•   
  •   
  •   

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

01:50  11 september  2019
01:50  11 september  2019 Source:   finance.yahoo.com

False alarm causes terrified passengers to flee airport, run onto tarmac

False alarm causes terrified passengers to flee airport, run onto tarmac A flight attendant sounded an alarm causing an evacuation.

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

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

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.”

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.

Copyright © 2019 Apple Inc. All Rights Reserved.

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.

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.”

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.

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.

Student loan experts sound alarm on ' trillion - dollar blackhole '. Yahoo Finance. Bill Clinton on Trump impeachment inquiry: ‘It should be looked into’. Expert : 'I’m not so sure that I trust government' on student loans .

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.

'Brazen act of lawlessness': Inside Education Department's effort to 'obstruct' student loan probes

'Brazen act of lawlessness': Inside Education Department's effort to 'obstruct' student loan probes A letter by a top adviser to Education Secretary Betsy DeVos reveals how the department has prioritized student loan servicers over student borrowers, consumer advocates say.

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

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

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.

Read more:

  • Student loan official who resigned: CFPB has been a ‘complete failure’ over the last year

  • 'Severely derogatory': U.S. student debt defaults have 'grown stunningly'

    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.

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

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

  • Dimon: U.S. student loan debt is ‘now starting to affect the economy’

  • Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance onTwitter,Facebook,Instagram,Flipboard,SmartNews, LinkedIn,YouTube, andreddit.

Read More

UNC Charlotte shooting survivor vents frustration over gunman sentencing .
UNC Charlotte shooting survivor Drew Pescaro took to Twitter to vent his frustration over the gunman's plea deal and sentencing on Thursday. The gunman pleaded guilty for the April 30 rampage that killed two students and hurt Pescaro and three other students. The plea was part of a proposed deal that would spare the gunman's life, a family member told NBC Charlotte Wednesday. He was given two life sentences. Pescaro started talking about the plea deal on Twitter Wednesday night and alluded to the gunman's motive which was made public on Thursday."Now let me create a scenario for everyone.

—   Share news in the SOC. Networks

Topical videos:

usr: 3
This is interesting!