Students out of college are defaulting on their loans at a historically high rate, and, with the state of the economy, the situation does not appear to be getting better any time soon.
The Huffington Post reported the rates of recent college students defaulting on their loans are higher than any have been in nearly 20 years. With a poor economy making employment hard to come by and levels of student debt growing to obscene amounts, the problem does not appear to have a solution in sight.
One in ten borrowers are defaulting on their federal student loans within the first two years, the highest rate since 1995. Within the first three years, that figure becomes one in seven, according to data released Monday by the U.S. Education Department (ED).
"The growing number of students who have defaulted on their federal student loans is troubling," ED Secretary Arne Duncan said in a press release. "The Department will continue to work with institutions and borrowers to ensure that student debt is affordable."
Such plans to keep the cost of college down and make loans more affordable go as high as a proposal made recently by the President of United States. Barack Obama's proposal includes some dramatic reforms including a rating system for colleges that receive federal funding to determine which are more deserving of government aid.
Last week, at an education conference in New York, Duncan backed the proposal against some of its criticism. The rating system has yet to be developed, but he said the Obama Administration would not rush to force the rating system into existence.
Said Duncan in the release Monday, "We remain committed to building a shared partnership with states, local governments, institutions, and students-as well as the business, labor, and philanthropic leaders-to improve college affordability for millions of students and families."
