Study: Student Loan Default Rates Highest Among Minorities
A new analysis of National Center for Education Statistics data shows high student loan default rates for Black and Hispanic students, students who leave college with a heavy debt burden and college graduates who take low-paying jobs.
November 21st, 2007 at 11:49 am
Thank you for this valuable information. With the student loan industry running as amok as the mortgage industry, families who borrow to pay for education are left with almost no consumer rights, contributing to these high default rates.
It’s important to recognize many students borrowed not intending to default. However, life circumstances have forced them into this predicament, and lack of consumer rights has encouraged default. Many borrowers have been led to consolidate, and in doing so, turned their loans over to predatory lenders that hurt rather than help students and their families.
April 7th, 2008 at 1:49 am
Student loans are a great idea. However, speaking as a person who has defaulted on my Federal loans, I can tell you that the penalties and capitalized interest do not help people pay their bills, but rather keep them in debt forever. Is this the future of higher education - Those who have the least must pay the most? For instance, among African-Americans the default rate is nearly 40%. Once these young people default, heavy penalties are placed on the loans. In my case, $8000 was added to my original loan of $33,000. I don’t understand the logic there - can’t pay your student loan, here’s $8000 more to pay and just for fun we will capitalize the interest for you. According to the gov’t, I owe over $10,000 in interest - largely inflated by the penalties. Unknown to many, there are no statute of limitations meaning you will owe this money until you die and just for kicks when you are old we’ll take a portion of your social security.
Student loans originally intended to benefit the poor are now, intended or not, used to enslave them.