No liberal arts student needs to pay more than $15,000 to earn an accredited bachelor’s degree. That’s about $10.50 a day. Working at a fast food restaurant part time will pay for this. But parents send their children into the debt swamp, even dipping into their retirement savings to pay for this. Even with help from parents, the average college graduate leaves college with $25,000 of debt — and half who begin do not graduate.
The U.S. government subsidizes this disaster.
Under the Student Aid and Fiscal Responsibility Act (SAFRA) signed into law as part of ObamaCare in March of 2010, students may borrow money directly from the federal government regardless of their credit score or any other financial “issues” they may be facing. They are not priced according to any “individualized measure of risk” nor are there loan limits. They are instead politically determined by Congress with undergraduates receiving lower interest rates than graduate students, but graduate students allowed to borrow more than undergrads.
Once in the debt trap, the student is locked in by federal law. Student loans are not discharged by bankruptcy. These loans are exempt from protection.
College costs are rising because of federal intervention. “Since 2000, tuition at public, four-year colleges has risen by an inflation-adjusted 72 percent, and over the past 25 years it has increased at an annual rate 6 percentage points higher than the cost of living.
Loan default rates are increasing. They are close to 15% of the $1 trillion in outstanding college debt. But the debts do not go away. The debtors’ credit ratings plummets. They cannot borrow to buy homes.
Anyone who marries one of these victims co-signs the note until it is paid off.
Anyone who gets romantically involved had better run a credit check on the other person before pursuing this. The lobster trap is big enough for two people.