Today’s post is essentially a transition piece that we believe tightly and logically links back to our immediately preceding post on student loan debt. In our entry dated March 12, we noted that “loan payback amounts sometimes loom as lifelong obligations for select borrowers.” Those obligations can seem far more onerous, we remarked, when authorities can seize tax refunds from borrowers who are behind on their loan repayments.
Indeed, there is no way to minimize or otherwise sugarcoat the dire degree to which hefty student loan obligations are dragging millions of American consumers down. Stories proliferate about loan exactions that saddle debtors for decades. A recent media article on the student loan crisis notes that “tens of thousands of seniors in 2013 were forced into poverty.” Reportedly, many active-duty military members have been victimized by scamming lenders over many years. It is estimated that delinquencies on federal loans currently stand at close to 17 percent.
Here’s what is ominous: While high numbers of people in Texas and across the country are grappling with education-related loans, they are forgoing home purchases and opting against spending money elsewhere in an economy that needs to be primed by their monetary input.
Policymakers and business executives know this and are increasingly engaging in reform-minded rhetoric.
Advocates for change centrally include President Obama, who has called the opportunity for affordable education his “personal mission.” The president has recommended a number of reform recommendations to drive down costs and ease the burden on student borrowers.
One potential area of study is reform of the country’s bankruptcy laws, that is, tightening of restrictions on discharging student debt through bankruptcy filings. That possibility has been suggested by the federal Consumer Financial Protection Bureau.
We will be sure to keep readers timely apprised of material developments regarding student loan reforms.