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The one issue candidates are ignoring


Student Loan Amnesty


by Ken Mondschein



In the coming election season, you’ll hear a lot of talk about family values, freedom, and the American Way of Life, which is usually seen as hard work and sacrifice. The one thing that you won’t hear mention of is student loan reform.

But wait—isn’t it the American way to pay your own way? Nobody put a gun to anyone’s head to make them take out loans—why should we forgive people’s debt at public (or private) expense?

The fact is, loans are a necessity for paying for college nowadays, and a college degree is the de facto doorkeeper to a middle-class lifestyle. However, the average private college costs an average of $22,218. What’s more, the amount of scholarships available—especially to Joe Suburban Teenager—is nowhere near the demand. Accordingly, the amount of student loan debt in this country is immense—$477 billion. (Contrast this, however, with $5.6 billion a month for the Iraq war.)

In most every other industrialized country, higher education is at least partially paid for by the government (though this is changing with the current laissez-faire turn in Europe). In America, though, we don’t have a parliamentary system that, for good or ill, factors in everyone’s needs: We have lobbyists, and student loan corporations pay handsomely for representation in Washington. Accordingly, student loan lenders enjoy some of the most favorable conditions in the industry. Thanks to a bill signed by Clinton in 1997, student loan debt, unlike consumer debt, can never be discharged. They can even take payments out of your social security—and this holds true both for the wholly inadequate subsidized federal loans and for the private loans most students wind up having to get. What we essentially have is a system where a small number of companies are siphoning off a lifetime’s wages in exchange for fronting the opportunity to earn them in the first place—a postindustrial version of debtor’s prison.

These have a very real effect on people’s lives. While not everyone is so unfortunate as to be saddled with debt, those with high loans wind up paying in interest what they would otherwise be investing in the economy—or their own further education. Student loans put a dent in home buyers’ ability to qualify for reasonable mortgages. Bureaucratic cock-ups ruin people’s credit. In the end, it seems to be more sensible to go to a lower-tier state school—or even bypass college entirely—than to follow the “traditional” middle-class pursuit of high educational achievement. Furthermore, for those saddled with student loan debt, monthly payments make it more difficult to get married, buy a house, and raise children. “Family values,” my ass.

But the government isn’t the only one who’s been bought. . The schools have payola found themselves immersed in the midst of a payola scandal. To quote Generation Debt author Anya Kamenetz, “Lenders and schools have/had deals whereby schools would push students to a certain lender or lenders in exchange for kickbacks from the lenders.”

The fact is that the student loan industry hasn’t been playing by the rules for years—and in the end, this makes us all poorer as the middle class’s money is sucked into the coffers of a few corporations. The way out of it is to put more pressure on politicians than the lobbyists do to get candidates to promise to change the system. Increase subsidized loans. Lower interest rates. And take the private lenders out back and shoot them. In the wake of the payola scandal, , the Democratic-led House has already set an example by passing the College Cost Reduction Act of 2007, funded by reducing subsidies to student-loan companies. We’d like to see the Senate—and the presidential candidates—follow suit.


Ken Mondschein owes too damn much in student loans

Posted July 16, 2007 4:12 AM




Your student loans won't be forgiven or discharged because you feel they are unfair or that the lenders, who enabled you to attend your high-rent alma mater, may have been unethical. The facts are: - your interests would be the only ones served if your debt was erased. - the money you borrowed is real money, not imaginary; meaning we can't wish the debt away because it will be there until it is paid back. - if you don't pay back your loan, someone else will. If the lenders have been unethical, that does not grant you the right to be unethical as well. You are accountable for your actions sans imagined justifications.

Posted by: vic at July 19, 2007 4:05 AM

Agreed, except for your comment about a lack of scholarship opportunities. The problem isn't a lack of scholarships but the fact that loans are a much easier path to paying for tuition. Most students either don't have the time to apply to multiple scholarships or simply don't know they exist. Creating a global application system for scholarships would be a great way to cut back on loan amounts without getting Congress involved.

Posted by: Jeff at July 24, 2007 7:06 PM

Truth: Tuition costs have gone up more than 70% in the past ten years. You have to borrow more for education no matter where you choose to be educated!

Posted by: Keith C. Suhr at November 27, 2007 11:48 AM

A student loan is now necessary. The rules and terms of fair play and equality do not exist. Little is known or acknowledged about burdensome debt. Let me try to enlighten the ignorant: Loans start interest the day of conception, the interest can be compound as they are a "non-secured" credit loan, the interest is what "they" tell you it is, there is no "grace" period-as mentioned above-the intrust accumulates and is "averaged" when it is consolidated. When did anyone ever mention the word "grant" or "Scholarship" when needing money? I can tell you, it is not in the Institutions vocabulary. Also, try to miss a payment, or defer paying. It will get you bounced faster that cheating. One final truth: You pay (interest and all) with or without finding a job you were educated to do. Good luck of ethics, accountability and sans imagined justifications.

Posted by: Contender at December 1, 2007 12:23 AM

I agree wholeheartedly with your assessments. Student borrowers have be scr*wed bigtime. Instead of stearing students into low-cost loans, students have been driven into debt by financial aid offices. WE NEED AMNESTY NOW!

Posted by: Denise at December 31, 2007 2:16 AM

Your student loans won't be forgiven or discharged because you feel they are unfair or that the lenders"....????? WHAT are you talking about moron??? The fact is student loan companies are a HUGE scam, and they are unfair in many factors, and UNCONSTITUTIONAL-see the 8th Amendments ban on excessive fines, OK Mr. F lee Baily Jr! Boom! Spanked the student loan scam industry yet again!

Posted by: F Lee Baily Sr. at December 31, 2007 2:47 AM

While student loans barely existed thirty years ago, they have grown to crisis proportions unmatched in history. Since the 70's, the cost of college has risen at twice the rate of inflation and this increased financial cost has been shifted largely to students in the form of loans. Today, the average undergraduate borrower leaves school with $20,000 in loans, and the average graduate borrowers leaves school with $42,000. Concurrently, the federal government has removed nearly all consumer protections from student loans. Standard consumer protections like bankruptcy rights, statutes of limitations, refinancing rights and others have been stripped from student loans, and draconian fee structures and collection powers have been legislated into place that make it far more profitable for the lending industry when a student faces financial difficulties, through penalties fees, and even increased interest rates. Ralph Nader remarked that the corporate executives who devised this system should receive the award for shameless perversity. This lending system, which can only be described as predatory, has been exposed in recent months by the grassroots, our state's attorney general and governor, and even the U.S. Senate. Now, we must endeavor to return to college loans the standard consumer protections that have been taken away, demand accountability from the universities and lenders, and above all, make the system work again for the students- who are our nation's future.

Posted by: Alan Collinge at December 31, 2007 3:54 AM

I too am like you. I have debt they I may never be able to repay. Owing stuent loans is worse than owing the mafia or going to prison. It is a life long prison sentence for some. Almost every other indebtedness, excepting criminal acts and the resulting restitution, is able to be forgiven...why not student loans? Also, try these sites:

Posted by: Joe Foran at December 31, 2007 5:04 AM

Student loans are just indentured servanthood. I feel like a prisoner in my life. I agree that I got myself into this mess with my naive thinking but was prodded on by the school and financial aid administrators. It will take 25 years to repay even if I could which I can't. I will be 75 years old. I do not recommend college to anyone now.

Posted by: Penny Mac at February 22, 2008 7:43 PM



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