Are people defaulting on federal student loans?

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Posted on: 20 March 2018 by Micki Gomez

Why should it be possible to bankrupt gambling debt, medical debt, credit card debt but debt for job training is the one immortal sin that should destroy your life?

Here are a few inconvenient truths about student loan defaults:

1. A big part of the defaults come from students who can't earn enough money after their college years to pay the loans back. These people probably shouldn't have gone to college.

2. Another big part of the defaults come from people who game the system. If there is no effective collection/enforcement, then these former students won't pay even if they are making tons of money. The only answer here is tougher collection.

3. These inconvenient truths apply even if we don't look at all at for-profit colleges (the bogeypeople for any analysis -- the ones that supposedly defraud innocent students). I'm looking solely at the default rates for public colleges and private, non-profit colleges.

4. What we absolutely don't need is more "consumer protections". We need to stop sending people to college if they can't develop earnings power. And we need to go after voluntary deadbeats (those who can pay but don't) much harder.

Though, is essay typer saying students should be deprived of an education because they can't make enough money on the back end? No way. People deserve a quality education and not to have to be sentenced to working at Walmart for the rest of their lives...

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Micki Gomez

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