Student Loans Cripple Entire Generation

Nation's economy creaks under $1T in student loan debt
By Neal Colgrass,  Newser Staff
Posted May 13, 2012 2:57 PM CDT
A tourist photographs the Memorial Church at the main campus of Harvard University December 19, 2000 in Cambridge, MA.   (Getty Images)
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(Newser) – Wannabe college students have a lot to prepare for: all-night study binges, grueling exams, and the three jobs they'll need to pay off their crippling student debt. What's worse, that financial burden is only growing, the New York Times reports. Today, just 38% of the nation's $1 trillion student loan debt is being paid off, and the default rate has recently doubled. “I’ll be paying this forever,” says a 24-year-old dropout with $70,000 in student loans. “For me to finish it would mean borrowing more money. It makes me puke to think about borrowing more money.”

State governments are partly to blame for reducing assistance to public colleges, which then raise their rates—and gloss over the numbers when pitching to prospective students. President Obama has helped somewhat with more grants and loans, and Congress has kept rates down. But the sky-high debt resembles that of the mortgage crisis, says one expert, who likens for-profit colleges to the nastiest of subprime lenders: “If you are looking at highway robbery and raping and pillaging, that is true," he says. "But there are all kinds of unfortunate practices in traditional higher education that are equally as problematic that are reaching the crisis point.”

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