Deep into this recession, we know that an increasing number of people can no longer pay their mortgages, their credit card balances or their car loans. Now throw into the mix the rising number of defaults on student loans.
The percentage of those loans in default grew to 6.7, up from 5.2 percent in 2006. The figures represent borrowers whose first loan repayments came due from Oct. 1, 2006, to Sept. 30, 2007, and who defaulted before Sept. 30, 2008, according to the U.S. Department of Education.
In other words, the department reported, nearly a quarter-million student-loan borrowers went into default during that year.
This latest statistic didn't get a lot of notice in most major newspapers when it was recently announced. But this disturbing trend is worth more than a paragraph or two. While the administration continues to try to find ways to fix the financial industry and health care, there has to be more focus on curtailing what has become for too many the crushing cost of getting a higher education. Without that education, many people won't be able to get well-paying jobs. And without better jobs, they risk eventually becoming part of this nation's underemployed or unemployed.
Student-loan defaults have been relatively low since hitting their peak of 22.4 percent in 1990. Then, nearly one in four borrowers defaulted, according to the Department of Education.
The rate dropped to a record low of 4.5 percent in 2003.
So at 6.7 percent, things aren't as bad as they once were, yet they're not as good as they should be. But the default rate tells just part of the story. With wages depressed and housing and health-care costs high, even those who can keep up with their monthly student-loan payments are stretching their education loans out for decades.
How bad is it?
Go to StudentLoanJustice.org and read the stories of "victims" living under crushing student loans. Also go to http://www.defaultmovie.com and watch the poignant trailer from "Default: The Student Loan Documentary." The feature-length film chronicles the stories of borrowers who, years after leaving school, are trying to repay loan balances that have ballooned to two or three times the amount they borrowed.
For so many, the heavy borrowing is unsustainable, and there are a number of efforts underway to call attention to the student-loan sinkhole.
