Pepperdine prof.: If colleges were publicly traded I'd short them

Pepperdine University Professor Steve Hayward on the fallout from 40% of student borrowers not making their loan payments.

40% of Students Aren't Paying Back the Government

By College Planning FOXBusiness

There’s new concern over student loans as more than 40% of people who borrow from the government are not making their payments. That’s nine million of the 22 million people with students loans who may never be able to pay their loans.

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During an interview on the FOX Business Network’s Varney & Co., Pepperdine University professor Steve Hayward suggests the latest figures are a direct result of rising education cost and thinks a bailout is in the near future.

“The cost of higher education has been soaring well beyond the rate of inflation for decades. Higher than the rate of increase in housing during the bubble, higher than the cost of healthcare at higher rate than healthcare was rising,” Hayward told host Stuart Varney.

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Hayward went on to say he is not surprised by students who took on student debt in a weak job market.

“I think the product being delivered is subpar and I think there is a bubble coming,” Hayward said.

The Obama administration has increased their efforts of reaching out to potential default borrowers and offer the income-based repayment plans, according to the Wall Street Journal.

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The Education Department points out the increase in defaults and delinquencies is at a slower pace compared to last year, suggesting the administration’s efforts to get borrowers on good standings is progressing.

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