The Government Doesn't Know How Much Its Student Loans Cost

Accountability

Photograph by Pablo Martinez Monsivais/AP Photo

Depending on whom you ask, the government either makes tens of billions of dollars on the backs of student borrowers, or more or less breaks even. The debate, which boils down to the arcana of accounting techniques, was hotly contested last year, with Democrats like Sen. Elizabeth Warren decrying how the government "profits" off student loans. The controversy caused Congress to ask the Government Accountability Office to weigh in, which led to a report released today. The GAO came back with a non-answer, finding there's no good way to know how much the government spends or makes on funding student loans.

The GAO said it could take as long as 40 years to know the true costs of the program because there are so many variables, from the overall interest rate environment to how many students take advantage of different repayment options. In the meantime, the government is stuck using estimates that can vary greatly based on several factors, most importantly how much students pay in interest and what it costs the government itself to borrow. Each year, the government readjusts its models based on more recent data, which can lead to highly volatile results. One year, the budget assumed loans taken out in 2008 made the government $9.09 per hundred dollars borrowed. The next year, it estimated the very same loans instead cost the government 24 cents per hundred dollars.

One figure is pretty clear: how much the Department of Education spends administering the loans. That's jumped from $314 million in 2007 to $864 million in 2012, reflecting changes in the federal program that removed banks as intermediaries and caused the number of loans directly issued by the government to increase threefold. Overall, the administration costs per borrower has stayed the same or even fallen slightly.

The overall difficulty in nailing down these estimates is an increasingly relevant problem, as student debt tops $1 trillion -most of it financed by the government.

Forgive Student Loan Debt: Five Years On

Five years ago this week I wrote an essay called, " Forgive Student Loan Debt to Stimulate the Economy," which I posted to a new group I had created on Facebook. To my great surprise, the essay wasn't just read by the ten friends I had expected, but by hundreds of thousands of people from all walks of life, cutting across generational, geographical and political lines.

The message was simple and resonated with a great number of people: rather than focus on tax cuts or more corporate welfare, why not try a new, bottom-up approach to stimulating the economy by forgiving student loan debt? Sadly, neither Congress nor the White House took this proposal seriously, and to be honest, it was written with tongue firmly planted in cheek; however, what I had written had the unexpected consequence of helping spark a true grassroots movement that continues to this day.

Within weeks of the essay, dozens of publications and news outlets were reporting on the proposal, with BusinessWeek dubbing me "a spokesman for a generation of people with student loan debt." It was a role I never sought but one I proudly assumed out of a sense of civic duty.

Over time, I used my new political clout to work with former Representative Hansen Clarke in crafting HR 4170, "The Student Loan Forgiveness Act of 2012." The petition I created in support of that legislation garnered nearly 1.2 million signatures, and Representative Clarke and I presented that petition to Congressional leadership at a press conference on Capitol Hill.

During the course of my advocacy on student debt, I met some incredible activists and organizers. Wanting to expand the reach of my advocacy, I teamed up with Natalia Abrams, Kyle McCarthy and Aaron Calafato to form StudentDebtCrisis.org.

Together, we at StudentDebtCrisis.org have continued to advocate for the more than forty million Americans who collectively owe more than $1.2 trillion in student loan debt. We've spoken at conferences, appeared in countless media reports about student debt, worked with Representative Karen Bass to reintroduce Hansen Clarke's bill in the new Congress as HR 1330, "The Student Loan Fairness Act of 2013," and spearheaded the #OutWithStudentDebt video project. Meanwhile, our artistic director, Aaron Calafato, tours the country with his one-man show, FOR PROFIT, depicting his time as an admissions counselor at an unnamed for-profit university.

We've also worked closely with progressive youth organizations like the Young Invincibles, Our Time, Generation Progress, Demos, MoveOn.org and many others. (Stay tuned for an important announcement on that front in the coming weeks!)

On January 28, President Obama gave his State of the Union Address and touched on this topic when he said:

We're shaking up our system of higher education to give parents more information and colleges more incentives to offer better value, so that no middle-class kid is priced out of a college education. We're offering millions the opportunity to cap their monthly student loan payments to 10 percent of their income, and I want to work with Congress to see how we can help even more Americans who feel trapped by student loan debt.

While StudentDebtCrisis.org agrees with the fundamental principles laid out in the president's speech, we believe that so much more needs to be done to address the existing $1.2 trillion in outstanding student loan debt. Because of this debt, more than forty million Americans are not buying houses or cars, starting businesses or families, or otherwise contributing to rebuilding the economy.

While I continue to believe that across-the-board forgiveness of student loans would represent a major boost to economic growth, let's face reality-it's a pipe dream in this political climate. That said, there's a whole host of reforms that Congress could undertake to dramatically improve the lives of those saddled with student loan debt.

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In addition to creating reasonable and fair repayment options for student borrowers, allowing borrowers to refinance their loans and restoring basic consumer protections-such as bankruptcy protections and statutes of limitations on the collections of student loan debt-we believe it's critical to bring defaulted borrowers back into the fold. As it stands, more than seven million Americans are in default on their student loans, and for them, there's simply no relief in sight.

Though I'm encouraged by the president's words, we desperately need action. Five years ago, I came up with one idea for how to tackle the ever-growing student debt crisis; now it's time for Congress and the president to work together to come up with real solutions that will have a real impact on the lives of student loan borrowers.

Read Next: Duke activists influence their school's endowment practices.

Why Banks Shouldn't Write off the Student Loan Market

As I read " Worrisome Spike in Student Loan Write-Offs" in the January 2, 2014 American Banker, I realized this data rich account told only part of the story. There is another dimension worth telling.

The "stubbornly high rate of student loan delinquencies" and write-offs cited in the story combined both private and federal student loans, which is like throwing apples and oranges in the same bag. It may work at the grocery store, but it doesn't make for a useful comparison.

Private student loans are an asset class that has been a solid performer. According to a TransUnion study of private student loans from 2007 to 2012, 90-plus-day delinquencies declined at the height of the recession from about 6% in 2009, to 5.33% in 2012. Federal student loans delinquencies, though, jumped from 9% in 2009 to 12.31% in 2012.

This data set was echoed by a comprehensive study conducted by MeasureOne, a San Francisco company that specializes in student loan data. The study examined the nation's seven largest active private student lenders and found that private student loans with 90-plus-day delinquencies peaked at the 2008-2009 recession and steadily declined by 49% even as the loans in repayment doubled.

