- Created: Friday, 05 June 2015 10:15
- Written by Steve Palmer
Owe the bank £100, the old saying goes, and you have a problem; owe the bank £1 million and the bank has a problem. In the US almost 40 million people owe a total of $1.16 trillion in student loans. Since British capitalists have decided to follow their US counterparts onto the same slippery slope of financing higher education privately, it is worth having a closer look at the contradictions in this system.
Loans in the US
Student loan delinquencies are rising fast: loans more than 90 days delinquent are 4.3% of all consumer debt and 3.1% for mortgages: for student loans, the rate is 11.3% and increasing. When we take account of the fact that half of all these loans are in deferment, grace periods, or forbearance – in short, not in the repayment cycle – the delinquency rate more than doubles. With some putting it as high as 30%, it is clear there is a problem.