Despite what some experts claim, most policy makers and politicians accept that we are facing a student debt crisis.
In the next few days, I will be discussing ways in which the problem could be solved. But for now, I would like to hear from you. How should we solve the student debt crisis?
Stay tuned for my analysis, and thanks for sharing!
-Cryn
Founder & Exec Dir
AllEducationMatters.org
A non-profit organization dedicated to the eradication of all student loan debt through activism, education, and legislation; because student loan debt is dangerous to the US economy and to the health and well-being of individual Americans and their families. CRYN JOHANNSEN, Founder & Executive Director
11 comments:
Restore consumer protections to student borrows like all other unsecured debt. It's that simple.
Debt jubilee, then hang Al Lord.
Cryn,
Thank you for letting us know that most politicians understand that student loans are a serious problem. I've started really feeling down, feeling like nothing is going to change so your post today gave me some much-needed hope.
I believe that restoring consumer protections to student loans is a great idea. If bankruptcy protections are restored, however, I think they should be retroactive for debtors who have already filed for bankruptcy but did not have the loans discharged in the proceedings.
If consumer protections are restored, banks will be forced to work with debtors. Debtors will not be relentlessly pushed into default so that the banks can increase the balances by 50% (25% for default fee and another 25% for collections fee).
I think that usury laws (also a consumer protection) should apply to student loans so that students are not repaying 3, 4 and 5 times the amount they borrowed. Any unlawfully accrued interest should be removed from student loan balances.
There needs to be an adjustment in the amount of money a student loan company can legally ask a consumer to pay monthly (if a consumer chooses to not file for bankruptcy, assuming bankruptcy rights are restored). As a private student loan holder, I owe a couple thousand dollars per month (this does not include my federal loans which are $700 per month, but are in forbearance). I literally cannot afford that. I want to repay, but they've made it impossible. There needs to be a cap on what they're allowed to charge per month.
Another ideas: Make it unlawful for new employers to look up a potential employee's credit history because student loans can keep a person from obtaining employment. This is not a solution to the crisis, but it could certainly help especially on a micro level.
I frankly think the debt just needs to be abolished, period, if we're going to move forward as a nation, but try putting that past the "right." I'll keep thinking...
Bankruptcy rights sure, but at the very least a settlement and a moratorium on unjust interest, fees and penalties.
I think Suze Orman has expressed that idea over the last 3 or 4 years.
That is, if anyone still cares about Higher Ed and thinks it matters.
What about those of us who already paid back our student loans? Do we get reimbursed for that?
Anonymous above:
I wish you could. It would only seem fair, wouldn't it? Unfortunately, I don't know if that will happen. The only reason they give a damn about this (if they do) is because of the effect it's having on the economy - it isn't because they (the government) cares about whether or not the banks treated us fairly.
Thankfully for you, one or more of the following applied to you:
1. You found decent employment after graduation where hard work and sacrifice were enough to pay off your loans (even though it was probably tough)
2. You went to school during a time when tuition/cost of living was lower so your loans were not as high as many are today
3. You had help from parents or a relative, etc.
4. You worked through school, though many of us worked through school and it still wasn't nearly enough
Just be very grateful that you are in your position. I've given all of my paycheck (literally) toward my student loan for the last 10 years while being supported by my parents as a middle-aged adult, and it still isn't enough. My balances have actually grown. Will I receive reimbursement for what I've paid so far? Probably not. That's fine with me though - I just want this burden gone. I don't really care if someone else walks out of school debt free and I've had to sacrifice all of these years if it means I can have a second chance at life. I just want relief.
"What about those of us who already paid back our student loans? Do we get reimbursed for that?"
No you don't. That is why debt forgiveness or even bankruptcy for all will never be possible. But I do think there should be a limitiation of interest and fees. A Student loan balance should never grow to more than 50% of the original balance.
Those with doubled, triped balances should be able to settle the debts and have them capped at no more than 50% greater than what they originally were, less payments already made, if any.
I do not think anyone would object to that except for those in the best position to benefit from the obvious usury that has been taking place.
How much of the 1 trillion dollars owed is due to unfair, usurious interest and fees, penalties etc?
Going forward, Higher Ed needs to be revamped and the cost has to come down, and the lending system needs major reforms.
@August 18, 2012 1:10 PM
I wrote the August 17, 2012 8:17 PM post and I would be willing to get behind what you said about:
"Those with doubled, triped balances should be able to settle the debts and have them capped at no more than 50% greater than what they originally were, less payments already made, if any.
I do not think anyone would object to that except for those in the best position to benefit from the obvious usury that has been taking place.
How much of the 1 trillion dollars owed is due to unfair, usurious interest and fees, penalties etc?"
First anyone holding a medical discharge for their loan, signed by a doctor licensed to practice medicine should have it honored. If it was rejected for nothing else but lacking dates and those dates have been found, (in my case the day I was diagnosed as having polio and the day I no longer could work) the original discharge form should be accepted.
Cryn,
They should NOT be forced to gather and resubmit, new and current forms just because the forms or another part of the med-discharge process has changed.
Anyone in default, and living with a permanent disability, be it mental or physical in nature should be protected from garnishment period.
The simplest solution may be the easiest to overlook. If you don't go to college in the first place, you won't have any student debt to worry about. In other words, live within your means.
Dear "Live Within Your Means,"
That's a very romantic idea but in this day and age, one needs a BA to get a job mopping floors. The system has been devised this way so that there is little choice but to attend higher education. Many people who don't belong in college have to go if they're going to survive in this world - with so many degree-holding people out there, how else will they compete to feed their families?
Can you offer some suggestions as to how one can go about securing a living wage in the CURRENT society without a college degree? How can we work against this "pay to play" paradigm?
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