As of July, 6.9 million Americans with student loans hadn’t sent a payment to the government in at least 360 days, according to the latest quarterly data from the U.S. Department of Education, reports the Wall Street Journal. That translates into 17% of all borrowers with federal loans being delinquent. Millions more are behind on their loans but haven’t hit the 360-day threshold that the government defines as default.
Absent a change in legislation, student loan debt can’t be dismissed through bankruptcy. Of course, do-gooder politicians, who urged laxer lending policies to begin with, now are falling over themselves to find ways to ease the debt burden incurred by the intended beneficiaries. Hillary Clinton, for instance, has proposed a plan that would cost $350 billion over 10 years and would be financed by a reduction in tax deductions for affluent taxpayers.
Summing up the problem: the United States higher ed system experiences endless administrative bloat… the costs of which universities pass on to students by means of higher tuition and fees… which the U.S. government makes easier to pay by allowing nearly unlimited borrowing… while no one addresses the underlying problem of rising costs. And the solution to the debt problem? Stick it to affluent taxpayers!
What a racket!
The rise of massive student indebtedness, now approaching $1.2 trillion, is as a clear-cut example of social injustice in the United States as you can find, but it is not portrayed is such because (a) the building blocks were put into place by social justice warriors themselves, and (b) the primary beneficiaries, universities, are bastions of do-gooder thinking.
This is only one of many examples of how the social justice crowd has immiserated the poor and working class in the United States through misguided policy. Before “helping” with student loans, the social justice crowd pushed for lower credit standards for mortgages in order to promote home ownership. The result: a deluge of foreclosures on sub-prime loans causing one of the greatest liquidations of wealth among the poor in U.S. history. Now the social justice crowd wants to “help” the poor by jacking up the minimum wage to levels that will, according to reputable estimates, result in the loss of 5% of such jobs in the short run, increase automation of low-wage jobs in the long run, and make it difficult for the poor and young to find entry-level jobs.
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