Congress attempting to address student loan debt defaults
Cost of college continues to go higher. Today, graduating college kids are carrying an average student loan balance of $29,400 with certain degrees including medicine costing much more. More than 70 percent of those who left college in 2012 carried some form of student loan debt. Compare this to 68 percent in 2008 with an average loan balance of $23,450. According to some estimates one of every seven who has a student loan balance falls behind paying back the debt within three years of graduation or dropping out of college.
The Congress is concerned about the student debt default rate, thinks that colleges should bear some responsibility and therefore, trying to introduce legislation making colleges also responsible for the debt by introducing a fine of five to 20 percent of the debt. For profit colleges will carry a higher rate of fines because their rate of default is higher than the rest. Congress is encouraging colleges to develop loan management plans including financial responsibility counseling for those who are at risk of defaulting. Colleges on the other hand are trying to accelerate programs in order to cut down the cost of a college degree by graduating sooner.