As of the third quarter of 2012, only 3.89% of private student loans were seriously delinquent as measured as a percent of loans in repayment, and have declined to 3% in the third quarter of 2013, according to MeasureOne.

Private student loans are a well-performing asset for a number of reasons. They are subject to rigorous underwriting, and the student and parents must reapply with the lenders for the loan each year. The serial nature of student lending requires new applications with fresh credit pulls each year. A borrower can have their new loan request denied if their credit has dropped dramatically, preventing bad loans from continuing to be originated.

Federal loans typically lack a credit check and don't undergo serious underwriting—they are a needs-based decision. It is difficult to be turned down for a federal loan and the results of this sad reality are played out in the media in a weekly litany.

Most private loans have co-signers. MeasureOne, for instance, found that during the last four academic years, more than 90% of undergraduate and 75% of graduate private student loans included a co-signer. School certification has become standard practice as student loans—both federal and private—are now disbursed directly to the school. There are no more trips to Europe or motorcycle purchases on Uncle Sam's dime.

Beyond the hard numbers, though, there is a hard rationale to provide financing for college expenses since the cost of college keeps escalating. Total costs for a public university can range from $20,000 to $40,000 annually. A private university can range from $30,000 to $100,000. Federal loans cover only a fraction of this expense.

For lenders, financing college costs can be a means of attracting Gen Y customers—a demographic that has been cool to financial institutions in recent years. With a college degree they will earn considerably more than a high school graduate.

Gen Y — born between the 1980s and the year 2000 — is the largest generation in U.S. history and forms the future customer base for loans. This group will make up 50% of the workforce by 2020 and will have combined incomes estimated to reach $6.2 trillion by that same time period.

Lenders who ignore this age group do so at their peril. As there are many new entrants to the lending landscape. Affinity groups, alumni organizations, online lenders and other competitors promise quick and easy loans to their "members" and consumers who share interests and affiliations.

Many folks in this age group are still struggling to find jobs, pay off student debt and make their way in this post-recessionary world. A loan for a young adult can be a practical method to learn financial literacy—a life skill often not taught in our schools. The experience in applying for and paying off a loan is an invaluable skill, as is the discipline of establishing and maintaining good credit.

Finally, private student loans are part of the mix that helps finance college education, along with federal loans and savings. We shouldn't lose sight of the numbers that indicate private student loans are performing well. And there are few better ways to invest in the rebuilding of America than investing in our children and providing the means for a college education.

Vince Passione is CEO of LendKey Technologies. He can be reached at vince.passione@lendkey.com.

Student loans at a lower interest rate? Senator makes a new push.

Student loans could be refinanced at lower interest under new legislation supported by Sen. Kirsten Gillibrand (D) of New York.

By Associated Press / January 27, 2014

US Sen. Kirsten Gillibrand is renewing a call for legislation that would allow student borrowers to refinance their federal student loans at lower interest rates, urging President Barack Obama to push the effort in his State of the Union speech Tuesday.

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The New York Democrat said there's currently about $1.2 trillion in student loan debt nationwide - and the average New York graduate owes more than $27,000.

"We must strengthen our middle class families instead of forcing New Yorkers deeper into debt," she said in a statement. "Keeping a high-quality education in New York affordable is the right thing to do."

Last May, Gillibrand introduced the Federal Student Loan Refinancing Act, legislation she said could affect nearly nine in 10 federal student loans by allowing borrowers who have a higher interest rate to refinance at a fixed rate of 4 percent. Most rates for federal student debt are higher than 6 percent, she said.

There are 40 million borrowers nationwide, and 2.7 million in New York, Gillibrand said.

Gillibrand planned a news conference on the issue for Sunday afternoon. Kevin Stump, the higher education program coordinator at the New York Public Interest Research Group, was to join Gillibrand in urging the president to commit to the legislation.

Refinancing legislation would increase disposable income, allowing students and recent graduates to spend money in ways that could boost the economy, Gillibrand said.

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Turbo Taxing Student Loans

NEW YORK ( MainStreet) — The federal government is partnering with Intuit Inc., makers of Turbo Tax, to help publicize and raise the consciousness of student loan borrowers about repayment options.

The U.S. Department of Education, the U.S. Department of Treasury and Intuit Inc. announced January 24 that they will work together to make consumers more knowledgeable about income-driven repayment plans. These permit borrowers to repay their student loans using a sliding income scale. Monthly payments will be adjusted in relation to income and family size.

During tax filing season, roughly from February 1 to April 15, Intuit will feature a banner in its TurboTax Online tax preparation software announcing options for repaying federal student loans. The banner will link to the Department of Education's (ED) online Repayment Estimator, where people can determine if they qualify for an income-driven repayment plan. They can also sign up for an income-driven or other repayment plan.

Both the Treasury Department and Education Department will have a message on the back of tax refund checks envelopes about federal student loan repayment options. Approximately 25 million of these envelopes will be mailed to tax filers in the 2014 tax season, according to the ED.

"As student loan borrowers file their taxes this year, I'm pleased that many of them will have an opportunity to determine if they can lower their monthly student loan payments through an income-driven repayment plan," U.S. Secretary of Education Arne Duncan said. "Too many borrowers are struggling to pay back their student loans, which is why this collaboration aimed at sharing information about income-driven repayment plans is so important. Building on ongoing outreach efforts, the Administration will continue to work to ensure that borrowers are aware of their options that can help them responsibly manage their student loan debt."

Student Debt: Bad Loans Or Bad Education? [Apollo Group Inc, Corinthian ...

By Jeff Bailey

Contrary to what the gobsmacked television pundits and other knuckleheads would tell you, there was plenty of warning that the U.S. mortgage system was heading for a crisis. As a country - borrowers, lenders, regulators - we simply chose not to act sufficiently on data and commentary predicting enormous losses.

Are we now in a similar spot on student debt? The loans outstanding have tripled over the past decade, and a good half of that time period was an era of debt reduction when consumers were paying off or paying down credit card balances, home equity loans and mortgages. A regular trend bucker we have in student loans:

US Student Loan Debt data by YCharts

Businessweek now warns about the overall economic consequences of a student debt collapse: those indebted grads (and drop-outs) will be funneling money to student loan payments instead of renting apartments, buying cars and otherwise helping the economy grow.

