Tuesday, December 1, 2009

Yes, it's high time student loan borrowers were helped

November 28th has passed - the newbies are now facing student loan payment hell. I have already heard from a few new people who have joined our ranks. They're not happy, and they're having a helluva time paying their student loans and making ends meet. Honestly, I'm not sure how most people are doing it. I think it's safe to assume that most people are beginning to realize that they may soon fall off the grid and slip into that horrific realm that Mark Kantrowitz recently discussed. I call it Defaulter's hell. It's a devastating place filled with different types of devilish traps. Once there, people quickly lose all hope. They are ravaged and what they had been before - hopeful, energetic, adventurous - has died. Now they are wounded, howling beasts. Pathetic, isn't it? It's all thanks to an unregulated industry that continues to turn humans into angry, hopeless creatures.

Instead of discussing yet another relief program for mortgage holders, Tom Ranzetta over at SLA asked a question that I'd like answered: "So, what hope is there for struggling student loan borrowers?" 

And don't tell me about IBR again. It's giving me an upset stomach, not to mention that it bores me. We need more. A LOT MORE.

I think it's pretty obvious why no one wants to talk about the student lending crisis. It's related to the banks and bailing out Wall Street. It's related to the most heinous aspects of our broken, so-called free market system (Yeah, if it were so "free," you WOULD HAVE LET THE BANKS FAIL.).

How many more of us will be reduced to living out lives so destitute and miserable that we'd actually begin to envy all those cars filled with cattle going off to slaughter?


I know Bosch's work well, and he at least helps me imagine Defaulter's Hell. Shucks. Studying all that European history sure paid off - I now know what student lending hell looks like.

13 comments:

Anonymous said...

Why doesn't anybody see that struggling student loan borrowers could contribute so much more of their money to the economy by buying things if they didn't have to pay so much in loans? We have to make so many sacrifices just to make ends meet. We've given up our luxuries and even some necessities just to keep from drowning. Give us some relief, and we'll give businesses relief with that extra money.

Diane said...

Time for a revolt, it seems. How to do it is the question.

Ernest R. Rugenstein said...

Good questions asked and a lot to think about.

C. Cryn Johannsen said...

I absolutely agree, and even have a post about that. It's called "Why Corporate Sponsorship Makes Sense." I even got in touch with someone at Crate & Barrel, AND she had the courtesy to call me back! That was nice. Unfortunately, their budget for donations and charity had been maxed, but she did say to check back around the first of the year. That's when I was busting my ass to try and find grants and sponsorship for a 501(c)(5).

C. Cryn Johannsen said...

I think that's true. How do we effectively pull it off? How do we revolt in a way that won't hurt those who are already suffering (the borrowers)? What sort of strategic planning and collaboration could we design to say NO MORE. I'm just sick of us being marginalized. I voted DAMN IT! I mean, I realize that basically money is the only thing that matters in this city built on a swamp, but when you find yourself driving past and admiring monuments to people like Thomas Jefferson, Abe Lincoln, FDR, etc. on a regular basis, you can't help but think: "these ideals OUGHT to mean something." It shouldn't be as if these monuments of bold, daring leaders are entombing their radical concepts - I refuse to regard these structures as being akin to a gravestone or fine mausoleum. I suppose if that's the case. Well, we should all become gravediggers and stir up the spirits with our shovels and outrage!

Anonymous said...

At my house student loans in repayment equal OVER $1,000 a month. If I don't have to worry about that grand being there for loans & interest, I would spend it elsewhere. I could spend that on a new home (I currently rent), a new car, and a hell of a lot of Christmas gifts.

I sometimes wish I owned a bank or a home so I can be bailed out. At least the homeowners get bailed out & keep their homes. I rent so if I'm broke I move into the street. What I pay a mortgage for is a piece of paper on my wall.

