The Washington Post reports on what many have recognized for some time as a ticking time bomb:
A new analysis of federal student loans reveals the number of people severely behind on repaying their debt has soared in the last year, painting a bleak picture of one of the largest government programs.
The Consumer Federation of America released a study Tuesday that found that millions of people had not made a payment on $137 billion in federal student loans for at least nine months in 2016, a 14 percent increase in defaults from a year earlier. The consumer watchdog used the latest data from the Education Department, which manages $1.3 trillion in federal student debt owed by 42.4 million Americans.
One fundamental problem is that young people have fared poorly in the Obama economy, with its snail-slow growth. Still, some seem surprised:
“Despite a rising stock market and falling unemployment, student loan borrowers are still struggling,” said Rohit Chopra, a senior fellow at CFA and former student loan ombudsman at the Consumer Financial Protection Bureau. “The economy remains very difficult for so many young people just starting out.”
Donald Trump and the Republican Congress are trying to fix that, but it will take some time. In the meantime, student debt defaults seem sure to grow. Can demands for bailouts be far behind? I doubt it.