The article reports:
A new analysis of federal student loans reveals the number of people severely behind on repaying their debt has soared in the last year, painting a bleak picture of one of the largest government programs.
The Consumer Federation of America released a study Tuesday that found that millions of people had not made a payment on $137 billion in federal student loans for at least nine months in 2016, a 14 percent increase in defaults from a year earlier. The consumer watchdog used the latest data from the Education Department, which manages $1.3 trillion in federal student debt owed by 42.4 million Americans.
“Despite a rising stock market and falling unemployment, student loan borrowers are still struggling,” said Rohit Chopra, a senior fellow at CFA and former student loan ombudsman at the Consumer Financial Protection Bureau. “The economy remains very difficult for so many young people just starting out.”
In recent years, as more money has become available for college loans, the cost of college has increased at levels higher than inflation. Students have also pursued degrees in subjects that may not translate well into the marketplace. The combination has created an increasing debt with a decreasing ability of students to pay back that debt.
It’s time to let banks and other financial institutions handle student loans. Historically, banks and financial institutions loan money to people with the expectation that the money will be paid back. They are careful in their lending practices. Scholarships should be made available to worthy students who cannot qualify for loans. It is time for colleges to bring their tuition into line with the overall cost of living so that students are not taking out loans they cannot afford to pay back.