The student loan problem is so bad . . .

More Than 40% of Student Borrowers Aren’t Making Payments

. . . it is impossible to underestimate its impact.

It has become so bad that 43% of student borrowers aren't making payments. That includes 3.6 million ($56 billion) who have defaulted by not making a payment in over a year, another 3 million ($66 billion) who have not made a payment in more than a month, and another 3 million ($110 billion) who are in deferment/forbearance, commonly for unemployed status. Confusingly, there is another group which should be included here but is apparently not. "Even many borrowers who are current on their loans are paying very little. More than a third of borrowers on an income-based repayment plan had monthly payments of zero because their incomes were so low, according to a Navient survey last year." It would seem, these people are making their payments, although they are not actually making any payments at all. I have no idea how many people are in this class, but it would seem likely to push the total to close to, or over 50%.

"But the officials acknowledge that a large pool of borrowers have essentially fallen off the radar. The Education Department has assembled a “behavioral sciences unit” to study the psychology of borrowers and why they don’t repay.

“We obviously have not cracked that nut but we want to keep working on it,” said Ted Mitchell, the Education Department’s under secretary. He said many defaulted borrowers dropped out of school and are underemployed."

Oh, right, crack team, best people . . . Look pikers, I'll toss you a freebee, "it's a story about a man name Brady"  . . .  Sorry, wrong story. It's a story about a man named Matthews.

"Kristopher Mathews, 38 years old, is in deferment on about $11,900 in federal student loans. During the recession he earned a certificate at a Michigan-based for-profit college that teaches media arts, but he wasn’t able to find the well-paying job in radio that he hoped for.

Mr. Mathews now works as a logistical analyst for an auto company, making $46,000 a year. He says he devotes his income to caring for his family—he and his fiancée have three children—and paying off two credit cards and a car loan. “With all the other necessities in life I just don’t have” funds to pay student debt, he said.

Once his deferment expires, he isn’t sure if he will feel obliged to pay down his loan. “They promised me everything,” he said of his for-profit college. “And I honestly have nothing to show for it except a piece of paper that doesn’t really do me any good.'"

If your crack team can't figure it out after that, you are well and truly screwed. College today, and not just for profit, but the nonprofits ones as well, offer two distinct types of degrees. A small number of degrees with an obvious job prospect at the end, and then all the other which do not. The obvious job degrees are things like economics, computer science, engineering, and chemistry . . . frequently these are STEM degrees, or STEM heavy degrees. The others are like French literature, gender studies, english, art history, and the like. 

We need to reform higher education, and how we pay for it.

If you are like me and pay taxes, LOTS of taxes, you might as well start warming up your check writing arm now. I smell a new tax burden on the horizon.