A dying & decaying nation: Student loan debts top $1 trln in US

Greetings,

I don’t the that politicians nor the average person understand what this means. I don’t think that they understand that a debt burdened nation of students cannot produce a viable future for a declining nation or power. If the students are living under the shadow of debt, how can they focus on a prosperous future.

…” The plague of Allah (God) against the educational system of America is something that the philosophers and scientists should look into, as the destruction of America’s education is the destruction of their wisdom to educate the people.

  There are many who look on the destruction without taking a second thought of the destruction without taking a second thought of the destruction of America’s education. Education is a guide for the people to keep and maintain a civilized life. It is education that civilizes us. Now to see the citizens of America rebelling against the American educational system is something that the wise of the wise should take thought of.

  The American people actually have come to the point where they hate their own educational system. This means that they are now hating and destroying their civilization because it is education that civilizes people.”–pg.92(tfoa)

…”Remember the destruction of America’s educational system means the doom of America.”–pg.98(tfoa)

 

Student loan debts top $1 trln in US

The student loan industry is booming, saddling over 37 million college students and graduates with $1.08 trillion in loans in 2013, even as President Barack Obama and lawmakers work to rein in the crippling debt young people face in the US.

The average cost of a Bachelor’s degree at a private college or  university is $45,000, according to The College Board’s Trends in Higher Education.  Students attending public schools in their home state pay just  under $23,000 on average, while those paying out-of-state tuition  can expect to pay more than $36,000 a year. In 2012, The College  Board says the average student carried over $6,000 student loans  for the academic year.

Of the nearly 20 million Americans who attend college each year,  about 12 million borrow, according to the Almanac of Higher  Education. Estimates show that the average four-year graduate  accumulates $26,000 to $29,000 in loans, and some leave college  with debt totaling in the six figures. Those students who  continue on to graduate school, especially law and medical  school, see their debt balloon.

All that debt hits as soon as students graduate, whether they  have a job or not. And millennials – those born after 1982 – were  the hardest hit group in the Great Recession, as professionals  with experience took entry-level jobs just to get by and  millennials sometimes took unpaid internships after graduation,  in the hopes that the experience would translate into a job. In  2012, the unemployment rate for college graduates under the age  of 24 was 9.4 percent, while the overall unemployment rate  hovered around 8 percent, according to the Bureau of Labor and  Statistics. Those who didn’t get a job or an unpaid internship  turned to graduate school, adding to their overall debt.

Now college graduates are realizing they may have mortgaged their  future to pay for their educations as interest piles on to the  initial loan. A   brief based on the Federal Reserve Board’s Survey of Consumer  Finances and other sources, shows that, over a lifetime of  employment and saving, $53,000 in education debt leads to a  wealth loss of nearly $208,000.

Nida Degesys, who graduated in 2013 from Northeast Ohio Medical  University with about $180,000 in loans, told the Associated  Press, “There were times where this would make me stay up at  night.” With interest, Degesys now owes a total of $220,000.  “The principal alone is a problem, but the interest is  staggering.”

But these same graduates also have a much higher earning  potential than those who don’t receive a Bachelor’s degree.  According to the   Pew Research Center, millennials aged 25-32 with a four-year  degree earn an average of $45,500 a year, compared with $30,000  for those with an associate’s degree or some college and $28,000  for someone with only a high school education. They also have a  lower unemployment rate: 3.8 percent versus 8.1 percent or 12.2  percent, respectively.

That higher earning potential doesn’t help them down the line,  though. Gregory Zbylut pays $1,300 a month towards his $160,000  in law school loans. He graduated from Loyola University in  Chicago in 2005. He estimates he could have saved $150,000 to  $200,000 if that monthly payment had gone into a 401(k)  retirement account instead. He’s been turned down twice for a  mortgage, he told AP, and he’s been unable to marry his fiancé  between his debts and her son. “I have more education and  more degrees than my father, as does she than her parents, and  yet our parents are better off than we are. What’s wrong with  this picture?” he said.

The government is stuck between a rock and a hard place when it  comes to fixing the student debt crisis. The federal government  funded 43 percent of student loans in the 2012-2013 academic  year, The College Board said. Borrowers are locked into a 6.8  percent interest rate for student loans, while the average  interest rate for a 30-year, fixed-rate mortgage is much lower at  4.5 percent. The Congressional Budget Office estimates the “break  even” interest rate for the student loan program would be around  2.5 percent. The   CBO also projects the government will earn $184 billion off  student loans over the next ten years. But that profit comes on  the backs of the government’s constituents, and student loans  (unlike all other types of loans) don’t go away in bankruptcy or  after death.

Sen. Elizabeth Warren (D-Mass.) is leading the charge to change  the way the federal government loans money to students.   “I’d like us to go a long way toward letting people  deal with student loans the same way they deal with home  mortgages and medical debts,” she told the   Huffington Post in September. Warren plans to introduce  legislation that would allow borrowers to refinance their debts  the way that homeowners and businesses can already refinance.

“This exploding debt is also dragging down our economy. With  monthly loan bills that can easily exceed a mortgage payment,  it’s no surprise that homeownership among thirty-year olds has  declined steeply. And last spring, the Federal Reserve raised  concerns that rising student debt may threaten our overall  economic growth,” Warren wrote in   prepared remarks for a speech on the Senate floor. Warren’s  plan would also focus on bringing down the costs of higher  education. She would pay for the lost revenue by enacting the  so-called “Buffett  Rule” to close tax loopholes on millionaires.

On Thursday, at a Senate Health, Education, Labor and Pensions  (HELP) Committee hearing, Sen. Tom Harkin (D-Iowa) proposed  limiting the amount of money graduate students can borrow and  reducing the loan amounts for certain categories of undergraduate  students. Before 2006, graduate students could only borrow up to  $138,500 total in federal loans and also had an annual cap on the  amount they could borrow.

Congress lowered the interest rate on some student loans to 3.86  percent for the 2012-2013 academic school year, but that only  affects current borrowers who receive the federal unsubsidized  loans.

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