Sunday’s Last Week Tonight delivered a 16 minute tongue lashing directed at for-profit colleges and their role in the student debt crisis. The schools have been at the center of a congressional investigation and have been called into question by the media and the public for their recruiting tactics and student loan practices. Host John Oliver didn’t hold back in his recap of the situation.
Over 67 percent of college seniors had taken out student loans as of the 2011-12 academic year, according to The National Center for Education Statistics. That same year, the student loan default rate reached 10 percent. Obviously, no one enters school planning on defaulting on their student loans – defaulting can ruin your credit, impacting everything from your ability to get a mortgage or a car loan to getting hired for your dream job. PayScale's College Salary Report shows how college choice affects ability to earn enough to pay back loans; to help students avoid common mistakes when taking out their first loans, we spoke via email with Anne Del Plato, Regional Director for U-fi Student Loans.
A bipartisan effort addressing the student loan crisis is underway with new legislation aimed at making payments more manageable and reducing defaults. The Dynamic Repayment Act was introduced in the Senate last week by Senators Marco Rubio (R-Fl.) and Mark Warner (D-Va.). Struggling borrowers are no doubt hopeful about possible relief, but no one should hold their breath. Congress will still have to approve.