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Student Loan Defaults Hit $121 Billion; 40% 0f All Borrowers Not Making Payments


Students are told they need a college education to get ahead, then are given all the loans they need to get their degree. Right. The dream was a farce all along, and the students fell for the scam. Just another way to keep the serfs in poverty, and subjugated. – Shorty Dawkins, Associate Editor

This article comes from

by Victor Skinner

DETROIT – Federal student loan defaults have hit an astounding $121 billion, with about 40 percent of all borrowers not currently making any payments, according to a government report.

“This is a slow-moving disaster,” Jason Delisle, director of the Federal Education Budget Project at New America, told the Detroit Free Press. “Why no hearings on Capitol Hill? Why isn’t the administration talking about it more?”

The U.S. Department of Education highlighted the report in a self-congratulatory news release about an increase in the number of students who are enrolling in income-based repayment programs. In December 2015, there were 4.6 million borrowers using income-based repayment plans, which represents a 48 percent increase from the year prior, and a 140 percent increase from two years ago, according to the news site.

“Today’s analysis suggests that the administration’s efforts to help struggling borrowers are having a positive impact,” U.S. Education Secretary John King Jr. said. “While we see promising signs of progress, we know we have to work to do to ensure that every borrower in distress has a clear path to avoid default. And I will continue to fight to ensure that students have access to an affordable education that helps them get ahead, rather than drowning in debt.”

Many folks, however, simply don’t have the money to make their payments, the Free Press reports.

Detroit 26-year-old Gail Menesko told the news site a divorce forced her to quit cosmetology school to care for her two children, and it’s been nearly a year since she made a payment on her student loans.

“I want to pay, but other things are a priority now,” she said.

Menesko is now in default, a category reserved for borrowers who don’t make a payment in more than 270 days.

“Twenty percent of all federal load borrowers have defaulted on their loans, according to new data released by the federal government last week,” the Free Press reports. “That translates into $121 billion of loans in default. That same data show 40 percent of all borrowers are not making any payments, and are in some sort of forbearance, delinquency or default.”

Market Watch highlighted other interesting threads in the federal student loan data.

“Despite more programs available to federal student loan borrowers to manage their loans, borrowers are still struggling. In fact, between October 1 and December 31, 2015, private debt collection companies hired by the Department of Education garnished more than $176 million in wages from defaulted student loan borrowers in order to pay back their debts …,” the news site reports.

“These are people who can’t afford to pay their student loans and they’ve garnished $176 million in three months from them,” Chris Hicks, a student debt researcher and consultant for progressive organizations, told Market Watch. “You have to wonder what conditions people are living in when they’re seeing that much of their wages garnished.”

In more extreme cases, debt collectors hired by the federal government have used the U.S. Marshals to arrest student loan defaulters and haul them into court to answer for their debts.

Houston resident Paul Aker told Fox 26 he was arrested at his house in February by Marshals in full combat gear, who dragged him to a federal court building over an unpaid $1,500 student loan debt from 1987.

And source with the Marshals office told the news site Aker’s arrest is just the beginning.

“I was told by sources with the U.S. Marshals Service that they have 1,200 to 1,500 more arrests right here in our community that they will make for old student loan debt,” Fox News reporter Isiah Carey said


Shorty Dawkins




    There’s plenty of articles insulting young people and maligning the morality and work ethic of an entire generation. Nobody taught them that you could do all the right things and not get paid enough to keep a roof over your head. One young man got kudos for paying off his loans by living out of his vehicle. Especially not safe for females. Besides, it’s illegal, unwanted and prosecuted.

    Student loan debt is 45 percent of total government assets. This factoid is all over right now. The young know that they are being forced to compete in a global market where most of their competitors have zero or very little student loan debt. That’s their attraction to the Bern.

    1. I’m not interested in character assassination of the victims. It was already years ago that a minor child won a Reader’s Digest scariest thing cartoon contest depicting student loan debt. Reports of SWAT and US Marshalls being used to arrest non-payers have been filtering out to the public for years now. The youth that have the option to stay with family until the loan is paid are both smart and lucky. Perhaps the “pathetic generation ” is the one that refuses to see what we have allowed to be created for our youth.

  2. Student Loans are Indorsed in Blank and Are Uncollectable

    According to the Federal Register, student loans are securitized
    which means that student loans were sold or are pooled with other
    student loans endorsed into a trust. These trusts are called asset
    backed securities.

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