When it Comes to the Student Debt Crisis, Taxpayers Lose Either Way
If there was ever a scenario in which there were no winners, the student debt crisis may be it. Thousands upon thousands of graduates are being funneled out of American colleges and universities every year, packing with them, on average, around $30,000 in debt. That is hamstringing a lot of individuals before they’re even able to start their careers, which sometimes requires them to work for free in internships, or move back home with their folks.
Many analysts are calling the student debt crisis the next big economic bubble, and there isn’t any clear way out of it. In fact, no matter what we do, the taxpayers are going to be on the hook for the bill at the end of the day.
We’re up to $1.2 trillion in outstanding student loans, and as of 2014, 17% of borrowers are delinquent or in default on those loans, per a report from the New York Fed. Millions of graduates can’t pay their loans back, and some are even flat-out refusing to. Recent news that the government has decided to forgive the loans for students that were attending, or graduated from, the for-profit Corinthian Colleges, which was found to be little more than a diploma mill, has emboldened others to call for more loan forgiveness from the government.
And some officials have even put a plan together to do just that.
According to a report from The Miami Herald, U.S. Secretary of Education Arne Duncan has set the wheels in motion on a plan that would forgive billions in student loans — at the taxpayer’s expense. The first step of Duncan’s plan is being seen with the current situation with Corinthian Colleges, which is just one of several big education companies that are essentially ripping off both students and taxpayers by profiting off of government-backed loans and grants, then handing out near-worthless degrees.
Duncan told reporters that students “deserve a college education free from rip-off scams,” and that “some of these schools have brought the ethics of payday lending into higher education.”
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