From here it seems less a problem that people are borrowing to attend college and grad school than the fact that they graduate (if they do) with skills insufficient to make a decent living. Oh, and to service their student debt. The prime example in the smart Businessweek article is a young woman who racked up $170,000 in student loans to become a parole officer. The ROIC seems lacking there, eh? Even if she hadn't borrowed to attend school, the education she got, relative to the job she attained, seems pretty pricey. Inflated, just like housing prices were during the go-go mortgage era.

It's politically correct to think every person - pursuing any educational field, regardless of job and income prospects - deserves an equal shot at attending college and at getting Uncle Sam to finance it. But if it's a loan, rather than a gift, that ends up being naïve and destructive to the student. As the Businessweek piece relays:

"If you're a pre-med student, you're an engineering student, and you take out $40,000 or $60,000 of loans, I have no problem with that," John Silvia, chief economist at Wells Fargo (WFC), told the audience at the January Chamber of Commerce event in Raleigh. "But if you're going to be a French major, you're going to study social welfare, and you're going to take out $60,000 of loans, who is making the economic judgment there?"

The parole officer in the article, and the people who helped her take out the loans, are obviously not good enough at math (actually, the college admissions people who likely helped could probably care less, as their institutions have no skin in the game on student loans). So, she's living with her parents and making loan payments.

So, already we have rising delinquencies on student borrowings. The debt isn't easily discharged in bankruptcy, however, so unlike banks that made imprudent loans, Uncle Sam, the guarantor, has a strong position in collecting. That sounds good if you're Uncle Sam, but forgiveness of debts in bankruptcy is a great deterrent to lending someone more than they can repay. Foreclosing that option drags out insolvencies and keeps people and institutions from getting on with their lives. It's like debtors' prison, only you're on work release.

US Student Loan Seriously Delinquent Balances data by YCharts

For-profit education stocks - Apollo Education ( APOL), Corinthian Colleges ( COCO), DeVry ( DV), Career Education ( CECO), Education Management ( EDMC) and Strayer ( STRA), among them - could well suffer in any government reaction to the growing loan mess. And well they should, as they live off the government loan programs and have generally done a crummy job of helping students size borrowing to likely educational-and-career outcomes. (The prospects of these companies vary widely, and it's best to read the 10-K and aggressively apply financial advisor tools before jumping in to such a funky industry.)

But this being the United States, there will be a call for a market solution. Pulses will quicken at the thought of the all-knowing free market imposing discipline on these young, wayward souls.

Spare me. It's no free market when the buyer (and in this case, borrower) has poor information. As with much of the sub-prime mortgage market, instead that's called a rigged game. The kids need help in gauging their likely financial return on an investment in school. College admissions people are doing a crappy job because they have no downside risk. The task either needs to be taken out of their hands or, as has recently been proposed, sufficient financial risk tied to the loan outcomes needs to be retained by the school to force them to use better judgment.

US Consumer Price Index: College Tuition and Fees data by YCharts

With government guaranteeing the student debt, talk of free market forces is a fantasy. This instead is welfare for the for-profit education companies and for non-profit and public institutions. And it pushes up tuition prices artificially, shown above growing at roughly three times the rate of prices overall in the economy.

Student Debt: Bad Loans Or Bad Education? [Apollo Group Inc, Corinthian ...

By Jeff Bailey

Contrary to what the gobsmacked television pundits and other knuckleheads would tell you, there was plenty of warning that the U.S. mortgage system was heading for a crisis. As a country - borrowers, lenders, regulators - we simply chose not to act sufficiently on data and commentary predicting enormous losses.

Are we now in a similar spot on student debt? The loans outstanding have tripled over the past decade, and a good half of that time period was an era of debt reduction when consumers were paying off or paying down credit card balances, home equity loans and mortgages. A regular trend bucker we have in student loans:

US Student Loan Debt data by YCharts

Businessweek now warns about the overall economic consequences of a student debt collapse: those indebted grads (and drop-outs) will be funneling money to student loan payments instead of renting apartments, buying cars and otherwise helping the economy grow.

From here it seems less a problem that people are borrowing to attend college and grad school than the fact that they graduate (if they do) with skills insufficient to make a decent living. Oh, and to service their student debt. The prime example in the smart Businessweek article is a young woman who racked up $170,000 in student loans to become a parole officer. The ROIC seems lacking there, eh? Even if she hadn't borrowed to attend school, the education she got, relative to the job she attained, seems pretty pricey. Inflated, just like housing prices were during the go-go mortgage era.

It's politically correct to think every person - pursuing any educational field, regardless of job and income prospects - deserves an equal shot at attending college and at getting Uncle Sam to finance it. But if it's a loan, rather than a gift, that ends up being naïve and destructive to the student. As the Businessweek piece relays:

"If you're a pre-med student, you're an engineering student, and you take out $40,000 or $60,000 of loans, I have no problem with that," John Silvia, chief economist at Wells Fargo (WFC), told the audience at the January Chamber of Commerce event in Raleigh. "But if you're going to be a French major, you're going to study social welfare, and you're going to take out $60,000 of loans, who is making the economic judgment there?"

The parole officer in the article, and the people who helped her take out the loans, are obviously not good enough at math (actually, the college admissions people who likely helped could probably care less, as their institutions have no skin in the game on student loans). So, she's living with her parents and making loan payments.

So, already we have rising delinquencies on student borrowings. The debt isn't easily discharged in bankruptcy, however, so unlike banks that made imprudent loans, Uncle Sam, the guarantor, has a strong position in collecting. That sounds good if you're Uncle Sam, but forgiveness of debts in bankruptcy is a great deterrent to lending someone more than they can repay. Foreclosing that option drags out insolvencies and keeps people and institutions from getting on with their lives. It's like debtors' prison, only you're on work release.

US Student Loan Seriously Delinquent Balances data by YCharts

For-profit education stocks - Apollo Education ( APOL), Corinthian Colleges ( COCO), DeVry ( DV), Career Education ( CECO), Education Management ( EDMC) and Strayer ( STRA), among them - could well suffer in any government reaction to the growing loan mess. And well they should, as they live off the government loan programs and have generally done a crummy job of helping students size borrowing to likely educational-and-career outcomes. (The prospects of these companies vary widely, and it's best to read the 10-K and aggressively apply financial advisor tools before jumping in to such a funky industry.)

