US: Student loan experts sound alarm on 'trillion-dollar blackhole' - PressFrom - US

USStudent loan experts sound alarm on 'trillion-dollar blackhole'

01:50  11 september  2019
01:50  11 september  2019 Source:

AOC slams Republicans, reveals how much she owes in student loans at hearing: 'This is our job'

AOC slams Republicans, reveals how much she owes in student loans at hearing: 'This is our job' Rep. Alexandria Ocasio-Cortez, D-N.Y., slammed Republicans after she revealed she owes nearly $20,000 in student loans at a House Financial Services Committee hearing on college debt Tuesday, according to a report. © Provided by Atlantic Media, Inc. AOC has questions about the Phillips Curve “I’m hearing people on this committee say it’s not our job,” she said, referring to Republicans, according to the New York Post. “This is our job.” The committee was discussing how to bring down the estimated $1.5 trillion in student debt owed in the United States.

Student loan experts sound alarm on ' trillion - dollar blackhole '.

Melissa Block speaks with Mark Kantrowitz, a student loan expert and publisher of for a primer on student loans and repayments. The nation's student loan debt burden is massive. It now exceeds a trillion dollars . That's more than the nation's credit card debt.

Student loan experts sound alarm on 'trillion-dollar blackhole'
Student loan experts sound alarm on 'trillion-dollar blackhole'
Student loan experts sound alarm on 'trillion-dollar blackhole'

Student loan experts warned the House that the student debt crisis is now a “trillion-dollar blackhole” and was hurting the financial system.

“Every 28 seconds, another borrower defaults… like kerosene on a fire, student debt is … tearing our country apart,” stated Seth Frotman, former student loan ombudsman and the executive director of the Student Borrower Protection Center. “We cannot continue to be lobbied into believing that the companies getting rich off the misery of millions of Americans are not part of the problem… [and] the trillion-dollar black hole in our financial markets.”

AOC makes student loan payment during congressional hearing on loans

AOC makes student loan payment during congressional hearing on loans Rep. Alexandria Ocasio-Cortez used her bank account to make a point during a House Financial Services Committee hearing on student debt. Ocasio-Cortez opened her remarks by telling the witnesses and audience that she had made a student loan payment while attending the hearing. "I literally made a student loan payment while I was sitting here at this chair, and I looked at my balance, and it was $20,237.16," she said. "I just made a payment that took me down to $19,000 so I feel really accomplished right now." © Provided by USA TODAY, a division of Gannett Satellite Information Network, Inc.

James Dimon, CEO of J.P. Morgan Chase, warns that the fast-growing auto loan market may not remain a bright spot for long. The head of the nation’s largest bank by assets said that the trillion auto- loan market, which has grown along with the economy, falling unemployment and a recent

Trillion - dollar deficits will make it harder for Congress to fight the next recession by borrowing more. "This is pretty much unprecedented that we're seeing this level of debt expansion so late in the economic cycle," Gundlach said. He complained that the explosion of debt doesn't even address

Frotman, who made the comments during a hearing with the House Committee on Financial Services on Capitol Hill, was also accompanied by other panelists who also highlighted the difficulties student borrowers were facing — whether they had federal or private loans.

There is presently $1.5 trillion in outstanding student loans and around 11% of them are more than 90 days delinquent. In the second quarter of 2019, student loans comprised of 35% of those in the severely derogatory balance.

“Patriot Act” host and former “Daily Show” correspondent Hasan Minhaj, who was also invited to join the panel, also noted in his opening comments: “This issue is sidelining millions of Americans, people are putting off marriage… retirement.”

Federal student loan forgiveness program rejects almost everyone, again

Federal student loan forgiveness program rejects almost everyone, again WASHINGTON - Americans who spend at least a decade in public service jobs and faithfully make their federal student loan payments shouldn't owe any more. That's the idea behind a student debt forgiveness program the Education Department launched under President George W. Bush. The first batch of teachers, nurses, military personnel and other public servants got to start applying for forgiveness two years ago, and the department - led by President Trump's appointee Betsy DeVos - rejected nearly 99% of them. The department said more than half of them were denied for not having 10 years' worth of qualifying payments.

Household debt has been rising for the past three years, but it is student loan debt that has by far the most delinquencies. And that's troubling for the future of economic growth, New York Fed President William Dudley said in a speech Monday. According to the New York Fed's quarterly report on

The Unintended Consequences of Student Loans . SocietyCommentary. The new deal is “approaching a quarter of a trillion dollars in discretionary spending increase in one year,” Jordan said, “and we are going to run almost a trillion - dollar deficit, so this is just not what the American people

Bringing it back to the private industry

Both sides disagreed on a fix to the crisis, with many Representatives floating the idea of bringing student loans back to the private sector as a solution — reversing the move former President Obama made in 2010.

Representative Patrick McHenry (R-NC) was the first to make that argument.

“It is a consequence of Democrat policies that have nationalized student debt lending… we’ve saddled a generation with unaffordable debt, and an education that does outmatch the cost of that education,” said Rep. McHenry. “The largest consumer lender in the nation, we don’t adhere to the same laws that we demand of the private sector… the federal government must become a responsible lender.”

But privatizing all the student loans in the federal government's hands wasn’t going to fix everything, one panelist noted.

During her testimony, Persis Yu, a staff attorney at the National Consumer Law Center, asserted that the student loan system is generally “biased, secretive and lawless.” She added that even when the loans were private, forced arbitration causes causes stop the borrowers from going to court.

Education Department rejected 99 percent of applicants for student loan forgiveness program

Education Department rejected 99 percent of applicants for student loan forgiveness program The U.S. Department of Education accepted just one percent of applications in the first year of a revamped student loan forgiveness program, according to a government watchdog report. © ASSOCIATED PRESS FILE - In this Sept. 17, 2018, file photo, Education Secretary Betsy DeVos speaks during a student town hall at the National Constitution Center in Philadelphia. One of the nation's largest teachers' unions sued the U.S. Education Department on Thursday, July 11, 2019, over a federal program that promises to forgive student loans for public workers but has been beset by problems.

With the increase in student debt, we can’t keep ignoring the long-term effects it’s having on people’s ability to build wealth. For the second quarter of 2018, outstanding student loans hit .53 trillion , according to the Federal Reserve. This won’t come as a surprise to the many people struggling to

Another round of alarms sounded in the trillion - dollar student loan crisis when the Illinois Attorney General accused two student loan debt settlement firms of scamming borrowers. Illinois Attorney General Lisa Madigan sued First American Tax Defense and Broadsword Student Advantage, two

While the course of action was hotly debated — from addressing the rising cost of college tuition fees, privatizing student loans, improving transparency to even claiming that the crisis wasn’t in the committee's jurisdiction — House Committee Chairwoman Maxine Waters (D-CA) stressed the urgency of the situation.

“This crisis is affecting people across the country and ultimately it negatively affects our entire economy,” she stated.

“I literally made a student loan payment while I was sitting here… and I looked at my balance and it [was] $20,237.16,” Rep. Alexandria Ocasio-Cortez (D-NY) stated towards the end of the hearing. “And just made a payment … I feel really accomplished right now.”

Ocasio-Cortez added that student loan servicers were predatory, and were “setting people up to fail.”

Aarthi is a writer for Yahoo Finance. Follow her on Twitter@aarthiswami.

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