This Parent Trap Involves $71 Billion of Federal Education Debt
- Paying for a child's college education can be hazardous
- `We're impoverishing the less-privileged population'
In this photo taken with a tilt-shift lens, students walk through a hallway at LaGuardia Community College in the Queens borough of New York, U.S., on Thursday, Dec. 23, 2010. For-profit colleges are gaining students over community colleges as they compete to educate low-income students, even though private schools charge as much as ten times for the same degree and their students are eight times more likely to be in debt.
Photographer: Bloomberg/Bloomberg via Getty ImagesThe U.S. government is sitting on a growing pile of debt backed by little more than parental love.
That’s because parents can borrow tens of thousands of dollars a year for their kids’ college education without showing they can pay it back. About 3 million parents have $71 billion in loans, contributing to more than $1.2 trillion in federal education debt. As of May 2014, half of the balance was in deferment, racking up interest at annual rates as high as 7.9 percent.