Student Loan Debt Passes $1T
Figure much higher than expected
By Kevin Spak, Newser User
Posted Mar 22, 2012 8:26 AM CDT
Rep. Joe Courtney joins students and activists to announce the collection of over 130,000 letters to Congress to prevent student loan interest rates from doubling this July, March 13, 2012.   (AP Photo/Manuel Balce Ceneta)

(Newser) – America's student loan debt is a lot higher than previously believed, a fact that may create a drag on the economy for years to come, according to a new report from the Consumer Financial Protection Bureau. Total debt passed $1 trillion late last quarter, officials told a banking conference in Austin yesterday, making it 16% higher than an earlier estimate from the Federal Reserve Bank of New York, the Wall Street Journal reports.

Officials blamed the surge on increased college enrollment, which is due in part to the weak labor market, and tuition hikes, which can partly be traced to cuts in state funding. The interest rates on existing loans are growing as well, because as many as one in four student borrowers have fallen behind on their payments. The findings are particularly troubling for the housing market, because debt-laden young people are less likely to buy their first home.

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FirstObserver
Mar 23, 2012 8:20 AM CDT
When I was young, 45 years ago, I went to university to get an education. I paid for it by working and denying myself a lot. Every dime I made went into the savings account. I was awed by my teachers and their titles of Dr. and professor. 30 years later I HAD to go back to school and take some classes that left a very bad taste in my mouth. As an adult I wasn't so impressed with the experts and felt if I were shopping in a store, I would not buy the product. It was highly overpriced for what I was getting. Higher education is a racket. It is almost an incestuous relationship between the government and the schools. If you remember Eisenhower saying, "Beware the military-industrial complex," you will understand my opinion.
Plato
Mar 22, 2012 5:17 PM CDT
I apologize for giving you an account from ancient history. I was born raised on a cotton farm in the Mississippi Delta, I worked summers for a lumber yard and and saved to go to MS State University, graduated from High School in 1953. I had a $1,000 saved and in the bank. I graduated with a Civil Engineeing degree in 1957. I worked and saved every summer plus took Army R. O. T. C. which paid me $28 a month. When I finished I did not have any money, but I did not owe anybody any money either. My generation was the last generation of The Victorian Age. Somethings that were possible to do back then are impossible to do today. Hell, a history lesson ain't going to hurt you.
fractal
Mar 22, 2012 1:36 PM CDT
Student loan program went to hell with Reagan, who sold it to the finance industry. One of my schools totally screwed up my student loans---their fault. My loans became due while i was still in school, because my financial aid office screwed up the number of hours I needed to stay a full time student. School refused to deal with it, saying they had mis-advised me verbally, not in writing, so it did not count--they admitted being afraid they would be held responsible for the money. Called Dept of Education, and they just gave me the runaround for weeks, and kept transferring me to the private companies who collect the loans--who could do nothing about it, except scream that they didn't care, they just wanted their money. All that needed to happen was to have Dept. of Education admit that a technical mistake was made by the school, nullify it, and bring the process back to order. Do you know there was NO ONE in the whole Dept. of Education who could do this? At least no one that they would ever transfer me to---I am sure if I knew a Senator , things would have been straightened out right quick. And this was in the days before answering machines and cell phones, so all business had to be conducted long distance on pay phone---because I was always at school. It has been an ongoing nightmare for thirty years---thought I had it all taken care of finally; the fuckers sent me ANOTHER form to fill out last week. Ruining my credit was the least of my problems with them. And they will never get a penny from me.