In the last several weeks I have become more and more aware of some undertones developing in the discussion about student loan reform. I find these tones disturbing because they threaten the cohesive nature of our message to Washington.
One tone is about private versus public student loans. Some people are insisting one form is worse than another. Well folks - $120,000 in student loan debt sucks any way you slice it. If you are making $10 an hour at some dead end job - it doesn't matter how many more fees, fines or interest they tack on. If you can't make the payments now you certainly won't be able to make them two years from now - public or private - unless something substantial changes in your financial life. I have $120,000 in public loans and all my payments last year went to interest and the overall debt still grew!
So please if your loans are private don't start commenting how much worse you have it than the other guy because that is exactly what Sallie Mae and the other bucket heads in the banking industry want to happen. They seek to divide and conquer our collective voices. If they succeed the pressure on government to reform the student loan finance industry will go away. So before you post or comment - please think about the larger movement and what needs to happen to fix the larger problem.
Furthermore, it doesn't matter if you are an older student with loans or a younger one. We were all sold on the idea that college equates to more financial earning power and a better way of life. While it may seem pathetically naive to believe at 30,40 or 50 (versus the 18 yr old just out of high school) that a college degree equals money in the bank remember this fact: the age old story that college graduates earn upwards of one million dollars more in a lifetime has turned out to be an opinion based on little fact at all. Recent estimates make the actual difference more like $250,000 and that's only if your loans don't exceed the average.
In addition, with government and private industry both selling the propaganda that an investment in education is a way up and out for all - it is little wonder that just about everybody is willing to hoc their future for a college degree. Propaganda is powerful and all minds are susceptible. Age doesn't matter nor does intelligence sometimes.
So regardless if you have been snookered at 18 or 60 and find yourself now burdened with private of public loans that are destroying any life that you thought you might have keep in mind that we are all being treated like second class citizens.
Remember the truth when despair sets in - student loans are the ONLY type of loan that can NOT be discharged in bankruptcy. Student loans are the only type of loans that allow the lender to hit you with absurd fees and fines if you can't pay - which only makes the situation worse. Student loan lenders are the only type of lender incentivized by the federal government to get you into default and keep you there.
Finally - remember this - YOU are NOT ALONE! Fight back - learn and education yourself at every turn and start to develop your own voice. Until we all learn to stand up and say no more - we will all continue to suffer in our shamed silence.
Monday, March 8, 2010
Subscribe to:
Post Comments (Atom)
Posts
We need to not only support direct lending by the Dept of Education, we need to press HARD to get the accounting rules changed, because currently, interest, fees, and charges are capitalized, increasing the principal, and then the interest while 'payments' remain so low that they don't even cover the interest.
ReplyDeleteSince the rules allow the SLL's to apply payments to the interest first, NOTHING ever touches the ever growing principal, or the interest... It becomes mathematically impossible to pay off. It is TRULY a system rigged to create perpetual debt.
I agree with you - we need to get loud and get VERY active.
Student borrowers must also not succumb to the mind-numbing propoganda that we are 'dead-beats': we need to stand up and get mad - constructively. I refuse to go into retirement wondering how much of my Social Security is going to wind up in Albert Lord's golf course!
Very well said Dorothy. Thank you for that insightful perspective.
ReplyDeleteI hadn't thought about that particularly - yet. What you have said makes a great deal of sense. If the student loan industry was truly out to educate then applying payments to loans - that paid tribute to principal first - would make more sense.
Thank you so much!
Warmest Regards,
J. Densmore
I agree--we need wide solidarity, not everyone trying to have only their own specific circumstances dealt with. There is a danger that some watered down 'reform' measures could make the less desperate feel alleviated enough to drop out, and leave those of us truly at the bottom to rot.
ReplyDeleteSuicide seems the only thing that will end the visious cycle of student loan debt and collections. My family and I will become homeless on May 1st due in part to relentless persuit of student loan repayment. When I die they won't get the money either as I have NO assets at all, but I won'y have to live daily knowing it is hopeless. Giving up
ReplyDeleteDear Paul,
ReplyDeleteIn the not to distant past, I have written on my blog about such extreme responses from some student loan debtors.
Before considering such a drastic 'solution' please seek help with an appropriate professional - who might be able to guide you out of this feeling of hopelessness.
I would like to say also that there is an undue hardship clause written into federal student loan laws that presents the opportunity for forgiveness when such situations arise. Losing one's place of residence and the economic pressure placed on your children may be cause for a review of your student loan situation.
Since I do not know what type of loans you have all I can suggest is to visit a lawyer and find out what your specific rights are for your situation.
Please don't give up - make your voice heard - contact your local officials and tell them the hard time you are having.
Together - we can make our voices heard. The worst thing we can do is to let the financial predators at the top of the student loan food chain silence us - any of us.
Talk with as many people as you can about your situation and let them know what has happened to you because of these loans and the general lack of legal recourse available to you and many others.
You and your family are not alone but the student loan lenders would like you to think that you are. So take this opportunity to speak out - and help yourself, your family and everyone else suffering in a very similar situation.
I hope this finds you well.
Warmest Regards,
J. Densmore