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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?


  1. What about simple interest, fees and late charges are minimal and not capitalized, interest may not be capitalized, required percentage of every payment applied to the principal,and extra payments to pay down the principal should be rewarded, not penalized?

    What about an industry that does not view student borrowers as "an income stream", but as, truly, our future?

    J., I have enjoyed reading your blogs here and at FSLD. Thanks for your sane and level-headed approach.

  2. Dear Dorothy,

    You bring up some great points and ideas. I like them all. Underlying all of what you have said is a wellspring of creativity - that will be necessary to find new and better ways to finance, refinance and educate our population.

    You can be assured that I will continue to do my best to present all the relevant information and thoughts that I can about the student loan disaster our country is facing.

    Warmest Regards,
    J. Densmore

  3. I have started blogging at 'Student Loan Nightmares'(http://studentloannitemare.blogspot.com/), but am VERY new at this, and the blog is VERY rough... I do admire your and Robert's work ;>).

  4. wow...read the "politically incorrect guide to capitalism" you'll learn REAL fast that its the government intervention to blame...REAL fast!

  5. Dear tinaf07,

    Please explain what you mean by your statement. How is government intervention responsible?

    All the facts that I have encountered to date indicate that a complete lack of regulations and a removal of previous regulations that have yielded the mess we have today.

    J. Densmore



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