Student Loan Rates Hit 14 year high- No End in Sight
The student loan default rate, reached 13.4 percent, according to a U.S. Education Department report that came out last week, the highest in 14 years.
If you go back three years instead of the normal two, the default rate is a scary 22.7 percent. Student loan debt is now about $1 trillion, surpassing credit-card debt.
The Obama White House and the Congress are looking for more disclosures on student loans on the front end. The issue is one in the Presidential campaign with President Obama and Mitt Romney is disagreement on how to handle the problem. Obama, by executive fiat, is threatening colleges with revocation of funding if default rates hit a certain level beginning in 2014. Private colleges had a higher default rate than public schools.
Students can negotiate forbearances with their lenders, but most prefer some sort of payment plan.
With the rising rate of tuition at all colleges, more students come out with debt and more students come out with higher debt. In spite of attempts to deal with this problem, the prospect for student loan defaults will get worse, not better.