(democracynow.org)
Bad news for students taking on more debt for an education: Defaults are rising, too.
Lawmakers in Washington have been sounding the alarm over the amount of student debt individuals are able to take on.
A report issued Thursday goes a long way to showing why.
The number of defaults on student debt have risen substantially over a 10-year time frame, according to research issued by the Brookings Institution, which incorporates data from the Federal Reserve.
Prices for a college or a graduate degree have soared. Student debt recently crossed the $1 trillion mark, according to separate data from the New York Federal Reserve. Student debt has now surpassed every form of debt in the US that is not a home loan.
According to another chart from Brookings, using Treasury data, students taking on debt aren't doing it for an education in Berkeley or Cambridge. They are taking on debt for courses at for-profit online universities — notably the University of Phoenix, whose students were responsible for just $2.1 billion in debt in 2000. It has since watched enrollment grow and total outstanding loans by its students soar to more than $35 billion.
It's part of the reason why a number of lawmakers on both sides of the aisle in Washington banded together to introduce legislation that would have, among other things, created a cap preventing people from borrowing more than $30,000 annually or $150,000 in full to finance schooling.
Universities were unsurprisingly pretty peeved at the idea.
The legislation is still awaiting action in Washington.
Here's the chart that highlights how much the defaults have risen. Since student debt has only increased in the time since Brookings' study stopped tracking education lending, it's unlikely this problem has resolved itself.
(Federal Reserve data highlighted by the Brookings Institution)
Data show student debt defaults have increased substantially since 2001.
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