That said, young people are so overburdened in college loan debt that they can't buy a house, or start a family, or even move out of their parent's home.
That's been the narrative advanced by Joe Biden, Bernie Sanders, Elizabeth Warren and every other advocate to make student loan debt disappear. The only problem is that it's a load of crap.
The Congressional Budget Office (CBO) "examined a sample of federal student loans that entered repayment between July 2009 and June 2013 to measure the extent borrowers were making progress on repaying their debt," reports the Wall Street Journal.
They found that during the first six years, more than half of student loan borrowers who were supposed to begin making payments were only making payments 45% of the time. The borrowers weren't making any payments for most of the time because they were either in default, forbearance or deferment.
Incredibly, “borrowers made payments greater than $10 in only 38 percent of the months.” Borrowers were making payments inconsistently and only in token amounts.
One reason is that the Democrats’ 2010 income-based repayment plans capped payments at 10% of discretionary income—i.e., income exceeding 150% of the poverty line—and canceled debt after 10 to 20 years. As a result, many borrowers had negligible required payments. But then their loan balances ballooned as they accrued interest.
After six years in repayment, the typical borrower owed 8% more than his beginning balance. A quarter of borrowers owed 30% or more debt. More than 75% of those in income-driven repayment plans had rising balances. Borrowers in such plans made payments of more than $10 a month in only about a third of the months.
