Monday, April 22, 2013

Out of Touch Congressman Tells Homeless, Educated Debtor That He Supports Higher Education

On March 30th, I wrote a brief post about Tagean Goddard's coverage on mounting defaults. A growing number of economists and policy analysts are finally acknowledging that student loan debt, and the alarming number of people who are defaulting on their loans, is having an adverse effect upon the health of the economy. Indeed, younger people with degrees, who should have disposable income and the ability to buy homes, cars, etc., are unable to make these sorts of purchases. Even worse, some of these individuals, and we're not just talking about young, educated Americans, are barely surviving. (Incidentally, I wrote an article titled, "Young, Educated, Indebted Americans Unable to Purchase Homes," over a year ago about this very topic. In that piece, I interviewed Rick Palacios, Jr., a senior research analyst, at John Burns Real Estate Consulting (JBREC), who discussed the problem of young people being unable to buy homes and who are finding that they have to move back home with their parents after graduating from college).

Some aren't even fortunate enough to have the option of moving home. For instance, on my Taegan Goddard post, one individual recently explained:

I wrote my congressman. I told him how I am a master's degree holding homeless person who lives out of my car because my payments are over 80% of my income. I explained that at no point throughout my education did I ever qualify for grants. His reply? "I support education. See if you can get a grant." Clearly he didn't read my message, doesn't care and is completely out of touch with the common person. I have to rely on this individual to represent my interests and it scares me to death.

Cryn, you mentioned having hope for our cause after speaking with key people on the hill [sic]. I certainly hope your feedback was better than mine. We're dying out here. Literally.
These notes are beyond infuriating. Who in this office decided to send out a form letter about the Congressman supporting higher education? How is that, in any way, related to a person who is homeless with a master's degree, and has student loan payments that are over 80% of his/her income?!? This response illustrates how sorely out of touch most policymakers and politicians are in D.C. In the very least, the staffer in this office could have sent a letter expressing regret about this debtor's predicament. But I guess that's expecting too much, isn't it?

That said, I do believe it is critical to hold onto hope. After all, this crisis could easily be solved. In my view, it is critical to remain focused on the solutions, rather than going on over-drive on the critiques. Of course, the critiques should continue, but they should be followed with a set of viable solutions. On that note, shortly after the elections in November of 2012, when strong leaders like Elizabeth Warren won, I wrote - yet again - a short, policy-oriented piece over at Spare Change News that offered sensible solutions for student loan reform. I'd like to know if any offices on the Hill are considering these approaches. After all, there are several that I know for a fact care about the student lending crisis. Surely, the topic is no longer too hot to handle, as it was several years ago when I made some of my first visits to the Hill. But perhaps I am mistaken . . . 

One thing is certain, the focus on solutions is something you'll find in my forthcoming book, Higher Ed, Greater Debt.

How do you think we can solve the student loan debt crisis? What other plans could be implemented to help struggling borrowers?


High Arka said...

There are any number of reasonable solutions, but as they'd all involve taking money from the only available place--the thieves who arranged the education-loan scheme--they would necessitate first radically restructuring society.

We could use racketeering laws to imprison university and K-12 administrators, bank officers, big employers, and other such loan sharks for deliberately creating the illusion that buying degrees would result in salaries.

Or, being really fancily "economics PhD" about it, we could apply a negative interest rate, taxing accumulated holdings above a certain amount--say, $10 million US--and using the resulting super-surplus to pay off all student loans, solve all other social problems, and feed Africa for a century.

Unfortunately, trying any of those would result in the cons calling in their muscle, and the police/military would eliminate any dissenting proles.

Wealth and Power.

Anonymous said...

I think college education is a good thing, but we have a bit to much of it in this country at the moment. I see the present student debt crisis as a brutal but necessary process by which our higher education system can be right-sized.

Anonymous said...

In my opinion, while the student loan scam has few if any simple solutions, our greatest obstacle is not whether we agree on a resolution, rather it is the fact that many of our politicians in Washington refuse to even address the problem to begin with.

The big student lending banks (including main player, Sallie Mae) spend millions of dollars annually, sending their lobbyists to DC who, with their large pockets, bend the ears of representatives who love their campaign funds more than the well being of this country and her people. Indeed, they have leveraged their most sacred position as leaders of the free world to sell their souls to banks who are able to purchase from these greedy politicians the very self-serving laws that are keeping us in oppressive financial servitude. It is repulsive.

