The Writing on the Wall

At the present time, it appears very little is going on in any of the student loan reform movements to address the needs of student borrowers. It may be because the President and Congress have an economy in recession, a war going on, and a fight over health care before them. I get the feeling however that the same would be true without these distractions.

If I were to read the writing on the wall, more specifically the Sunday newspaper and Alan's book, then things can't be going very well for student borrowers in terms of debt and default.

The first sign was something I read in Alan Collinge's book, The Student Loan Scam, which I have translated into the following bar graph. As one can see, the use of federal student loans is growing rapidly - which in turn, by the percentages, translates into more student loans in default or struggling to tread water. The graph shows the amount of federal student loans made in 1979, 1989, 1996 and 2008 respectively. This is only for federal loans, not for any private loans that are not covered under the federal umbrella.

The steep rise in the amount of federal loans being made would indicate that students are taking on more debt to get their college degrees. Though it is certainly true that more and more students are going to college these days I don't think the growth in numbers of college students accounts for this increase alone.

To go along with this rise in student debt, the front page of the classified jobs section of The Buffalo News for Sunday January 10, 2010 had four large ads that each occupied 1/4 of the page. Two of these were ads were for collections services promising all kinds of benefits including 50% commissions, vacation pay, health insurance, paid holidays, day care and the list goes on. One of these ads was specifically seeking people with experience in student loan collections!

This is the first such time that I have seen a job ad for a collection agency seeking people with this kind of specialty. I was also shocked at the kind of benefits these places were paying. Business must be good for student loan collectors.

This can only mean its not going so well for many student loan borrowers. Furthermore, the brazen front page nature of the ad, seeking specialty in student loan collections, seems to imply that student loan borrowers are acceptable collection targets, social castaways that should have known better.

I think student loan borrowers need to work together to make our voices heard. We will continue to be the treated as the forgotten unless we make people understand why our debt deserves the same protections as every other form of debt.