Streams

The Burdens of Student Loan Debt

Thursday, June 09, 2011

Lauren Asher, Founder of the Project on Student Debt, and journalist Malcolm Harris, discuss the parallels between the student loan debt crisis and the recent housing crisis. The price of tuition has increased 900% since 1978, making student loans necessary for most students seeking higher education. The total student debt—currently at $830 billion dollars—has exceeded credit card debt in the U.S. Yet despite the trend in growth, some believe comparisons to the housing crisis may have been blown out of proportion.

Guests:

Lauren Asher and Malcolm Harris

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Comments [27]

If any of you guys are struggling with student loan debt or need a place to vent out your frustrations we have a pretty sweet group set up on Facebook - http://www.facebook.com/groups/forgivestudentloandebt/

I ask that you please join our group of mostly college graduates as we educate and create awareness about bills currently being circulated in Congress regarding tackling student loan debt and other related issues. Your voices deserve to be heard!

Aug. 24 2011 10:18 AM
What % of each tuition dollar pays faculty ? from about $50 - $200 a course.


Tuitions have been increasing
(900% since the 1970s as per your report).
Oddly, more classes at many Universities are taught by adjunct faculty - who are hard working temporary employees - typically with no benefits or job security who often teach a full course load and work for less than the annual salary of the janitorial staff.

All universities who participate in student loan programs should be required to disclose how much of each student's tuition goes to pay the faculty who actually
teach the student her/his classes.
(This can be readily calculated on a spreadsheet).

Many adjuncts teach large lecture classes with 50 to 100 students and are usually paid a few thousand a course.

Students have a right to know.

Probably most of this increase goes to
highly paid University bureaucracy who
typically have little to do with the actual
education which students receive.

Perhaps a bunch of adjuncts should band
together to form a low cost university that
leases space after hours to use as lecture halls. (Or simply do most of the education on-line).

The U.S. should create a free online university where one could get a rigorous
undergraduate degree in a small number
of common majors. Even paying high
fees to lecturers, this would cost the country very little and return a great deal.
THAT would be the audacity of HOPE
in deeds not words.

Jun. 09 2011 09:16 PM
Biases in evaluating historical education premium from NYC


Numerous studies report an ASSOCIATION between higher education and higher wages. The question is, how much of this is CAUSAL ?

Students who got to college have many features in their favor before they step through the campus gates :

1) they're better students - eg. they often
have better focus/work ethic and fewer
disasterous immediate life distractions.
They also tend to be smarter, and
are less likely to have been involved in serious crime.

2) they tend to come from families that value education and hard work.

3) they tend to come from more middle class and professional backgrounds

4) they tend to have social networks that
include similar people - who can later be
called upon during their career.

At college they also meet more people with similar values and networks.

All of this is independent of whether college
is actually improving their ability to perform
well and succeed on the job.

How much would the premium be if one
controlled for family wealth, neighborhood, family occupation, prior
academic success in high school, and
serious life disasters during childhood,
adolescence and early adulthood (eg.
crime, abuse, substance dependency,
severe mental or physical illness) ?

One cannot assume that the association
between college and career success is
causal.

Jun. 09 2011 09:07 PM
Frank from New Jersey

I'm a blue collar kid and the 3rd eldest of 11 kids. When I graduated high school (1968) I did four years in the USN to GI benefits. The went to Newark State at night to get a degree.

More recently I took loans and am delaying retirement to pay for my children's college (Stockton State NJ).

Why are so many others not figuring out how to responsibly finance their goals.

Talk of blanket amnesty makes feel I'm a chump for doing the right thing.

Jun. 09 2011 12:50 PM
dboy from nyc

... there must be a way for banks to commodify student loans, similar to the crap shoot they came up with for mortgages.

Really! I'm disappointed!!!

Guys, get with it!

Jun. 09 2011 12:46 PM
scott from nyc

I like the way the banks wieseled thier way into student loans. compliments of the Great president that brought us the Iraq war.

