Not Everyone Can — or Is — Repaying Their Student Loans
(Washington, D.C.) – According to data from the U.S. Department of Education, 46 percent of student loan recipients have defaulted, deferred, or have special circumstances under which they are not able to be in a repayment plan. The total amount of outstanding direct student loans stood at $855 billion at the beginning of the first quarter of 2016, distributed among over 30 million recipients. These numbers raise a red flag that taxpayers could be on the hook for a substantial portion of the student loan debts if they are not repaid in full. At the same time, high delinquency and default rates will limit the ability of students to gain access to credit in the future, hindering their opportunities and further slowing economic growth.
Marilinda García, National Spokesperson for The LIBRE Initiative, released the following statement:
“Student loan debt has been increasing dramatically over the last seven years, this is no secret. But pair that with a high unemployment rate among millennials – 12.8 percent – and you have more than one generation unable to move forward.
Congress has ignored the problem for far too long. The cost of higher education has been propped up by the use of government subsidies with no regard to the distortion it imposes on market prices and the negative impact it is having on the true cost and all related educational expenses. We need a new approach to reduce the debt burden of the current, and future, student loan recipients. The student loan debt problem is not just a student problem. If more and more students keep defaulting, society as a whole will pay the price of Washington’s misguided higher education policies.”