But this being the United States, there will be a call for a market solution. Pulses will quicken at the thought of the all-knowing free market imposing discipline on these young, wayward souls.

Spare me. It's no free market when the buyer (and in this case, borrower) has poor information. As with much of the sub-prime mortgage market, instead that's called a rigged game. The kids need help in gauging their likely financial return on an investment in school. College admissions people are doing a crappy job because they have no downside risk. The task either needs to be taken out of their hands or, as has recently been proposed, sufficient financial risk tied to the loan outcomes needs to be retained by the school to force them to use better judgment.

US Consumer Price Index: College Tuition and Fees data by YCharts

With government guaranteeing the student debt, talk of free market forces is a fantasy. This instead is welfare for the for-profit education companies and for non-profit and public institutions. And it pushes up tuition prices artificially, shown above growing at roughly three times the rate of prices overall in the economy.

Ventura Lawyer Offering Student Loan Management

Student loans are a One TRILLION dollar problem in the United States. And, every year, 1.6 million new graduates enter the workforce, armed with their new Bachelor's Degrees - and, for 60% of them, an average of $24,301 in student loan debt. Some people carry student loan debt of over $100,000.

Default rates on student loans are skyrocketing, and some economists are concerned that the inability of recent graduates to find jobs and pay their loans is going to have a ripple effect throughout the US economy, as grads defer buying homes and even cars, just to be able to support their student loan payments.

Until 2005, those who were struggling with their student loan payments were permitted to discharge the student loans in bankruptcy, but no longer. Now, student loans can follow people to the grave.

Attorneys who help clients with debt relief have been struggling to find ways to help their clients, some of whom are choking on this mountain of educational debt. Ventura Attorney Eric Ridley just returned from a Student Loan Law workshop, in which over a dozen consumer debt relief attorneys analyzed the best approach to giving relief to their clients with student loan debt.

Ridley says, "we were pleased to learn multiple means of reducing student loan payments, even for borrowers who are in default. We also discovered multiple ways to discharge clients' student loan debt."

"Now, I can offer my clients some hope. We can analyze their student loan debt, and in many cases show my clients how to reduce their payments, sometimes to zero, and even discharge their student loans early. This is going to be great news for my clients."

Attorney Ridley can be reached at 805-244-5291, or at ridley.eric@gmail.com

http://ift.tt/1mOeJXe This story is contributed by a member of the Ventura community and is neither endorsed nor affiliated with Ventura County Star

Ventura Lawyer Offering Student Loan Management

Student loans are a One TRILLION dollar problem in the United States. And, every year, 1.6 million new graduates enter the workforce, armed with their new Bachelor's Degrees - and, for 60% of them, an average of $24,301 in student loan debt. Some people carry student loan debt of over $100,000.

Default rates on student loans are skyrocketing, and some economists are concerned that the inability of recent graduates to find jobs and pay their loans is going to have a ripple effect throughout the US economy, as grads defer buying homes and even cars, just to be able to support their student loan payments.

Until 2005, those who were struggling with their student loan payments were permitted to discharge the student loans in bankruptcy, but no longer. Now, student loans can follow people to the grave.

Attorneys who help clients with debt relief have been struggling to find ways to help their clients, some of whom are choking on this mountain of educational debt. Ventura Attorney Eric Ridley just returned from a Student Loan Law workshop, in which over a dozen consumer debt relief attorneys analyzed the best approach to giving relief to their clients with student loan debt.

Ridley says, "we were pleased to learn multiple means of reducing student loan payments, even for borrowers who are in default. We also discovered multiple ways to discharge clients' student loan debt."

"Now, I can offer my clients some hope. We can analyze their student loan debt, and in many cases show my clients how to reduce their payments, sometimes to zero, and even discharge their student loans early. This is going to be great news for my clients."

Attorney Ridley can be reached at 805-244-5291, or at ridley.eric@gmail.com

http://ift.tt/1mOeJXe This story is contributed by a member of the Ventura community and is neither endorsed nor affiliated with Ventura County Star

Gillibrand To Obama: Allow For Lower Student Loan Rates

NEW YORK (CBSNewYork/AP) - Sen. Kirsten Gillibrand is renewing a call for legislation that would allow student borrowers to refinance their federal student loans at lower interest rates, urging President Barack Obama to push the effort in his State of the Union speech Tuesday.

The New York Democrat said Sunday there's currently about $1.2 trillion in student loan debt nationwide - and the average New York graduate owes more than $27,000.

"We must strengthen our middle-class families instead of forcing New Yorkers deeper into debt," she said in a statement. "Keeping a high-quality education in New York affordable is the right thing to do."

Last May, Gillibrand introduced the Federal Student Loan Refinancing Act, legislation she said could affect nearly nine in 10 federal student loans by allowing borrowers who have a higher interest rate to refinance at a fixed rate of 4 percent. Most rates for federal student debt are higher than 6 percent, she said.

There are 40 million borrowers nationwide, and 2.7 million in New York, Gillibrand said.

Gillibrand planned a news conference on the issue for Sunday afternoon. Kevin Stump, the higher education program coordinator at the New York Public Interest Research Group, was to join Gillibrand in urging the president to commit to the legislation.

Refinancing legislation would increase disposable income, allowing students and recent graduates to spend money in ways that could boost the economy, Gillibrand said.

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(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. studentloanscorner.blogspot.com contributed to this report.)

NY Sen. Gillibrand pushes student loan refinance

studentloanscorner.blogspot.com

U.S. Sen. Kirsten Gillibrand on Sunday renewed a call for legislation that would allow student borrowers to refinance their federal student loans at lower interest rates, urging President Barack Obama to push the effort in his State of the Union speech Tuesday.

The New York Democrat said there's currently about $1.2 trillion in student loan debt nationwide - and the average New York graduate owes more than $27,000.

"We must strengthen our middle class families instead of forcing New Yorkers deeper into debt," she said in a statement. "Keeping a high-quality education in New York affordable is the right thing to do."

Last May, Gillibrand introduced the Federal Student Loan Refinancing Act, legislation she said could affect nearly nine in 10 federal student loans by allowing borrowers who have a higher interest rate to refinance at a fixed rate of 4 percent. Most rates for federal student debt are higher than 6 percent, she said.

There are 40 million borrowers nationwide, and 2.7 million in New York, Gillibrand said.

