Katie LaPotin, Red Alert Politics, October 2, 2013
Calling the student loan debt crisis a “threat to the American dream,” Department of Education Secretary Arne Duncan announced Monday that he plans to focus extensively on the Obama administration’s plan to create a college rankings system according to the school’s “value for the educational dollar” – despite the fact that the number of recent college students who have defaulted on their federal student loans is the highest it’s been in almost two decades.
Duncan made his remarks during a speech at the National Press Club, adding that he believes the administration’s new ranking system will help keep costs down and increase access to schools.
“One of the real barriers right now is college cost,” Duncan said during a speech at the National Press Club. “Everywhere I go hardworking parents are saying college costs are just crushing them.”
According to the National Center for Education Statistics, as cited by The Washington Times, the total annual tuition room and board rates for full-time undergraduate students increased six fold between 1981 and 2011. That jump has likely contributed to the fact that a full one in ten college students defaulted on their federal loans in fiscal year 2011, an increase of nearly a full percent, according to a press release from the DoE issued Monday. Moreover, 15 percent of college students with federal student loans went into default during the first three years they were required to make payments on the loans, which can ultimately lead to invasive debt-collection methodsincluding fees, wage garnishments and withheld Internal Revenue Service tax refunds being taken for those individuals.
“The growing number of students who have defaulted on their federal student loans is troubling,” Duncan said in the release. “The Department will continue to work with institutions and borrowers to ensure that student debt is affordable.”
According to the DoE, there are nearly 39 million student loan borrowers responsible for more than $1 trillion in federal student loan debt. The average borrower today now carries more than $26,000 in debt, a 43 percent increase over the past six years. As a result, the Obama administration is on pace to turn a record $51 billion profit this year from student loan borrowers – which is about the same as the combined net income of the assets at the nation’s four largest banks.