Private student loans are like indentured servitude sold by some sleezy banker that you will never see.

Jun. 09 2011 12:42 PM
Michael from Bronx, NY

Here's how I paid off my $20k plus in undergraduate student loans within 6 years: took a job teaching in a low-income/high need area which deferred my loans without interest and forgave $4k. Coached after work/before grad school, and took another extra job for 1 year to make up $10k and pay everything off last year. Not an option for everyone, but service/in-school deferments and cancellations should be a consideration for anyone coming out of school with loans.

Jun. 09 2011 12:40 PM
dboy from nyc

We live in a very sick democracy, infected by rampant/perverted capitalism.

Schools/Banks/Government.

SICK.

Jun. 09 2011 12:39 PM
ken from LIC

What about kids taking out loans for the art programs... Does this make sense?? Historically art does not pay well....

Jun. 09 2011 12:36 PM
dboy from nyc

Another fine example of bank/govt. collusion.

If you you don't see the corruption here, you're BLIND.

Jun. 09 2011 12:36 PM
caleb johnson from Jersey City

How can the government justify lending money to banks at such a low rate while keeping federal loans so high? 4.5% subsidized, 6.8% unsubsidized?

Jun. 09 2011 12:32 PM
Arthur from New Jersey

Just started listening and I am not sure if you covered this.

The interest rate on student loans is out of line with the market.

My son just graduated law school and his loan interest rate is about 8% - ridiculous

Jun. 09 2011 12:31 PM
jawbone

Does the guest know anything about a story out of Sacramento about
Obama's Dept of Ed sending SWAT-type team to house to get ed loan payment?

Link for the TV station's story has disappeared, but here's a local newspaper story link:
http://www.recordnet.com/apps/pbcs.dll/article?AID=/20110608/A_NEWS/110609880/-1/a_news

Turns out the person holding the loans was not there, but the SWAT team broke in the door at 6AM, manhandled the loan holder's husband ouside in his underwear, then put the man and his three children, 3, 7, and 11, in a hot patrol car for six hours while they searched the house. Following is a quote from dept. of ed:

"Wednesday morning, inspector general spokeswoman Gina Burress provided the following statement:

"The Office of Inspector General does not engage in the collection of student loans. Our mission is to conduct criminal investigations related to the programs and operations of the U.S. Department of Education, which include the student financial aid programs. We can confirm that we executed a search warrant at the residence, however our policy is not to discuss details of our on-going work."

The Office of the Inspector General has a law enforcement branch of federal agents that carry out search warrants and investigations."

All came from Arne Duncan and Obama's Dept. Education, with muscle from the Office of the Inspector General -- money is apparently really tight...or some officials are really, really gung ho on collections.

Jun. 09 2011 12:31 PM
Kristin Anderson from Brooklyn

This has been a constant struggle for me. I finished grad school in 2005. I came out of school with $80,000 in debt when I only took out $66,000. I went to public schools, University of Illinois Chicago and Hunter College School of Social Work. The monthly payment of between $300-400 a month is very challenging living in new york city. I have already been paying my loans for 8 years and I am just now starting to see a dent (after paying interest off for some many years). As a social worker, I could barely make my payments with rent, bills, etc in NYC. I actually have switched careers and make as much (if not slightly more) money than the career of my degree. I have had to live in apartments in lower income areas and ALWAYS live with roommates, even while working full time AND having a part time job. Most of my friends still in social work, struggle GREATLY to make ends meet & school payments. All with this career being for the benefit / help of others in our community! Very frustrating!

Jun. 09 2011 12:25 PM
dboy from nyc

These institutions aren't even spending their profits on their staff or faculty. Hiring fewer full time staff so they don't have to offer any benefits to employees.

... a joke!

Jun. 09 2011 12:25 PM

Here's what I'm thinking of doing: start a small business (candle-making, jewelry making, nanny-ing, whatever) get a Small Business Loan, use Small Business Loan to pay off student loans. Declare bankruptcy. Yes, small business loans are dischargable in bankruptcy but student loans aren't.