Refinancing legislation would increase disposable income, allowing students and recent graduates to spend money in ways that could boost the economy, Gillibrand said.

U.S. Sen. Kirsten Gillibrand on Sunday renewed a call for legislation that would allow student borrowers to refinance their federal student loans at lower interest rates, urging President Barack Obama to push the effort in his State of the Union speech Tuesday.

The small, remote-control helicopters hovering in a conference room took on the look of fun flight at a hobby store. But when mounted with video cameras and with further development by a Jacksonville company and others, the aircraft could mean hundreds of millions of dollars in new commerce for Florida.

Japanese police on Saturday arrested a factory worker at a plant that churned out food laced with pesticide, which led to massive poisoning and a recall of more than 6 million packages of frozen food.

Student loan defaults could be trouble

If you want to destroy the global economy, there is nothing better than creating a Wall Street machine that lends money to people who can't pay it back, bundle those loans into securities and then sell them to investors around the world.

The benefit of such a machine is obvious — to Wall Street. After all, the fees for creating and selling these bundles of soon-to-be-worthless loans are big. And when the house of cards collapses, Wall Street institutions are too big to fail, so taxpayers will bail them out.

If this litany sounds familiar, it should. After all, the 2008 financial crisis was caused by lending money to people who could not pay back their loans on houses that they could not afford. Wall Street bundled those mortgages — dubbed subprime — and sold them to investors around the world.

Ratings agencies, competing for lucrative fees, rated the bundles AAA, which made them safe for pension funds and endowments — even though the mortgage holders could not make their payments. That did not matter, though — until the global economy froze up.

Surely, you might be thinking, we have learned our lesson and we will never let such a thing happen again. And just as surely, reality is rearing its ugly head to the contrary. How so?

Consider student loans. There are about $1 trillion worth out there in the hands of students. And given the high unemployment rate and the low salaries that all but the smartest minority of those students can earn — even if they do find a job after graduation — many students can't pay back the loans.

That is especially true for graduates of so-called for-profit educators that get 90 percent of the loans from the U.S. government, and must find the other 10 percent from private sources. The United States government is the largest lender to students.

"In 2012, it provided 73 percent of the $236.7 billion in total student aid offered that year, up from 67 percent a decade earlier," according to The New York Times.

If there is any good news for the U.S. economy, it is that private companies are not making as many of the student loans as they used to. Private-sector loans have fallen 70 percent since 2008 from $22.9 billion to $6.4 billion in 2013 "as investors retreated from the market," noted the Times.

While the odds of a student not being able to repay his loans are high, the private sector lenders in the for-profit education market suffer much higher default rates. According to the Department of Education, 14.7 percent of federal student loans default three years after starting repayment. But the default odds for one for-profit educator, ITT Education Services, are many times higher.

As private investors have withdrawn from the student loan market, it became much harder for ITT to maintain the 10 percent proportion of loans. To meet that standard, ITT started the Peaks Private Student Loan Program, which raised $300 million to increase the amount of private money available for its students.

The bad news is that ITT alumni — who take on more debt and get lower salaries — are less able to repay. More specifically, ITT projected in its most recent quarterly filing that the default rates in Peaks and a similar pool of loans could hit a whopping 59 percent.

The good news is that the total amount of private student loans is tiny relative to the size of the U.S. economy. According to the federal Consumer Financial Protection Bureau, private loans totaled about $150 billion nationally in 2013. The CFPB noted that "more than 850,000 individual loans totaling at least $8 billion are in default." The total private student loans are roughly 1 percent of U.S. GDP and even if all the loans defaulted, the impact would not sink the economy.

Moreover, the amount of packaging and selling of those loans to private investors — known as securitization — has tumbled since the financial crisis. And according to USA Today, securitization of student loans "has withered since the financial crisis as their investment value has plunged."

The bad news is that there will be plenty of individuals who will not be able to repay their student loans and that failure will follow them around for the rest of their lives. The good news is that since private investors withdrew from the market after the financial crisis, the effect of these individual defaults will not be as catastrophic as the subprime mortgage-backed security defaults were.

Nevertheless, the problems that ITT faces are a reminder that we must remain vigilant against allowing Wall Street to resume luring of investors into the inevitably disastrous practice of securitization. While it makes money for Wall Street in good times and bad, it sticks taxpayers and those foolish enough to borrow more than they can repay with a price that is too high for society to bear.

Fed Student

Bloomberg News

Tiffany Roberson works for the state of Texas as a parole officer, teaches part time and is living with her parents after finishing a master's degree. She's held off marrying her boyfriend of four years and starting a family because she owes more than $170,000 in federal and private student loans.

"I've never gone into default," the 30-year-old said. "What really hurts is people say I'm a bum for living at home."

Federal Reserve economists are trying to determine whether people like Roberson represent a trend that will damage U.S. growth, partly by restricting sales of houses and cars. Student loans are one of the only deteriorating pockets of consumer credit, with balances and delinquency rates rising to record highs even as a strengthening economy allows Americans to reduce total borrowing.

Outstanding education debt exceeded $1 trillion in the third quarter of 2013, and the share of loans delinquent 90 days or more rose to 11.8 percent, according to the Federal Reserve Bank of New York. By contrast, delinquencies for mortgage, credit-card and auto debt all have declined from their peaks.

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"I'm always made very nervous by a credit market that benefits from government guarantees and is expanding very rapidly," Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, said in response to audience questions after a speech at a Jan. 10 Greater Raleigh Chamber of Commerce event in North Carolina. "That's what we're seeing with student loans, and it's what we saw with housing."

Debt Analysis

Economists at the New York Fed are analyzing student debt as part of their quarterly reports on national household credit. That project emerged six years ago as the credit crisis unfolded, when the researchers and their then-boss, Timothy F. Geithner, realized there wasn't a good way to study total consumer borrowing.

They began assembling their own figures, relying on credit reports from Atlanta-based credit bureau -- and found that information on student borrowing was particularly sparse because of gaps in the frequency and type of publicly available data.

The Department of Education releases defaults rates on federal loans once a year and only for borrowers who haven't made required payments for at least 270 consecutive days during the two- and three-year periods after they graduate or drop out. The rates don't include students with extensions -- such as deferrals and forbearance, or federal income-based repayment programs -- which can indicate signs of borrower distress. They also don't include private loans, which account for about 15 percent of the market.

Little Data

"We didn't realize there was so little data," said Wilbert van der Klaauw, one of the New York Fed economists involved in the analysis.

