The student debt bubble has continued to inflate.
According to Slate, student loan debt is now at $900 billion, two and a half times what it was just seven years ago, and large numbers of those carrying debt are falling behind.
The Fed’s numbers show that a startling 12 percent of borrowers aged 40 to 49 are at least 90 days behind. That’s a demographic that should be in the prime of their careers and free of such stress. The unemployment rate for that group is probably under 7 percent, according to Bureau of Labor Statistics data, significantly below the national average of 8.2 percent. Moreover, though joblessness has declined from its late 2009 peak of 10 percent, most age groups are experiencing higher rates of student loan delinquencies.
We are faced with the prospect of an entire generation, working to get ahead by getting degrees, burying itself under an unmanageable level of debt.
The problem is not, as Mitt Romney says, that students are not shopping around for cheap schools. And it is not just the banks’ outsized role in the student funding racket.
The problem is that we have been forced to borrow because there are few other funding options and school costs have skyrocketed.
We should be moving away from loans to direct grants to students and a massive infusion of direct funding to the schools themselves.
Hank Kalet 