There is a collection of short blogs about student loans in today's New York Times. I was one of those contributing to it, but after editing, my essay was watered down a bit, and I coudn't help but feel somewhat unsatisfied with what ended up in print.
Which is why I am here...to present what I would have written if I had free reign and no editor(Mmwwaa ha ha ha....)!!!
Enjoy. The facts put forth here are easily sourced if I am pressed to do so....come to the website Studentloanjustice.org to find out more.
The following is not pleasant reading for prospective students and their families, but it is the truth. I hope this helps students make better college choices. I really hope, however, that at least a few ambitious students will see this as a call to citizen action, and respond accordingly.
In the 70’s, loans for college barely existed. Today, Americans are saddled with $700 billion in student loan debt. This is due in large part to a predatory lending system that our Congress created- a system that is forcing citizens to live "off the grid", delay having families and buying homes, and even flee the country! Think this sounds like exaggeration? Read on.
Student loans are the only type of loan in our nation’s history to be stripped of bankruptcy protections, statutes of limitations, refinancing rights, and other fundamental consumer protections. Simultaneously, the student loan industry has been given collection powers that would "make a mobster envious" in the words of Harvard Professor Elizabeth Warren. Far more money can be made when students default on their loans and are hit with penalties and fees that can easily double or triple the debt.
The effects of this are disturbing. On the lender side, we see predatory activities, such as lenders defaulting loans without even trying to collect on the debt. If you have any doubts that this industry is run by loan sharks, just visit a well regarded student loan collection companies website for 10 seconds: www.premierecredit.com (punchline upon viewing site). At universities, we see tuitions rise at double the rate of inflation every year.
Among borrowers, we see senior citizens losing their social security income, expatriation, and even suicides by those whose loans exploded to unreal proportions, and for whom all other options were removed.
Though brushed aside time and again by the lenders who lobbied for this system, the universities, and even the Department of Education (who make a 20% return on principal for defaulted loans), one fact cannot be ignored much longer:
About one-third of all borrowers will default on their student loans- perhaps more (don’t believe the 5-7% default rates you may have been told).