Jun. 09 2011 12:25 PM
jeff


Does else anyone think that the main reason for the explosive rise in tuition..., is actually the increasing availability of student loans?

maybe students would be better off if there was less money available..., because it would impose a limit on the ability of colleges to raise tuition.

students would graduate with smaller loan balances.

Jun. 09 2011 12:21 PM
Emily Schroeder from former nyc, now sheffield UK

I am working on my second graduate degree because I was not guaranteed employment after receiving my first graduate degree. My loans are exponential. I did feel my only option was to continue with higher education because the job market was at its all time low. Given that the government has assisted the banks with bailouts, the government should look at statistics at the amount of students gone back to school due to the financial crisis and alleviate loans for students who had no choice but continue with school to not end up on welfare. The statistics for undergraduate loan rates are disillusioning as most need to go to graduate school to pursue higher level employment opportunities. We need to assess the fact that graduate school is not a leisurely activity or an optional route, but a necessary action to be middle class.

Jun. 09 2011 12:21 PM
dboy from nyc

Why is school so expensive??? Who ends up benefiting from these huge tuition rates? Banks and schools (HUGE endowments - HUGE real estate holdings, HUGE interest profits... NYU, Columbia etc, etc!!!).

This Kountry™ is a joke!!

Jun. 09 2011 12:20 PM

Hope I can get it done sooner than Becky's mom. Not sure though - I'm mid-fifties with about 20K in student loans and no way to pay right now.

Jun. 09 2011 12:19 PM
Jennifer from Flushing, NY

I'm glad someone is finally talking about this. It is ridiculous how much debt students must take on to get a bachelor's, which you need to get a job above poverty level. So when you graduate, you must work for several years to pay that off (rather than saving).

On a separate note, I work at a credit rating agency, and the ABS student loan securitizations have been the only deals in Structured Finance until very recently. And they are busy!

Jun. 09 2011 12:18 PM

Hope I can get it done sooner than Becky's mom. Not sure though - I'm mid-fifties with about 20K in student loans and no way to pay right now.

Jun. 09 2011 12:18 PM
Irma

Question: why has there been no serious investigation about Sallie Mae? My college offered no alternative to their specific type of loan which accrued interested while in deferment (others do not accrue this way). I was 20 when I signed on, had no understanding of this deferment issue and no one explained to me. If US cannot offer free state colleges as many nations do, they can at least offer interest-free loans with no hidden tricks.

Jun. 09 2011 12:17 PM
j.c. in NYC

last week a swat team busted into a persons home; terrified the family because the man's wife was delinquent on her student loans.

Jun. 09 2011 12:16 PM
The Truth from Becky

My mom just made her last student loan payment, last year, she was 75 years old!!! Always paid on time, in case you
re curious.

Jun. 09 2011 12:14 PM
JJ

I have 90 k in student loans and 60 is interest (!) I have owed for 15 years. I must choose between student loan payment or health insurance - health wins. It seems obvious that one step is to forgive the interest - which is immoral to charge anyway for something as mandatory as education!

Jun. 09 2011 12:11 PM
jgarbuz from Queens

The Left destroyed the Comprehensive High School system in the mid-1960s where kids were offered three or four different diploma options: Academic, Vocational, Commercial, and General. The Academic Diploma was preparatory for kids going on to college. The Vocational Diploma was for those who were going to work with their hands. The Commercial diploma for those planning to work in offices. The General was for those who just basically showed up and managed to barely pass. In the mid '60s, many kids graduating with Vocational and Commercial diplomas were armed with the basic skills to start work. This is no longer the case. THe idea that EVERYONE HAS to go to college, has gone beyond obsession, to the level of mania, and is a significant factor in our economic decline - not to mention the ridiculous debt loads kids took upon themselves. It is a scam promoted by petty liberal academics.

Jun. 09 2011 12:10 PM

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