We are now seeing how fast this kind of pushing of “free” federal money can blow up and explode. Two articles in the Huffington Post (March 27, 2015 here and August 20, 2014 here) collect the data. First, the upward march of loans outstanding continues unabated, reaching $1.096 trillion as of June 30, 2014 (and undoubtedly well over $1.1 trillion today).
And how much of that will ever be paid back? You almost can’t believe how fast this is going south. According to the August 2014 post (citing Education Department data as of June 30, 2014), the delinquency/default rate had reached 18%. Oh, but with another 34% in deferment, forbearance or bankruptcy, meaning that of those supposed to be repaying, almost 27% were in default. Then in late March 2015 the Department released a new set of numbers on the performance of its largest loan servicing contractors. The new data are not completely comparable to the prior data, omitting about a quarter of the universe, and counting as delinquent anyone more than 5 days behind on payment, while the old data required 30 days to be counted as delinquent. With that said, the new delinquency figure is 33%. 8.5% to 33% in barely two years!
And we haven’t even gotten to the question of whether you can trust any number coming out of this crooked government.
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