Daily Updates and Insights

UPDATE: 01/11/2012 - We are all still screwed. Other priorities created by the powerful elite have distracted our great nation from dealing with student loan debt in a responsible manner. Be sure to vote in 2012 - put progressives back in charge of the Congress and then scream like hell at them to get done what you want!


Sunday, February 28, 2010

Recipe for Disaster

At this point in my search for solutions to the crisis in the student loan financial system I find that I can no longer avoid talking about the type of economy we have in the democracy we live in.

I will keep this simple so here goes - why do we think it's in the best interest of our democracy to let capitalism run through every aspect of our economy like a runaway train?

All the Enronesque scandals should prove that capitalism is not something that belongs in every aspect of our economy. It has ruined health care and it is quickly crippling the student loan financial system. The time has come - I hope we can all see this - to end the use of capitalism as the answer to all our economic needs.

We need to protect the future of our society from the greed and avarice that has so tainted the late 20th and early 21st century. Higher education should NOT be a system of winners and losers -  a dichotomy that capitalism inherently creates. Rather - it should be a system where we efficiently and cost effectively educate our bright minds to keep us competitive in the global marketplace and human society as a whole. With such an emphasis on information and technology for the future - we are getting the higher education system so wrong that we may soon find ourselves out of the race to stay relevant - let alone competitive. Creating massive debt for our students before they are given the chance to create a better life for us all does not make sense in a sustainable economy.

I fear that we have become so blinded by the 'strong shall survive' dogma of purist capitalism that we are no longer able to see the precipice that we are headed for. We have taken some of our brightest minds and wrapped them up in so much debt to the point that their intelligence has been neutralized - leaving our greatest national treasure laid to waste.

Wake up America - student loan borrowers everywhere are living in a disaster area called their lives. And the student loan system is on the brink of collapse because of a job market that may require, according to the federal government, 2 to 5 years to improve. In the midst of all this - our leaders in Congress and the White House are silent on the issues.

Does anyone else have a different recipe for disaster?

Friday, February 19, 2010

Hitting the Mainstream

Recently the Wall Street Journal online has brought some attention to the perils of student loan debt with a few articles. They can be found here: The $555,000 Student-Loan Burden, The Student Loan Effect.

This mainstream attention to the student loan crisis is a much needed shot in the arm if Congress and the White House are ever going to take notice and lend a hand.  And while this spotlight may not always lead to a positive experience for student loan borrowers it is a necessary step in the right direction.

If one takes the time to read some of the comments left by readers of either of these articles, it will be quickly realized that many people have unflattering things to say about student loan borrowers. I would like to suggest to student loan borrowers everywhere that these are precisely the people we need to hear our message. These are precisely the people we need to educate and change from distracters into supporters.

In order to get people to support our cause we need to first meet the negative comments head on and challenge assertions and assumptions about student loan debt and the student loan industry. Until each and every one of us with student loan debt begins to get active in this way - those of us out here ringing the alarm bells will remain those crazy, lazy people just spouting off about their problems.

So please get active. Write your Congressmen, your Senators, your President. Write to your local newspaper. Comment on blogs and newspaper articles. Write your student loan company. Speak to whomever will listen because our collective voices can make a difference and effect a change in consciousness on this issue but WE have to make that happen.

Join me in making this happen - comment here today. And let today be the start of your own voice for relief from student loan debt.

Warmest Regards,
J. Densmore

Monday, February 15, 2010

Tis the Tax Season

In preparing my taxes for fiscal year 2009 I have come to an understanding of some things I thought I might share with all of you. Forgive me if you already know this.

If your long term struggle is to pay off other debt or your student loans first then here are some tax tips.

Your student loan interest is tax deductible up to $2500 per year. This deduction taken before your itemized or standard deductions - so you get to take the deduction whether or not you itemize.

Taxes and interest on your home are only deductible if you itemize so pay your home mortgage off first - especially if your interest rate is higher on your mortgage.

Something else to keep in mind - if your student loans are federal - it is again in your best interest to pay the home of first. In this way - if you pass away - your spouse is protected from your debt - because federal loans are forgiven upon death.

If anyone has any other tips or thoughts on the issue please feel free to post your follow-up comments here.

Warmest regards,
J. Densmore

Saturday, February 6, 2010

The Unforeseen Consequences of Student Debt

When you set out to achieve your dreams to get the college education that your parents didn't get or couldn't have the benefit of remember this - the fairytale of the magical college diploma leaves out a few things.

