com/business/archive/2011/10/obamas-student-loan-order-saves-the-average-grad-less-than-10-a-month/247411/
The legislation to create the CCRAA passed quickly from bill to law with bipartisan support in both House and Senate. Rep. George Miller (D-CA), Chairman of the House Education and Labor Committee, drafted the initial bill (H.R. 2669), with input from Ranking Member Howard P. McKeon (R-CA). It was passed by the House on July 11, 2007. The Senate passed its version of the Act on July 20, 2007. A conference committee report to resolve differences between the House and Senate versions, and to ward off a threatened Presidential veto, was approved on September 7, 2007 (PL 110-84).