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BY: Bill McMorris
More than one-in-three borrowers who have defaulted on their student loans did so without ever attempting to make a payment, according to a new report.
Record - Percent - College - Students - Loan
A record 11 percent of the 44 million former college students with outstanding loan debt now sit in default—far beyond the 8.6 percent peak in mortgage defaults at the height of the housing crisis that caused the Great Recession—according to the Student Loan Report. Nearly half of all those in default, 48.6 percent, said in a survey that they never obtained a college degree, while 33.8 percent have not made a single payment on their debt.
The majority of those in default have more than one student loan outstanding with 11.2 percent saying they have four or more debt payments to make.
Majority - Respondents - Default - Inability - Job
The majority of respondents said they entered default because of their inability to find a good-paying job (30.85 percent), lost their job (22.62), or lived in communities with high living expense (28.52 percent). Just 39 percent of the defaulters said they had full-time jobs.
"The most common problems stem from either not working or getting laid off. Furthermore, a large group said their living expenses were too high, leading them to miss student loan payments. These all point to income problems—whether it's too low or non-existent," the report says.
Student - Loan - Debt - Government - Terms
Student loan debt is now largely backed by the federal government and carries unique terms compared to traditional credit card or mortgage loans. It cannot, for example, be discharged in bankruptcy courts....
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