When I decided to seek a graduate degree I thought it was the right thing to do for my future. I had a dream of helping people and to get there I was going to need an advanced degree and the help provided by student loans. I know now that I was so very naive - that nothing comes without a price in this world. All too late I am learning that my dream was a mirage and that student loans can be the worst thing to ever happen to you.

My wife and I are at a turning point in our lives. We are both getting older and time is running out for us to have children of our own. Complicating this picture is the fact that she is stuck in a dead end job that offers no retirement and no possibility for advancement or significant pay increases. Her current job pays modestly and provides little in the way of personal reward or intellectual stimulation either. It is deadening to the soul for her to stay there but - like so many Americans - it has kept food on the table and kept her out of debt.

So before us is the fact that I have approximately $120,000 in student loans that are choking my income - our income - and there is no real relief in sight. With the 'repayment' plan I am on, the payments will only rise over time making our financial situation only more difficult. (The new IBR plan Obama proposes offers us no hope because her income is still part of the formula). My own job will see some modest pay increases over the next few years but not in the way to make any significant disposable income available.

Before us then is a choice to have children or not OR for her to back to school or not OR for us to play it safe and not do either because of the depressed state of the economy and my student loans.

It seems that we are damned no matter what we decide. We could send her back to school but the program that she has been accepted to will cost $30,000 over the next two years. Because of the intense nature of the program she would have to quit her job. All for the 'POSSIBILITY' that she would have a better job in two years and POSSIBLY a better rate of pay and maybe a pension and maybe some personal reward to it.

And as I have urged others to be specific - her plan is to get a specific degree targeted for a specific salary at the end of a specific time period. But all of it is predicated on a bunch of 'ifs' and 'assumptions' and should anything go wrong - we would be totally, and irrevocably screwed financially. For us to lose her salary would put an immense pressure on our already strained income and modest savings. All for a dream and a bunch of assumptions.

I don't want to focus too much on the job issue because this would cause us to ignore our desire to have a family. There is little money for this however or time even left to make the decision before it is made for us.

So our lives are at a crossroads - what do we do? Do we risk a soul killing job in the hand for a dream in the bush? Do we have children right now and throw caution to the wind and assume somehow everything will be all right? Maybe the government would help us - yeah right!

How, in one of the wealthiest countries to ever exist, did we get here?

The greatest pain for me is that my student loans are at the center of all this. Without these loans she could go back to school. We could have had a child already. Money would not be at the center of every ache in our hearts if it wasn't for these loans - and for the stupid, childish decisions I made earlier in my life.

I don't mean to sound completely sour on higher education mind you. While I have benefited on an intellectual and personal level from my education however, it hasn't been worth it financially, socially or familial-y. If I had it to do over again with what I know now - I would have foregone college from the start and waited until I had the money in hand before ever thinking of a higher education.

The government's help with plentiful student loans and no protections in the event that life's inevitable missteps would occur have shackled my future to the point of choking the life out of it. It is very likely that my wife and I will not be able to afford to have children or be able to send her to college. All because I signed on the dotted the line years ago and didn't really know the true cost of those loans. But as former President Bush was quoted to have said when asked about his drug use in his youth - "When I was young and stupid I was young and stupid."

That being said - my gift to anyone starting out is a word of advice. Given the state of the economy as it currently is - unless you have an inside line on a job when you graduate or parents to pay for college and save you the debt - WAIT to go to college. Wait until you have the money because there are very real, unforeseen consequences of student debt just as there will be unforeseen happenstances in life.

The unforgiving and enslaving system of financing higher education that we currently have in place is not to be trusted. Understand this - because your entire life and your hope of finding immortality through your own children just might depend on it.

J. Densmore

Monday, February 1, 2010

Send Letters to Your Congressmen and Senators

In light of President Obama's pledge to help student loan borrowers I submit the following form letter for use in contacting your own local representatives in Congress.

"Dear Senator, Congressman, Congresswoman etc.,

President Obama mentioned in his State of the Union Address that no one should have to go bankrupt to pay for an education.

Given the President's desire to help student loan borrowers I would like to know your stance on student loan borrowers' issues.

Do you support student loan forgiveness as a way to stimulate the economy? Do you support returning bankruptcy protections to all student loans - both public and private? Do you support the call to reduce the rate of interest on all student loans down to 1% - the same rate banks are allowed to borrow money at?

If you don't support any of the aforementioned proposals, just what help for over-indebted student loan borrowers do you support?

Furthermore, from what interests within the student loan industry have you accepted contributions, if at all?

I would appreciate it if you could give my inquiry its due respect and respond directly to my request - and not through the use of an assistant or intern.

Regards,
Your Name Here"
 

Budget Plannerfrom Mint.com