Thursday, September 17, 2015

DEADBEAT ALERT: Student Debt Payback Lags

More than half of students at 347 colleges and vocational schools defaulted on their loans or failed to pay down even a single dollar of their debt after seven years, according to a Wall Street Journal analysis of federal data released Saturday.
Despite the low repayment rates, students at these predominantly for-profit schools received $2.2 billion in federal loans last year, the Journal analysis found.
The schools include four-year, degree-granting colleges as well as two-year colleges and certificate-granting professional schools, such as beauty academies and technical institutes.
The findings highlight the rising concern over student debt, which has become an issue in the 2016 presidential race and a focus of the Obama administration. At issue: whether universities are offering strong returns on the investment students—and the government—are making.
The government extended a total of $134 billion in loans and grants in 2014 to students to pay college costs.
For schools to be eligible to collect that money, they must be approved by a nonprofit accreditor. A Wall Street Journal investigation published in June found that accreditors rarely penalize colleges with the lowest graduation rates and highest loan-default rates.
We're for Bernie. Let taxpayers pick up the tab for our debt
The issue has gained attention as cumulative student debt has reached $1.2 trillion. Nearly seven million students with debts haven’t made a payment in a year, according to Education Department data released last month. Students are especially vulnerable if they leave school with debt and no degree.
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