The Cost of Opportunity

commoditiesWe’ve all heard it so many times that we don’t even notice it anymore:  Education is a commodity.  College is an investment in your own human capital. Students are consumers, savvy individuals who bear the risks and rewards of their own investments.  Student loans are the cost of opportunity.

But this familiar “Education is a Commodity” refrain is not a benign turn of phrase.    Using the language of the market to describe higher education is driving the disastrous rise in student debt.

Why?  Because we can draw a direct line between Continue reading

Defaults rise, by any measure

The Department of Education has released the most recent numbers for federal student loan default:  “The national two-year cohort default rate rose from 9.1 percent for FY 2010 to 10 percent for FY 2011. The three-year cohort default rate rose from 13.4 percent for FY 2009 to 14.7 percent for FY 2010.”

The Department is in the midst of changing the time frame in which it measures default, from a two- to a three-year window.  Under the new measure, 14.7% of the students whose loans entered repayment between October of 2009 and September of 2010 defaulted before the end of September of 2012.  This means that around 600,000 student loan borrowers (out of a cohort of 4 million) defaulted.  The consequences of default are severe and can be disastrous for students and their families.

The Huffington Post points out that these default numbers are only one component of an increasingly troubling picture, noting that “about $52 billion in student loans that had been current became delinquent in the first half of the year, the highest first-half total recorded since 2003.”