Feds crack down on South Florida student loan defaulters
The next Meltdown?
As a growing number of Floridians fail to repay their student loans, the federal government is aggressively filing lawsuits in hopes of recouping taxpayer money.
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Florida has the ninth worst student loan default rate in the country. About 19,279 people, or 10.5 percent of those required to start repaying loans in 2009, defaulted within the first two years, federal figures show. The national average is 8.8 percent.
Nationally, one in every five government loans that was required to be paid back in 1995 has gone into default, according to a 2010 analysis by the Chronicle of Higher Education, an academic magazine. The default rate was 40 percent at for-profit colleges, where tuition is higher and graduation rates and job prospects are generally lower than at public and nonprofit universities, the magazine found.
Robert Murphy, a consumer rights lawyer in Fort Lauderdale, said the government issues loans without any regard to a person's likelihood to repay them. He said many people graduate from law schools today with $120,000 in debt and are only making $40,000 to $50,000. They end up having to use a quarter of their salary just to pay off debt and can barely survive, he said.
"There is a growing sense that the student loan problem is going to explode," Murphy said. "And I'm not sure people have really sat down and considered what a huge effect it can have on the economy to have such a large number of student loan borrowers defaulting."
http://www.sun-sentinel.com/news/education/highered/fl-student-loan-lawsuits-20120510,0,2380048.story