Studying the growth of education debt as part of total consumer borrowing is important because it may limit access to credit for financing homes or autos, van der Klaauw and economists Donghoon Lee and Andrew Haughwout said in a Jan. 9 interview at the district bank. They and their colleagues also are trying to understand how the rising burden influences living arrangements -- such as college graduates like Roberson who stay with their parents because they can't afford to move out. That, in turn, may reduce marriage and birth rates.

The New York Fed has played an important role in analyzing the potential problem by focusing on outstanding student loans, delinquencies and how this borrowing fits into the larger consumer-debt picture, said Lauren Asher, president of the Institute for College Access & Success, a nonprofit group based in Oakland, California.

'No Question'

There's "no question" we need to know more "than the current data tells us," she said.

Students are borrowing more to fund college and graduate school as the cost of higher education rises faster than the rate of inflation. The price tag at some of the most expensive private colleges is now more than $60,000 annually. Average tuition and fees at private schools in the 2013-2014 academic year was $30,094, up from $18,060 in 2002-2003, according to the College Board, a New York-based nonprofit representing more than 6,000 educational institutions.

The share of 25-year-old Americans with student debt increased to 43 percent in 2012 from 25 percent in 2003, and the average loan balance rose 91 percent, to $20,326 from $10,649, New York Fed data show.

Real-Time Calculations

While the district bank's calculations don't distinguish between private and federal loan debt, they are more real-time than those of the Education Department: They reflect balances on a 5 percent sample of people with a Social Security number and a credit report. The Education Department's default rate covers only dropouts and graduates two and three years after finishing a program.

The department began publishing data on its website in July 2013 about the current status of outstanding federal student loans, such as forbearance and deferment, to provide more information in a user-friendly format, a spokesman said.

There remain a lot of "missing pieces," including the link between debt levels and specific universities or courses of study, van der Klaauw said.

"If you're a pre-med student, you're an engineering student, and you take out $40,000 or $60,000 of loans, I have no problem with that," John Silvia, chief economist at Wells Fargo & Co., said in response to audience questions after a speech at the Jan. 10 Raleigh, North Carolina, event. "But if you're going to be a French major, you're going to study social welfare, and you're going to take out $60,000 of loans, who is making the economic judgment there?"

Government Loans

U.S. borrowers, including students and their parents, owe $1.2 trillion in educational-loan debt, according to the Consumer Financial Protection Bureau, or CFPB -- surpassing all other kinds of consumer borrowing except for mortgages. About $1 trillion is government loans and the rest is an estimate of private loans based on data submitted for a 2012 report.

There's a discrepancy between the CFPB's number and the New York Fed's: The district bank calculates the total at $1.03 trillion.

"We do hear from borrowers that they sometimes find missing or inaccurate information in their credit reports when it comes to student loans," said Rohit Chopra, the CFPB's student-loan ombudsman, who published a blog post in August that analyzed federal debt. "This does raise questions" about the accuracy of information servicers give reporting agencies.

Borrow More

While undergraduates are limited in how much they can finance through federal programs, parents and graduate students can borrow much more. They can take out federal PLUS loans up to the cost of attendance -- including tuition, room, board, transportation and personal expenses -- minus any aid received.

A student-loan crisis would "force parents and students to think about" their expected return on education, Silvia said. "Like in housing, we learn by going through that craziness, and now hopefully the next generation won't make that same mistake."

Borrowers already have a harder time with repayments. About one in seven, or 14.7 percent, of students defaulted on federal loans in the first three years they are required to make payments, according to Education Department data released in September. The rate was was 13.4 percent a year earlier.

While the New York Fed and CFPB data "have their limitations," they are "helping to flesh out the clearer picture and key dynamics," said the Oakland nonprofit's Asher.

'More Opaque'

"Compared to other financial products, performance data on student loans is much more opaque," Chopra said. Given that the market has grown so rapidly, "financial regulators must significantly increase the level of monitoring."

"Our job is to really understand what's happening in the financial system," and the "very rapid rise in student-loan debt over the last few years" can "actually have some pretty significant consequences to the economic outlook," New York Fed President William C. Dudley said at a Nov. 20 briefing with reporters at the district bank.

"People can have trouble with the student-loan debt burden -- unable to buy cars, unable to buy homes -- and so it can really delay the cycle."

Tiffany Roberson now is looking for a third job, partly because rising interest rates have increased her debt to about $72,000 in federal loans and $102,000 in private loans. She pays almost $1,000 a month on the latter and about $33 on the federal loan through a program based on her income.

"These payments eat up my paycheck," she said. "It puts a huge drain on living the American dream."

To contact the reporters on this story: Caroline Salas Gage in New York at csalas1@bloomberg.net; Janet Lorin in New York at jlorin@bloomberg.net

To contact the editors responsible for this story: Chris Wellisz at cwellisz@bloomberg.net; Lisa Wolfson at lwolfson@bloomberg.net

Inspecting a Student Loan Spigot

A few days after Christmas, ITT Educational Services, one of the nation's largest operators of for-profit technical schools, reported some unwelcome news. The Consumer Financial Protection Bureau had warned the company that it might seek penalties and remedies against it for possible student loan violations.

ITT maintained that its practices were legal and said it would vigorously defend itself. Happily for the company, its shareholders seem unworried: last week, the stock hit a new 52-week high, closing at $45.27.

ITT is not the only for-profit educator under scrutiny, of course. But it is among the largest. At 149 institutes in 39 states (and online), ITT offers nursing, criminal justice, business, information technology and other programs to 61,000 students. Based in Carmel, Ind., the company generated $800 million in revenue in the first nine months of 2013, down 18 percent from the year-earlier period.

The consumer bureau, ITT's filing said, wants to determine whether lenders and student loan servicers working with for-profit colleges "are engaging in unlawful acts or practices relating to the advertising, marketing, or origination of private student loans."

That's a pretty broad purview. Asked for more details last week, Rohit Chopra, student loan ombudsman at the consumer protection bureau, said he couldn't comment on individual companies.

But with total student debt topping $1 trillion today, regulators are clearly on the alert for abusive practices. And with jobs scarce for recent graduates, these loads loom even larger.