As most of us know, many bills designed to alleviate the student debt crisis have been introduced to congress, only to be ignored as if those of us suffering are only pesky little ants crawling beneath their Italian leather shoes. They don't acknowledge these bills because not doing so earns them financial rewards from Sallie Mae and the like. Let us not forget that John Boehner, the very leader who pushed for student loan oppression also has a personal reason to ignore us: his daughter is a Salle Mae employee.

If our votes even count anymore, we must first relieve these individuals from their positions by voting in representatives who will honor the cries of the citizens of this country and do what they are supposed to do: protect us. We could come up with the most perfect solution to this crisis - but if the House refuses to even acknowledge it, it doesn't really make any difference whether out plan was good or bad. In the meantime, as Cryn stated, we must keep alive the hope for reform and fairness.

Anonymous said...

Your comment is BRIMMING with retarded goodness. "Super-surplus" indeed.

People would simply stop working. The problem with economic illiterates like you is that you don't understand the difference between shearing the sheep vs skeletonizing it piranha-style.

Anonymous said...

Easy, sensible solutions? I'm sure.

Cryn might as well just write a check for 1 trillion dollars.

And you are a blithering idiot if you think Elizabeth WARREN gives a shit about student debt. That fat fuck is the biggest financial parasite in America. And a phony nickel-plated Injun to boot.

Anonymous said...

What's wrong with the Student Loan Fairness Act that has yet to be addressed? Both debtors and lenders are held accountable. Debtors have the dignity of an ability to repay, and lenders get money. Some money is better than no money. Sure, they don't get the crazy 20% collections fees they've been charging, but those never should have been allowed in the first place. At least debtors could, in addition to paying their student loan debt, be able to live and contribute more to this halted economy. Some progress is good progress.

High Arka said...

The Student Loan Fairness Act is the equivalent of the Affordable Healthcare Act, the Troubled Asset Relief Program, or the Iraq "surge": it uses still more taxpayer dollars to further subsidize the thieves that fabricated the original problem.

If a con steals 500 billion dollars, you don't "punish" him by making him give up ten or twenty percent of his life-destroying profits. In fact, running cover for racketeers is helpful to them--it provides the appearance of something having "been done," which mitigates social unrest that might otherwise force real policy changes.

...which is why, in America, we'll see a show trial, the punishment of a few sacrificial lambs, and then everyone will conclude that something was done and the process will repeat itself.

Anonymous said...

High Akra,

I do agree with you that it protects the very vultures who have been profiting from this crime but with the uninformed public view being that of disdain toward "those darn students who should have know better," we have to have some kind of compromise. I do want to pay what I owe. I didn't work this hard to become a freeloader... But with every term, rule and law designed to make me fail, I need something to swing in my favor to make it possible.

Frankly, I think the lenders (at least in the private loan sector) should be required to eat it, but they won't, and we know that. In my layperson's opinion, the taxpayer has already funded this disaster. Just write the whole thing off and let's get in with our lives. But like I said, that would never fly with the public because somehow, this is all the teenaged students' faults for not understanding te intricacies of contract law when they signed in the dotted line and for furthermore, having no idea that even if they had understood those promissory notes, they were still being lied to by omission since truth in lending is somehow also exempt from student debt.

I do still hold hope. I do believe that something will have to break, I just don't know when it how.

High Arka said...

Dear 12:04, "compromising" with thieves and liars will only encourage them to take advantage of another generation. If it helps, imagine that I say that as someone with no student loans, and who stands to lose if the thugs are punished. It is still the right thing to do. Even if we can bear our own burdens, it is not right of us to expose so many millions of young people to the same crime. Compromising would be like demoting Hannibal Lecter from principal of the elementary school to mere assistant principal.

You're absolutely right that "the public" is uneducated on the issue, as well as deliberately misinformed. It took decades of careful work to build such staggering ignorance and callousness, and it would take decades more to reverse it. Any solution that would be realistic right now would be as flawed as the climate that produced it. Like watching millions of people ready for a change from George W. Bush vote in a saber-rattling free-trader backed by Goldman Sachs, it is indicative only of system perpetuation.

Since we're discussing debt, think of our society as a single person deeply in debt. Addressing our problems--getting a job, working overtime, and suffering fiscal misery for years--will not be fun.

Getting one more credit card or auto title loan, though, is far more realistic, and a great way to compromise--for a few more months.

Anonymous said...

Yeah, the whole thing is a mess. High Arka, thanks for seeing the light even if you really do not have debt. I agree with what you say, but as someone in a crisis of my own, I guess I am just really desperate for a solution. As the years tick on and I still can't progress - no house, no car, no kids... My life starts go feel like a waste and I just want the ability to make this right and move on.

