[ad_1]
<p class = "canvas-atom-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" The irrational loans to students, soaring costs of The burden of student loans has become a major problem, "wrote Dimon in his highly read & nbsp;annual letter. "The impact of student debt now affects mortgage credit and household formation … Recent research shows that the burden of student debt is now starting to affect the economy. "" Data-reactid = "16"> "The irrational student loans, rising costs of universities and the burden of student loans has become a major problem," Dimon writes in a much-read annual letter. student debt impact now affects mortgage credit and household formation … Recent research shows that the debt burden of students is now starting to affect the economy. "
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Dimon has highlighted a & nbsp;studyAccording to Fed economists in January, a $ 1,000 increase in student debt reduced home ownership rates by 1.8%. "data-reactid =" 17 "> Dimon highlighted a study by Fed economists in January indicating that a $ 1,000 increase in debt reduces homeownership rates 1.8%.
The student loan balance increased in real terms between 2005 and 2014, with average debt per capita for borrowers aged 24 to 32 doubling from $ 5,000 to $ 10,000.
A graduate poses his head in his hands during the opening ceremony of the Syracuse University at the Carrier Dome of Syracuse, New York, USA (Credit: Michael Okoniewski / Bloomberg via Getty Images
The increase in student debt has also had a negative impact on consumer behavior in other areas, which could also be detrimental to economic growth: "This finding has far-reaching consequences. beyond homeownership because credit scores have an impact on access and cost of consumer credit, including auto loans and credit cards. "
<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "A borrower on student loan now has a debt of 28,650 $ average at graduation, according to & nbsp;Student Loan Hero. "data-reactid =" 40 "> A borrower who has taken out a student loan now has an average debt of $ 28,650 after graduation, according to Student Loan Hero.
"Government loans … have not all been responsible"
Dimon warned that urgent action was needed to reform student loans.
One solution was to create better loan products – a possible game to bring student loans to the private sector.
"We would be well advised to have better underwriting standards for creating student loans," wrote Dimon. "Direct public student loans have grown by almost 500% in the last 10 years – not all responsible lending."
Dimon suggested that "it would also be helpful for the government to disclose student loan programs as if they were accountable in the same way as a bank. By tackling these factors, we would get much better and healthier student loans. "
Jamie Dimon, president and CEO of JPMorgan Chase, talks with students at a Detroit Economic Club event at Ford Field on Thursday, September 17, 2015 in Detroit. (Photo credit: Rick Osentoski / AP images for JPMorgan & Chase Co.)
A report recently released in February by the Independent Inspector General of the Ministry of Education (IG) of the Department of Education called for greater accountability in the monitoring of federal student loans.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In a scathing & nbsp;report, IG explained that the DoE's federal student aid program did not hold loan administrators accountable and loan representatives repeatedly failed to inform borrowers of repayment options, while calculating incorrectly the monthly payments of borrowers for specific repayment options. 67 "> In a scathing report, the IG explained how the DoE's federal student aid program had not held Loan Management Officers accountable, and that representatives of Loans have repeatedly failed to inform borrowers of repayment options while poorly calculating the monthly payments of borrowers for specific repayment options.
The federal government does not scatter loans – the largest providers of student loans are currently Navient, Great Lakes, Nelnet Servicing and the Pennsylvania Higher Education Assistance Agency. They are supervised by the DoE.
Aside from Dimon, officials who were part of the US student loan system are also calling for reform.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" The student debt crisis is more than just a problem. a crisis of educational policy ", Seth Frotman, former CFPB Student Loans Ombudsman;told& nbsp; before a committee of the House earlier this month. "It's a major consumer credit problem, perhaps the most important, that threatens our country at the present time." "Data-React =" 70 ">" The Crisis of the Student debt is more than a matter of higher education policy, "said the former student loan of the CFPB Seth Frotman, Ombudsman, said before a committee of the House that month: "This is a major problem, perhaps even the most important, related to consumer finance, which threatens our country at present."
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Aarthi is a writer for Yahoo Finance. Follow her on Twitter @ aarthiswami."data-reactid =" 71 ">Aarthi is a writer for Yahoo Finance. Follow her on Twitter @ aarthiswami.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Read more:"data-reactid =" 72 ">Read more:
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, Youtube, and reddit."data-reactid =" 77 ">Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, Youtube, and reddit.
[ad_2]
Source link