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The Looming Student Loan Crisis Is Worse Than We Thought

Education Next – Judith Scott-Clayton

“This report analyzes new data on student debt and repayment, released by the U.S. Department of Education in October 2017. Previously available data have been limited to borrowers only, follow students for a relatively short period (3-5 years) after entering repayment, and had only limited information on student characteristics and experiences. The new data allow for the most comprehensive assessment to date of student debt and default from the moment students first enter college, to when they are repaying loans up to 20 years later, for two cohorts of first-time entrants (in 1995-96 and 2003-04).” (more)

College Students Miss Mark on Financial Literacy, Survey Shows

Education News – Raymond Scott

“LendEdu, an online marketplace created to offer student loan borrowers insight into their personal finances and loans without damaging their credit, has released its 2016 College Students and Personal Finance Study — and the results show a high degree of financial uncertainty among college students. The study surveyed current college students on basic personal finance knowledge and tried to gain insight into how they are managing money…In its introduction, the survey acknowledges a general lack of financial literacy in the United Sates. Currently, only 17 states require high school students to take a class in personal finances. Unsurprisingly, the results exhibited students “lacking basic knowledge and confidence” on financial matters…The report makes clear the urgent need for financial literacy coursework…Largely, students are not pulling in high incomes. 27% of students reported that they do not have a source of income, while another 40% of students were working part-time or had an on-campus job. The fact that students are not making much money adds greater emphasis to the need for financial literacy. Students must learn how to make the most of limited funds.”(more)

What’s a degree worth? Depends on what you study — and where

The Washington Post – Nick Anderson

“Given rising costs, high debt and an uncertain job market, questions about the value of a college degree have proliferated. As the debate heats up, remember that, overall, college is a good investment. Even if it isn’t uniformly worth a million dollars, college graduates earn more than high school graduates and they are far less likely to be unemployed. But students need to know that not all college degrees are created equal and that some majors will launch them into the middle class relatively quickly while others might lead to years upon years of camping out in Mom’s basement, driving a beater and struggling to pay off student loans…Luckily…many states are reporting what graduates with different majors at different schools earn.”(more)

Obama to forgive the student debt of permanently disabled people

The Washington Post – Danielle Douglas-Gabriel

“The Obama administration plans to forgive $7.7 billion in federal student loans held by nearly 400,000 permanently disabled Americans. By law, anyone with a severe disability is eligible to have the government discharge their federal student loans. The administration took steps four years ago to make the process easier by letting people who are totally and permanently disabled use their Social Security designation to apply for a discharge, but few took advantage. The Department of Education is now taking it upon itself to identify eligible borrowers and guide them through the steps to discharge their loans. “Too many eligible borrowers were falling through the cracks, unaware they were eligible for relief,” said Education Under Secretary Ted Mitchell in a statement. “Americans with disabilities have a right to student loan relief. And we need to make it easier, not harder, for them to receive the benefits they are due.””(more)

Middle-class minorities are most at risk of falling behind on student loans, report says

The Washington Post – Danielle Douglas-Gabriel

“Middle-class African Americans and Hispanics are disproportionately falling behind on student loan payments, signaling that higher education is failing to ward off financial instability for minorities, according to newly released data. Researchers at the Washington Center for Equitable Growth analyzed delinquency rates, average loan balances and median income at a Zip-code level and found higher numbers of past-due student loans in predominantly African American and Hispanic communities…“These data tell us that debt-financed higher education is not the solution to racial inequality, since it doesn’t overcome longstanding economic disparities. It may even be contributing to the problem,” said Marshall Steinbaum, a research economist…”(more)

A Fresh Start For Millennials: The Case For Forgiving Student Loans

Forbes – Rob Asghar

““Let’s not mince words,” economist Anthony Orlando says. “Student loans are killing people. People need to understand just how big a problem we’re talking about: Americans owe more in student loans than on all their credit cards combined.” Orlando, the author of Letter to the One Percent, suggests that, for American society to build its best future, we should consider forgiving substantial amounts of the student debt racked up by recent college graduates—and to find new ways to lower the debt burden for current and future college students…When I talk to people my age about the future, they don’t talk about mortgages. They talk about student loans.”(more)