“more than 8 million student borrowers are in default on their federal loans for higher education”
When the day of reckoning finally comes on this, it will make the last housing crash seem small.
The Washington Examiner reports:
The student loan bubble might be about to pop
Amid headlines of record-low unemployment and a bullish economy, millennials burdened with student loans lurk behind the scenes. Their vast sums of debt are not reflected in the current description of the economy, but have implications for its future.
Currently more than 8 million student borrowers are in default on their federal loans for higher education, or about one in five borrowers whose loans have come due. Moreover, the student loan balance for the nation as a whole is forecasted to reach $2 trillion by 2022.
A large portion of that money may never be repaid, experts are now suggesting. Nearly 40 percent of borrowers may default on their student loans by 2023, according to a report published by the Brookings Institution.
The report’s author, Judith Scott-Clayton, writes that debt and default rates for black college students are at “crisis levels,” even for those who have obtained a Bachelor’s degree. Shockingly, black graduates with a Bachelor’s degree are more likely to default than white college dropouts.
The for-profit sector in higher education drives many of these figures; half of their student loan borrowers default within 12 years of entering the school.
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