Student Loans: When President Obama came into the White House eight years ago, he promised a "New Era of Responsibility." It didn't work out that way, particularly for student loans, leaving President Trump with a huge mess to clean up.
In fact, when it comes to borrowing for college, students are being utterly irresponsible.
A recent survey by LendEDU of 500 current college students found that 49.8% of them think that the federal government will forgive their loans after they graduate.
"In reality," LendEDU's Mike Brown notes, "a very small percentage of graduates will even qualify for Public Service Loan Forgiveness. It is worrisome that current students may be over-borrowing on the hope that their student debt will be forgiven in the future."
Worrisome, indeed, particularly given that the amount federal student loan debt is currently $1.3 trillion, and rising fast.
Of that, $31 billion is seriously delinquent — meaning that debtors are at least 90 days past due on their payments. In fact, at 11.2%, the delinquency rate on student loans is 57% higher than credit card debt, and nearly four times the rate of all loans combined.
For the most part, it is President Obama who is to blame for this mess. One of his first actions as president was to nationalize the student loan program, cutting out private lenders and instead having the government lend directly to students.
As a result, direct lending went from 21% of federal student aid in 2009 to 73% today, and the total amount of student loan debt on the federal books doubled in eight years.
At the same time, Obama made it easier for students to avoid paying back the full cost of those loans, and repeatedly spoke as if students were victims who deserved to be protected from their own debt. In fact, Obama's "reforms" of student lending became widely known as the "Obama Student Loan Forgiveness" program.