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Government Spent $1.4 Billion in 2011 to Track Down Student Loan Debtors

Written by Gary North on September 13, 2012

The U.S. Department of Education spent $1.4 billion in 2011 to track down students who are in default on their government-guaranteed loans. The total amount in default was $76 billion.

If this program were titled accurately, it would be called the “Blood Out of Turnips” program. There is no way that the government is going to get back this money. The amount lent keeps climbing: over $1 trillion. The amount in default keeps growing.

The recent graduates cannot find jobs that enable them to pay off these loans. The average debt is $25,000. But the non-average debts higher than $50,000 are expensive to repay. The job market for recently graduated students is the worst in three decades.

The government does not stop guaranteeing these loans for banks. It increases its guarantees. This is the banks #1 income source. The size of the market keeps growing. The Feds back the loans. The Feds pay for the collection agencies. What could be better for bankers?

This is leading to the debt-dependence of a generation of college students, whose parents put pressure on them to go to college, yet do not finance 100% of their children’s college educations.

None of this is necessary for liberal arts majors. They can earn their degrees for under $15,000 total. But their parents do not know this, and neither do the students.

To see these students building up chains for their futures is a sad thing for anyone who knows better. Their parents do not warn them.  Worse, their parents encourage this.

 

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12 thoughts on “Government Spent $1.4 Billion in 2011 to Track Down Student Loan Debtors

  1. Government programs made it easy for students to get the money. That motivated universities to raise their prices. But they also changed their focus from functional information for living to liberal political agenda. And the students bought it. Now they find that the education gets them NOTHING and they simply cannot afford to pay it back. Or maybe they learned that so many have failed to pay theirs back and decided to use the money for themselves. Expected? Yes.

    So the government goes after delinguent loans owed to non government agencies, because the government guaranteed the loans. (WHY did they guarantee those loans?)

    The governement got involved and the results is a MAJOR mess.

    Cancel the program. Let free market prevail and let the students make their own way. I DID. I worked full time while going to school full time. NO PARTY.

    Get the government out. Cancel a failed program. Let the universities compete for the few remaining dollars and THEIR prices will go down.

    CHRISTIAN TEA PARTY -one day after the election

  2. Our gopvernment hard at work spending 1.5 Billion to collect maybe 15 Million, this sounds about right for the government. Must not let these "dead beats" get away with not paying their student loans even if they can not find a job or have to flip burgers

  3. Interesting, the government says college grads can get great jobs. And make it easy to get loans to pay for their education. After all most of our politicians went to college to be lawyers. Then while the kids are going to college to get great jobs, the government is working at shutting down jobs by the hundreds. Seems like a scheme to take money from people who are doing what our government and most parents encourage. When are parents going to figure out our government doesn't care about them or their kids?

  4. The US government should just hand out the cash like it does to foreign students (mostly moslems, or commies) free and clear with no requirements to repay.

  5. the more goverment money that is made easily available to students, the colleges/universities raise the cost of tuition. it is a no win situation, except for the lenders and schools. stop and end all goverment school loans immediately. tuitions would drop at least 50 % or more. do we need our governments to fund and blackmail our schools, well that s what government money for schools does. that is just a starter.

  6. Why doesn't the government just cancel all student loan programs, pay off the debt already incurred by students and let the remaining students and families pay their own way or not go to college. Government needs to get out of the lending business. Gee, wouldn't that be nice. Even though it won't happen. This is the way government keeps the kids voting for them.

  7. Get a grant, get a job or join the Service. No more loans, without jobs to pay them off.

  8. Cliffystones says:

    "Why doesn't the government just cancel all student loan programs, pay off the debt already incurred by students and let the remaining students and families pay their own way or not go to college.'

    Because Paul, that would make sense! Silly 🙂

  9. The IRS can do the job. They get a salary to do it.. Looking up the SS number and finding out a place of employment, take the money through garnishments, leans on bank accounts.. DONE DEAL! What a waist, AGAIN of our tax dollars .. Stupid thinkin, but then they are always Stupid thinkin….

  10. NUMBER ONE on the current administrations agenda is to bankrupt America, so we can't defend freedom, and what they can't spend, they are giving away.

  11. […] the government is going to get back this money. The amount lent keeps climbing: over $1 trillion. (in student loans) The amount in default keeps […]