Friday, March 23, 2012

Why Is The Student Lending Crisis Being Ignored?

Here's is my latest article over at the Loop. It is about the band-aid solutions to the student lending crisis that politicians continue to introduce. Those who have graduated are pretty much being ignored. Read the entire story. It includes a phone interview with John Koch, and how defaulting on his federal loans affected his personal life. We need - as a country - to be offering assistance to people like Koch.


Debt has reached $1 trillion but politics hamper solutions
When it is election season, it’s always best to play it safe. But that’s not the only thing holding politicians back from taking bold measures to solve problems, such as the student lending crisis.  Outstanding student loan debt is now at $1 trillion and no relief is in sight. Why? The list of reasons is long – the corrupting power of money in politics, partisan bickering, the overwhelming influence of lobbying groups over the needs and wants of the American public, etc. – and more bullet points are being added to it and worsening the political landscape. Of course, politics in the U.S. has always been rife with problems. However, many seasoned staffers on Capitol Hill have noted that the partisan battles have worsened in recent years. Many experts bemoan the loss of bipartisan efforts – except, as they point out, when it comes to the two parties passing huge budgets for the Pentagon and the defense industry – and talk of the dangers of a political system that is a duopoly. 
 Read the entire article here.

Also, here's my latest interview over at Russian News (RT) about the student lending crisis.


Nando said...

Great work! I received an email two days ago, informing me that I may qualify for a "special direct consolidation loan." I consolidated a while back.

I looked up my accounts, for the balance info. I then entered the data into the savings tab. Apparently, I *might possibly* see a monthly savings of $4.61, or as much as $11.31. Ooooooooooohhhh! WOW!!

Doesn't that make you so excited, fellow student debtors?! How can you contain your joy, at this news. I pay roughly $490 each month. That amount of potential savings is a spit in the ocean!

By the way, I am doing better off in relation to many of my former classmates. Several of them are practicing law, and are scraping by in this world. In the final analysis, "reform" equals garbage.

We need an entire OVERHAUL of this sick, depraved $y$tem. Mention your student debt hell to anyone who will listen, i.e. family members, friends, co-workers, and ESPECIALLY younger people in high school.

Make them realize that: (a) they should avoid student loan debt, if they can, while still gaining some credential or college diploma; (b) if this is not possible, then they should do everything available to MINIMIZE their student debt; and (c) choose their majors wisely, if they enroll in traditional college.

Private businesses in this country generally want people with business, accounting, computer science backgrounds. If you choose to major in something you love, such as Literature, PLEASE keep in mind that potential employers may avoid you.


Gordon Wayne Watts said...

Cryn: The link on your 'Loop21' article, to your Blogger profile here, is a bad link -- but anyhow - to comment about your op-ed:

Good points, Cryn.

But you miss the key "cause-and-effect" relationship --in other words, yes, the problems you outline are important, but what solutions do you propose to prevent it from recurring?

Skyrocketing tuition is going through the roof (at a rate MUCH faster than inflation, even though this is no justification exists: Quality of American Higher Education has gone DOWN, as America keeps falling behind other nations in math, sciences, job skills, etc.).

But WHY?

Well, removal of bankruptcy protections from student loans, combined with draconian collection powers (such as wage garnishment) on already inflated original principals, combined with VERY heavy late fees, penalties, and interest, mean that the Department of Education makes about $1.22 for every dollar of defaulted student loans, and private lenders make a similar (if not greater) amount.

Since the Dept of Ed benefits more when students default, they have NO incentive to advise U.S. Congress to STOP raising the loan limits for Student Loans, and, of course, when students can borrow more, dishonest colleges & Universities "raise tuition to match" the increased borrowing abilities of students --even though not justified (quality of Education plummets).

This, of course, is known as distorting the 'Free Market,' bidding up (or 'ginning up) prices, and is akin to illegal sub-prime predatory lending, which caused a Bubble in Housing (which burst, as we recall? -and which WILL cause one in Higher Ed as well!).

Since use of tax dollars to make (and guarantee) Student Loans drives up tuition, this is bad:
A) It hurts students when tuition goes through the roof; and,
B) It hurts taxpayers, who are the ones *paying* for these loans to be made and backs. -LOL- Double trouble... Since college tuition has increased at a rate MUCH faster than inflation for decades, college is no longer affordable.

(there were other aspects about the legality I wanted to address, but I ran out of characters & must do a part II -- sorry -- see next post)


Anonymous said...

Thanks Cryn: You are a Great Journalist and Writer!

Anonymous said...

Cryn: It's a great article. You're not a star-chaser or a mouthpiece for anyone: You're a real, live journalist. I'm so glad you're doing what you're doing.