Business Week reports here on default rates on student loans. It’s incredibly high. Here’s the problem. Key to the ability to pay back a loan is obtaining a job. With the current administration’s economic policies, the future is bleak for new college graduates. So who pays when students default? Take a guess. Unfortunately, we’re turning into a country that stigmatizes very few behaviors anymore, including those in the financial realm. In the mortgage industry, our lack of personal responsibility has even morphed into what’s called “strategic default” in which homeowners who owe more than their home is worth simply walk away, even though they are able to make the payments. If we expect to encourage college graduates to pay their loans, we must change our economic policies to give them opportunities to work and pay their bills — and then make it clear as a society that we expect them to do it.
In the end, 27 percent of the remaining borrowers were late on their payments, totaling about 21 percent of the aggregate loan balance.
That’s a bleaker picture, with borrowers about twice as likely to be behind on student debt as for credit cards, car loans, and mortgages.