This Christmas I am NOT spending, cause times are tough and we can't afford it. It's sad cause I have kids & this time of year is supposed to be exciting. I'm responsible & pay my bills & if I call to try to renegotiate rates with my lenders I am scorned for "irresponsibility", this coming from some lenders who THEMSELVES ARE BANKRUPT! Where is MY bailout?

As for the IBR, that doesn't do a damn thing for my private loans. So if I need to chose between groceries & private loan payments, guess which I'm going without? Somehow I don't recall my high school guidance counselor telling me there may be nothing but noodles in my future if I go to college to better myself. If I could do it over again, I wouldn't! Sorry to say, I've passed on this secret to a happy life, to my kids. Basically, it's not worth it. Not worth the time. Not worth the money. Not worth the stress.

Anonymous said...

I completely agree! If I had to do it over again I would have never went to college either. It's sad that what I worked so hard to acheive only got me to a job where I work so hard to pay for it and can't afford any other luxuries. I think I would be better off working fast food or in a department store. So sad and something needs to be done!

C. Cryn Johannsen said...

I'll found a new AND free school called AU - Autodidact University. It won't really be an autodidact system, but rather a peripatetic one.

Anonymous said...

One of these days I could lose my job if I ever get caught stealing that emergency roll of toilet paper. Ever since they started garnishing me, I am penniless and hungry a lot.

C. Cryn Johannsen said...

Oh, dear Lord - are you serious? That's awful! I am so very sorry. You deserve food and friggin' toilet paper. For Pete's sake.

Anonymous said...

I'm confused. Could any of the people commenting have gone to school without student loans? I couldn't have. Loans aren't bad, making bad decisions about how much to borrow is... You should have gone to community college and then to a state school if you don't think the investment was worth it. Do realize that most people HAVE to take out student loans to complete a higher education. Do you realize that the national default rate (although climbing) is less than 10%. Your arguement should be about the cost of education, not the means to which you chose to finance it. Get mad at the schools, not the tools. Waaaaaa

C. Cryn Johannsen said...

Anon - I appreciate your criticism. I encourage you to read my blog more carefully. I think the schools are also to blame and I've said so. I also am fully aware that most people have to borrow in order to get an education these days, so I'm not sure why you even made that point. Many of my readers did choose to go to community colleges or a state school, but are you aware that community colleges are so overwhelmed by student enrollment and are turning students away? Guess where they are going? FOR-PROFIT schools (that's another mess, and I won't get into in this response).

And most people who read my blog didn't make "bad decisions" as you suggest - they were also led to belief that they were "investing" in their future. But please come back and argue - I appreciate a healthy debate.

Conrad S. Bane said...

@Anonymous

It seems that you don't follow this blog, or any other sites about the student lending industry, very closely. There are multiple points being made here and in other places. One is that, yes, college is too expensive. And if you followed these things, you would know that tuition went up precipitously at the same time that Sallie Mae privatized and (unregulated) student borrowing skyrocketed. Cryn (and people like me) ARE mad at the schools because they funded a bloated administrative bureaucracy on the backs of student borrowers (like you). By the way, don't go quoting that national default rate as evidence that there isn't a problem. If a 26 or 30 y.o. is living in their parent's basement, sending all their money to their SL company but falling behind on credit cards, car payments, medical bills, etc., they're technically not in default, but not exactly making it either.

Further, if you followed these sites you would know that becuase the cost of community college and public schools has gone up so dramatically in the past 10-15 years that many people graudate from these institutions with burdensome debt, even those who work part- and full-time jobs during school. I recently read about someone in Michigan, the first college graduate in her family, who went to a public school and worked a full-time job almost the entire time, and graduated with $60k in debt - she believed that the investment was worth it, because she'd been told that her whole life. Now she lives in a state with upwards of 25% unemployment.

Finally, the other important point is that if America wants to keep pace in a rapidly changing world, it needs to remember that education plays an important role in remaining competitive, and that means publicly funding education more so people like you don't HAVE to take out loans. This is not about individual entitlement or "bad decisions," it's about our values and our future.