Student loans at a record high delinquency

SocratesPost is always on the frontlines scouring the news for relevant updates in the college admissions landscape. We look for anything that can help shape our understanding of the latest trends in admissions and help our readers see the direction in which we’re moving.

Questions we explored this week:

  • Will the government start taking student loan repayments straight out of your paycheck?
  • Student loans rose to a record high delinquency this quarter. What’s to blame?
  • A mom is worried that college admissions is rigged against her white, upper-class son. What should she do?

Feb. 13, 2019 — We might see student loan repayments taken out of paychecks in the future.

  • What? GOP lawmakers are proposing wage garnishment to repay student loans.
  • Why? Student loan balances have swelled to an average of $30k, up from just $10k in 1990. Delinquencies are at a record high of $166 billion. Students loans are expected to rise to $22 trillion by 2022.
  • What this means: If you or your kid is considering taking out student loans, think about whether or not the cost of college tuition is worth it. Would your child’s proposed career pay enough to cover those costs? Consider the cost of colleges before accepting an offer. If you need financial aid, would applying Early Decision hurt your child’s chances of getting most grants and scholarships?

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Feb. 16, 2019 — Delinquent student loans climb despite drops in unemployment rate.

  • What? Delinquent student loans rose to a record high of $166 billion last quarter.
  • Why? Rising tuition costs, inflation, and stagnant wage growth. When given the choice, people will pay rent before repaying student loans. Many student loans, especially federally-backed loans, do not count toward debt-to-income ratios when securing a mortgage.
  • What this means: A deepening federal deficit may mean less funding in other areas of social need. A college degree is no longer a guaranteed good return on investment. If you’re dead set on going to college, ask if a college education is needed for what you want to do. Ask if you are only going to college because your family has done it for generations, your peers and friends are doing it, and you feel like you “should.”
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Feb. 18, 2019 — Instead of trying to convince your kids that college admissions are rigged against them, ask what frustrates him about college admissions.

  • What? A mom wrote into a Dear Therapist advice column in The Atlantic, concerned about college admissions working against her privileged white son. A therapist tells her to stop telling her kid that the process is unfair against him and seek factual information. Then, she should show curiosity and learn what challenges her son is experiencing so she can best address them.
  • Why? Children internalize their parents’ and peers’ reactions to the happenings around them. Should this mom continue, her son may be at risk of starting his adult life believing the world is out to get him. By seeking factual information, the mom will learn to separate truth from her reactions and help her son understand that her “worst case college decision outcome” is really not so bad.
  • What this means: Parents like this mom are cracking under the pressure of college competition. When they can’t help their child and feel out of control, some parents start blaming the system, As a former college consultant, I saw this too often. I worked with many kids who had no problems with the college admissions process and got excited about the colleges they liked. Then their parents swooped in with judgment, concern, and disdain toward their kids’ competition and the admission system. If you’re a reader with college bound children, examine how your reactions to the college application process may be helping or hurting your kids.
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