Analysis of Department of Education data reveals a 17% increase in 2016 in the number of Americans in default on federal direct loans serviced by companies hired by the federal government.
"3,000 preventable student loan defaults each day in America is 3,000 too many," Rohit Chopra, senior fellow at the Consumer Federation of America, and formerly the CFPB's student loan ombudsman, said in a prepared statement. "Our broken system works well for the student loan industry, but is failing borrowers, taxpayers, and our economy."
The Consumer Federation of America, which provided the analysis, noted at the end of 2016, 42.4 million Americans owed $1.3 trillion in federal student loans. These figures exclude borrowing through private student loans, credit cards, and home equity loans to finance the growing costs of college. The Federal Reserve System puts total outstanding student loans at $1.4 trillion, which includes federal and private loans, but excludes other loans used to finance higher education.
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