Millions Aren’t Paying Their Student Loans
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Millions Aren’t Paying Their Student Loans
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Why are so many Americans failing to pay off their student loans?
From The Epoch Times. Millions of student loan borrowers have not made payments since the pandemic-era pause on payments expired in October, according to new U.S. government data.
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In a Dec. 15 blog post, Department of Education Under Secretary James Kvaal wrote that just 60 percent of the approximately 22 million people who had their student loan payments resumed have made a payment by the middle of November. This is equal to about nine million individuals who have not submitted a payment. …
Mr. Kvaal noted many borrowers “are confused or overwhelmed about their options.” He added that repayment challenges were common before the public health crisis “because they were delinquent or obtained a deferment or forbearance.”
“In the meantime, we will continue to give borrowers the information and support they need to take advantage of all of the benefits of federal student loans,” he wrote in the post.
“We have given clear guidance to our student loan servicers that they will be held accountable if they don’t meet their basic contractual obligations to borrowers and the Department.”
He added that borrowers struggling to budget monthly student loan payments will be “protected from the worst consequences of missed payments through the on-ramp.”
The Department of Education established the 12-month on-ramp program. This is an initiative that will last until September, offering leniency to borrowers and preventing them from facing “the harshest consequences of missed payments,” including default, delinquency, and mandatory collections.”
It is estimated that roughly 43 million borrowers owe the U.S. government about $1.7 trillion in student loan debt. …
Borrowers Struggling, Polling Shows
When it was announced that student loan payments would resume, various surveys warned that borrowers would struggle to make payments.
In July, a Life and My Finances poll discovered that half of student borrowers could not afford to repay student loans on their current income. Nearly one-fifth of the respondents noted that they would have to borrow the money to repay their student loans. …
Many borrowers were also unaware of how much student loan debt they had.
The same poll found that most borrowers used the would-be student loan payments to pay for the basics, like food and rent. …
Effects on the Economy
Economists have warned that the resumption of student loan bills for 40 million Americans could have consequences for the broader economy.
The Kobeissi Letter, a financial research newsletter, projected that about $9 billion in consumer spending would be eliminated every month. …
The student loan crisis is wreaking havoc on millions of Americans and the economy. What do you think is the solution? Share your thoughts and prayers below.
(Excerpt from The Epoch Times. Photo Credit: Emil Kalibradov on Unsplash)
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There is a serious difference between one cannot pay the load and the one who feels they can get out of paying the loan. I’ve talked to them in the campuses. They feel it’s the governments responsibility to pay the loan. After all, it is the government that loaned them the money! What a generation of sick people. I have a grand daughter who just finished medical school. She has over 210000 of financial loans. She is currently paying the load off . If they went into the military they could get about half the loan forgiven. There are all kinds of ways to pay off their loans. How can educated people be so stupid!!!
Lord,
We pray that those with student debt would walk with godly integrity and dignity to fulfill their obligations, not seeking any ungodly means to evade their debts but instead, calling upon the name of the Lord for help in their time of need.
Lord, we ask that You engage with them in a way that sets them free from the lender, and in ways that proper them in You. (Prov 22:7b “… And the borrower is servant to the lender.”)
Creditors make a profit from interest payments and even more so when payees default. The compounding interest can become quickly become an anastronomical amount burdening the payee’s ability to pay. This is a terrible predicament to end up in. Furthermore these creditors will hunt you down all the way to your grave and collect from your estate after you die if you have any estate left.
I believe in paying what you owe and not to barrow in the first place.
This government loan system offered to parents and children for student loans appears helpful at the onset but predatory if students default. An interest scam at worst.
I offer prayers for those who, out of hardship defaulted and that fair forbearance be made to low income defaulters. Especially those whose education didn’t provide them with sustainable income.
Israel had a Jubilee Year every 50 years to forgive debut accumulation. This may have seemed unfair to those who paid off loans but it is exceedingly unfair to those who did not acquired the means to pay and to be charged further accumulated interest. There needs to be a reset button to protect for this overreach. I think that after 20 years a person who has defaulted due to proven hardship, that debt should be forgiven.
I would do this if someone owed me and could not pay and were digging a deeper hole they could not get out of. I would think after 20 years the loss would be absorbed. That’s real forgiveness.
Students should be required to pay the monthly loan amount. It took me 15 years to pay off my sons students loans, but I was granted a loan amount and I paid without fail til both loans were paid off. Besides that, I worked 40 hours a week to get through University of Denver and graduated w/o debt. I am NOT for giving a get out of paying your student loan card…