Debt carried by students at for-profit colleges can be especially onerous when compared with what attendees make after graduation. Nicole Elam, an ITT spokeswoman, said the average annual salary reported by its 2012 graduates was $32,612. Their average debt burden was around $30,000, she said. By comparison, the average student loan balance nationwide and across all institutions was $24,803, Federal Reserve research shows.

Ms. Elam declined to comment further on the consumer bureau's warning. But delving into ITT's financial statements provides clues to what the regulator may be looking at. First, though, a tutorial in the student loan industry may be in order.

The United States government is by far the largest lender to students. In 2012, it provided 73 percent of the $236.7 billion in total student aid offered that year, up from 67 percent a decade earlier.

Private-sector loans, meanwhile, have plummeted in recent years - to $6.4 billion last year from $22.9 billion in 2008 - as investors retreated from the market.

Among for-profit institutions like ITT, student access to private loans is crucial. Under Department of Education rules, no more than 90 percent of tuition payments can come from federal funding. At least 10 percent must come from private sources like family savings or other lending institutions. Veterans' tuition costs, however, can be fully paid by federal programs.

For-profit entities exceeding the federal funding limit for two years lose access to that money for their students. That could be a death sentence for the institutions. In 2012, some 80 percent of ITT's revenue came from government aid programs.

This is typical among for-profit schools. Because these schools cost more than public universities or community colleges and recruit students of reduced means with little access to private funds, students at these institutions rely heavily on government programs.

As the private loan pool dried up, some schools had a tougher time meeting the 90-10 rule. In January 2010, ITT came up with a solution: the Peaks Private Student Loan Program, which increased the amount of private money available for its students.

The program was financed by an off-balance-sheet trust that raised over $300 million from investors, to whom it issued debt. This debt was guaranteed by ITT, but an unaffiliated lender used the cash to make loans to ITT students. Those loans were then put into the trust.

Because the lender was unaffiliated with ITT, the loans qualified as private money under the 90-10 rule. The company, therefore, ensured that its students could keep tapping into federal grants for the other 90 percent of their education costs.

The idea was creative and immensely helpful to ITT, as it kept revenue coming in. But the Peaks program, which ended in 2012, is becoming problematic now. Many of the loans in the trust are defaulting. In its most recent quarterly filing, ITT said it projected default rates in Peaks and a similar pool of loans to be as high as 59 percent.

Contrast this to the 14.7 percent default rate for students three years after starting repayment of federal loans, according to the Department of Education.

Signaling that the Peaks trust is teetering, ITT began making payments to it on behalf of students to help them avoid default. ITT said it had paid $7.65 million as of the quarter that ended in September.

As the guarantor of Peaks trust debt, ITT is on the hook for its loans. So far, the company has set aside reserves for possible losses of $40 million.

Bradley Safalow, founder and chief executive of PAA Research, an independent research firm in New York, reckons that based on ITT's default projections, it could be forced to make additional payments for Peaks liabilities of over $100 million.

"There's no question that 90-10 compliance was a major motivation for ITT to set up the Peaks trust," he said, "and it was a huge source of cash generation for them."

There's another potential problem with the company making payments on behalf of borrowers: the possibility that those payments would imperil its compliance with the all-important 90-10 rule when the loans were made.

The magnitude of ITT's projected default rates of up to 59 percent may also be of interest to regulators who are increasingly concerned that lenders weigh borrowers' ability to repay such obligations. The company may argue that it did not originate the loans, and thus could not be considered responsible.

But, speaking generally and not specifically about ITT, Mr. Chopra of the consumer protection bureau said: "When a lender originates a loan that they expect to fail, that raises questions about their broader incentives. Our concern is normal market forces may not be working properly."

ITT is fielding inquiries from another regulator as well. Last February and again last May, the company received subpoenas from the Securities and Exchange Commission asking for information about its Peaks program. It is cooperating.

For now, it seems, there are more questions surrounding ITT than answers.

10 Ways to Fix Student Loans in 2014

If you thought the politics behind the student loan pricing debate were contemptible, just wait until Congress takes up the reauthorization of the Higher Education Act this year.

For nearly a half century, the HEA has been responsible for a variety of financial assistance programs for students and educational institutions. Title IV is arguably the best known facet of the act. It governs Pell and Supplemental Education Opportunity grants, the Federal Work Study program, Perkins Loans, Direct Subsidized and Unsubsidized Stafford Loans and Direct PLUS Loans. (The FFEL program was discontinued in 2010.)

Although much of what promises to be yet another ideological altercation over funding levels and the government's role in higher education, lawmakers hopefully will remember the nearly $1.2 trillion of student loan debt that's choking our kids and holding back the economic recovery.

Here are 10 actions that Congress can take to address the student loan debt debacle it helped to create.

1.) Broaden the federal relief programs to include all loans, regardless of origination channel (government and private), effective date, payment status (current versus past-due) or if an accommodation was previously granted. Half-way is no way to handle a crisis of this magnitude.

2.) Restructure the distressed loans so that interest rates or no higher than the prevailing Direct Loan rate and the aggregate monthly payments don't exceed 10% of the preceding year's before-tax income divided by 12. Loan durations will need to be extended to accommodate the change, but that shouldn't be open-ended: 20 years of debt payments for a 20-year-old's education is long enough. Frankly, these loans should have been structured on that basis in the first place, given the huge amount of dollars that are involved.

3.) Make a tax exemption for any debt forgiveness that may result from the 20-year term limit, just as the Mortgage Forgiveness Debt Relief Act of 2007 did for homeowners whose unaffordable loans were modified by the banks.

4.) Direct the credit bureaus to expunge pre-relief student loan payment histories so borrowers are not penalized for difficulties that were inadequately addressed in the past.

5.) Direct the regulators to relax the rules governing troubled debt restructurings so banks are encouraged to revise payment terms for distressed borrowers without concern (or excuse) for the negative financial ramifications that typically go along with this activity.

6.) Repeal the amendment to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 that granted private lenders the same protections against discharge that the government enjoys, without also compelling them to offer borrowers equally favorable rates and terms. Doing so will provide the proper incentive for lenders to negotiate in good faith on their unsecured loans.

7.) Ensure that all student loan-servicing and collections companies comply with all consumer protection laws. Education borrowers deserve the same protections as any other class of consumer-borrower, especially when it comes to the Fair Credit Reporting and Fair Debt Collection Practices acts.