Anonymous said...

I think that, in large part, the present student loan crisis is the result of a collective delusion regarding the practical value of education. Law schools have been producing far more JDs than the market needs for more than 20 years now. Yet people keep going to law school, like lemmings off a cliff.

Joan King said...

That homeless grad student should have "networked" harder.

High Arka said...

/hug @ 3:33

This one won't blame you for trying to take an easy way out, even if it's systematically wrong. Once you back people into a corner, what do you expect they'll do? I'll lecture you on why society should be restructured instead, but if you ignore me and advocate for a slight reduction in interest rates, I'll understand why you had to. :)

Anonymous said...


The person in question has a job. I'm doubting that networking would obliterate debt... Unless your network includes a member of congress...

Anonymous said...

Joan King is a troll more or less and a hangover from the Campos Blog.

She used to post the same stuff about networking on the Mr. Infinity Blog last year (August 2012) before Infinity suddenly removed his blog the morning after telling Painter that he wanted to drive Painter to suicide.

So don't pay any attention to Joan King.

Anonymous said...

@1:30 Why should we feel sorry for people who can't pay their student loans? If you borrowed a lot of money to pay for a degree you were wagering that your education would land you a good job and make all the loans worth it. If things didn't turn out the way you hoped, then guess what, you rolled the dice and lost. If you welch on your bet then it's time to call in Tony Soprano.

High Arka said...

Anonymous, response here: Loan-Sharking Students.

Anonymous said...

High Arka,

Your response was amazingly accurate. One of my biggest complaints is that there have always been fail safes for people who are cheated out of their money; except for students. Those who purchased homes using high-risk mortgages were at least able to foreclose and rebuild their lives. I made a mistake - I didn't get addicted to drugs or murder anyone, rather, I went to school like every respectable person told me to do. Heck, I couldn't get promoted at my workplace and make a somewhat "liveable wage" without a college degree (of course, people of the older generation who had been there for 15+ years were exempt from this requirement but my generation was somehow subject to such discrimination). I don't get to rebuild my life like the home buyer. Nope. My life was over at age 25. I exist only to give money to banks for loans, taken in good faith, that will never be repaid in my lifetime thanks to usurous interest rates. Even though I am making my minimum payments, my loan balances are actually increasing and will continue to do so for the first 15 years. Go figure.

Somehow, buying a house using a bad mortgage makes you a victim (and you are) but going to college makes you a criminal. We are a severely screwed up country and I fear that we are slowly but surely reaping what we have sown.

It is incredible to me the power that these corporate banks have had over the thinking of our people. I have to hand it to them, they are good at what they do. Not only do they con us out of our money and con Congress into allowing them to run amok, they are also able to psychologically manipulate the masses. By stroking the egos of the self-righteous, they've turned our country's citizens against each other while they roll around in piles of everyone's money, laughing.

It is sick. Sick, sick, sick.

@Anonymous April 28, 1:06 p.m. You are just another game piece in their quest to own us entirely. They love your callousness toward us. They groomed you to be that way so as to facilitate their greatest con. Keep up this attitude and see what happens when your/our tax dollars and our incomes filter into their pockets. We'll all be living like serfs, whether we took out student loans or not. I'm sure that once you feel the effects of this epic crime, you'll care. Until it affects you personally though, you won't. Don't be too hard on yourself about it. They taught you to be that way.

Anonymous said...

I would also like to say that students did more than roll the dice. They made what they believed to be an educated decision for which the odds were in their favor. This cannot be compared to a casino where it is common knowledge that the "house" always prevails. Most debtors went to school in a good economy when it was reasonable to assume that some sensible form of employment (even if not in their chosen field) would exist. Are you saying that since students rolled the dice and lost, they should be economically, emotionally, mentally and physically oppressed until they die? Is it fair that they should not be able to have children because their "safe" risk did not turn out as planned? Good luck living your life without a soul!!

Anonymous said...


I feel so fearful these days, and I found this recently and I am almost sick with worry and fear and can't help viewing David Ramsey as a very frightening guy:

Anonymous said...

@11:35 The reason student loans are not dischargable through bankruptcy or foreclosure or whatever is bcause student loans are seen as an entitlement in a way that other debt is not. When apply for a mortgage or a small business loan the bank has the right to not lend you the money if they think your a bad risk. Everybody gets student loans regardless of the likelyhood of repayment. The flip side of that is that student loan debt never goes away. So if you think putting yourself 30 grand in the hole for a degree in comparative literature or whatever is a good plan you can do that, but if you can't make the payments, well, to bad for you.

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