Good luck with that – Next “Subprime Crisis” Expands As Student Loan Defaults Hit $146 Billion, Highest Default Rate Level Since 1995 | Zero Hedge.
Let’s sum it up…
“The national two-year cohort default rate rose from 9.1 percent for FY 2010 to 10 percent for FY 2011. The three-year cohort default rate rose from 13.4 percent for FY 2009 to 14.7 percent for FY 2010.“
And Secretary of Education Arne Duncan’s solution?
“The growing number of students who have defaulted on their federal student loans is troubling,” U.S. Secretary of Education Arne Duncan said. “The Department will continue to work with institutions and borrowers to
ensure that student debt is affordable. We remain committed to building a shared partnership with states, local governments, institutions, and students—as well as the business, labor, and philanthropic leaders—to improve college affordability for millions of students and families.”
Why, why, WHY is the affordability of college related to interest rates? Shouldn’t it be related to the damn cost? Zero Hedge’s common sense observation…
In other words, the response to the bursting of the student loan bubble, is to entice even more young people into the low-yield debt trap by “keeping debt affordable”, which in turn will lead to college tuitions rising even higher, forcing students to take out, and default on, even more loans, and so on until this latest debt bubble can no longer be swept under the rug.
Wow, perhaps someone should worry about the damn economy. Riddle me this, what expense is rising faster than health care costs?