8.) Establish a universal standard for the processing of student loan remittances that records borrower-payments on the dates they are received and applies that cash in this order: first to interest, second to principal and third to any unpaid fees (such as for a prior late payment). And should the value of the remitted payment exceed the amount that's currently due, the fourth step in the cash-application process should be to credit that excess against the remaining loan balance, unless the borrower explicitly directs the servicer to issue a refund or offset a future loan payment. Servicers should be held financially responsible for the misapplication of payments to the detriment of the borrowers.

9.) Establish minimum acceptable levels of loan-servicing performance that measure payment delinquencies and defaults, as well as customer service-response turnaround time. Loans that have been granted forbearance or deferment should be counted as delinquent and all past-due payments should only be measured against loans that are in repayment mode. That way, servicers with relatively high values of deferred loans (for borrowers still in school) are not favored and the data is more revealing. Forbearances and deferments should also be more closely monitored and benchmarked as a group so that servicers and lenders that delay loan restructurings in favor of temporary solutions that cost borrowers more (because of the capitalized interest) are held accountable.

10.) Prohibit the transfer of chronically delinquent or defaulted loans to affiliated collections companies, or to entities with which the servicers enjoy an economic relationship (such as in the form of referral commissions). That way, no one company may doubly benefit from the servicing of any one loan.

Clearly, these actions will amount to an expansion of the government's role in this regard. After all, we're talking about $400 billion to $500 billion that could make its way to the Department of Education's balance sheet (approximately $150 billion of private student loan debt plus a portion of the approximately $300 billion of privately-owned, government-guaranteed FFEL loans that have not already been restructured). But that doesn't mean the taxpayers should be left holding the bag. There are two actions the government can take to limit their (and the public's) exposure.

Establish a proprietary securitization program. Why let others do for you what you can do for yourself more economically? FFEL loans are routinely securitized by financial intermediaries (such as Sallie Mae) that skim profits from the deals they put together. What's more, the design of these transactions is intended to benefit issuers, servicers and investors, without due consideration for the needs of financially distressed borrowers-which is one of the reasons why so few of these loans have been restructured). If the government takes a principal role in the securitization of loans for which it is directly (Federal Direct) and contingently (FFEL) responsible, investors will stand to benefit from the elimination of an added layer of cost. Borrowers will also benefit because the transactions will provide for the loan-restructurings that may become necessary at some later date.

Establish a student-loan loss pool. Moving all these loans into government-sponsored relief programs will result in increased losses. That's why it's time for the entities that benefitted from the DOE's largesse to give back some of what it received. An individual school's assessment could be determined by applying its cohort default rate against the value the institution received in federally-sponsored grants and loans during the same period. A private lender's assessment could be based upon the difference between the rates it and the government charged during the same period, as an offset to the value of the loans that move from the private lender's books to the government's.

No doubt these actions would inspire significant changes in behavior.

Lenders would become more circumspect in their lending practices - something that should have happened long ago. Or, as one student-borrower recently said to me: "I was an 18-year-old freshman who couldn't get approved for more than a $750 credit card line. Yet, the student loan company gave me $25,000 to spend. On my own. I would have been better off had they turned me down."

The schools should also plan for a more austere future.

Today's consumers are realizing that they can no longer afford to pay for the administrative redundancies that exist between schools in close geographical proximity, nor the intercollegiate infrastructural warfare that takes the form of bigger and more luxurious sports centers and dormitories, or the capital that's literally buried in these assets when it can be put to better use developing and delivering enhanced educational content.

The HEA has helped America to become a better educated country. Unfortunately, it also made it possible for many schools and financial institutions to help themselves at taxpayer expense. Perhaps the act doesn't need to change as much as the manner in which it's administered.

(Editor's note: If you've had difficulties paying your student loans in the past, it's important to understand how your payment history affects your credit. You can get a grasp on your credit standing by checking your credit reports, which you can do for free once a year through AnnualCreditReport.com, as well as by monitoring your credit score, which you can do for free using a tool like Credit.com's Credit Report Card.)

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates. Read More from Credit.com

Accused Staten Island parent

STATEN ISLAND, N.Y. -- Accused parent-killer Eric Bellucci may never be tried due to his mental state, but he still faces some new legal hurdles.

The Massachusetts Educational Financing Authority recently sued the Annadale resident in state Supreme Court, St. George, seeking more than $59,071 in unpaid loans and interest.

Advance records show Bellucci, 33, attended Williams College in the Bay State on a football scholarship, although he was later hurt and apparently took out student loans.

Bellucci is currently being treated in upstate Mid-Hudson Forensic Psychiatric Center, a secure facility, after a justice found him mentally unfit for trial.

Family members and law enforcement sources say Bellucci suffers from schizophrenia and is delusional and prone to violent outbursts.

Bellucci will be periodically evaluated to determine if he understands the charges against him and can aid in his defense. His next scheduled court appearance is June 27.

Prosecutors allege Bellucci butchered his parents, Arthur, 61, and Marian, 56, on Oct. 13, 2010, inside their Poillon Avenue home. Afterward, he fled to Newark Airport, and then to Tel Aviv, Israel, where he was nabbed at Ben Gurion International Airport while allegedly trying to buy plane tickets to Beijing.

Bellucci has been tested a number of times over the past three years with conflicting results about his mental fitness. He has been found competent on those occasions after receiving treatment in Mid-Hudson Forensic Psychiatric Center.

According to the civil filing, the Financing Authority advanced money to Bellucci under three loans on undisclosed dates.

Balances totaling $49,164 remain, along with interest of $9,907, said court documents.

A representative of the Rochester, N.Y. firm, Zwicker & Associates, which represents the authority, declined comment on the filing.

Mark J. Fonte, Bellucci's defense lawyer, could not immediately be reached for comment.

Loan Monitor Is Accused of Ruthless Tactics on Student Debt

New York TimesLoan Monitor Is Accused of Ruthless Tactics on Student DebtNew York TimesCongress, faced with troubling default rates in the past, has made it especially hard for borrowers to get bankruptcy relief for student loans, and so only some hundreds try every year. And while there has been attention to aggressive student debt ...

Loan Monitor Is Accused of Ruthless Tactics on Student Debt

New York TimesLoan Monitor Is Accused of Ruthless Tactics on Student DebtNew York TimesCongress, faced with troubling default rates in the past, has made it especially hard for borrowers to get bankruptcy relief for student loans, and so only some hundreds try every year. And while there has been attention to aggressive student debt ...