Some are even going as far as to refer to student loans as the new indentured servitude The headline may not be what you thought was the case after you saw the Department of Education’s recent announcement about default rates behind the headlines and the “inside baseball” accounts of which lobbyists are talking to which members of Congress is this gnawing reality that the student loan reform discussion is missing one key constituent: the struggling student loan borrower. All things considered, the quantity they announced for the 2007 default that is cohort (CDR) was 6.7%. It got more interesting after that, when I dug further into those numbers.
First, I became amazed to find out that forbearances and deferments are contained in the denominator for the CDR calculation.
From studentaid.gov, this can be a concept of forbearance:
“Forbearance is a short-term postponement or reduced total of re payments for a period because you are experiencing financial trouble. You can easily get forbearance if you’re maybe not qualified to receive a deferment. Unlike deferment, whether your loans are unsubsidized or subsidized, interest accrues, and you’re accountable for repaying it. Your loan owner can grant forbearance in periods of up to one year at time for as much as 36 months. Continue reading