College Student Loans Skyrocket Essay example - 747 Words

If youre counting on government student loans to get you through college or graduate school, count on paying them back. The Education Department has become one of the toughest debt collectors around. Over the past decade, the agency has steadily expanded its arsenal for dealing with former students who dont repay. A 1998 change in federal law made it extremely difficult for people to escape student loans through personal bankruptcy. The Education Department also can now seize parts of borrowers paychecks, tax refunds and Social Security payments without a court order, a power similar to the IRSs. Access to a government database of newly employed workers has enabled the department to make much more effective use of private collection†¦show more content†¦And they say students are usually financially unsophisticated borrowers, lacking an understanding of how debts can pile up. The Education Department responds that taxpayers, legislators and the many students who do repay their loans all expect it to pursue those who dont. It says the federal government, the state agencies that administer the program and the private lenders that primarily make the federally guaranteed loans all work with delinquent borrowers. They offer counseling and a chance to refinance at todays low interest rates. The governments toughness traces back to the 1980s, when politicians became alarmed by high levels of student-loan defaults. Today the default rate on recently made loans has dropped. It was 5.2% last year, down from 22% in 1990. Studies show that those most likely not to repay are students who, for whatever reason, didnt complete their studies. Federally guaranteed student loans began with President Johnsons quot;Great Societyquot; campaign. Now two-thirds of students at private four-year colleges have them, averaging $17,000 at graduation. Students who go on to private professional schools end up owing an average of almost $74,000. Loans outstanding have tripled over the past decade to $357 billion. Though the U.S. government makes some of the loans directly, most are made by private lenders such as banks, with the government guaranteeingShow MoreRelatedMaking College More Affordable For Students1000 Words   |  4 PagesMaking College More Affordable For Students The continuous rising cost of higher education is frequently spoken about today and deserves much more attention then it receives. College tuition for students is a rather large investment and considered to be one of the most expensive to make. As college tuition prices are continuously increasing so is the cost of housing. The average American family is finding it more and more difficult to be able to have a fair shot at affording to go to college. 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