Streams

OWS and Student Loans

Thursday, December 01, 2011

OWS wants people to default on their student loan debts. Anya Kamenetz, senior writer for Fast Company Magazine and author of DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education and Generation Debt, discusses the idea and other news around higher education financing. Later in the segment, Robert Applebaum, founder of ForgiveStudentLoanDebt.com, talks about his efforts to forgive student loans - and why he thinks mass default is a bad idea.

Guests:

Robert Applebaum and Anya Kamenetz

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Comments [148]

Sara

To all the people who say we're irresponsible and selfish for having trouble paying back our loans. Congratulations you have a good job. I make $800 a month. I'm not about to go out and sell myself on the streets to pay off a student loan.

I haven't defaulted (yet.) but please understand this when you leave comments like that:

Your reality is not mine, nor is it anyone else's.

Dec. 08 2011 02:25 PM
Jennifer

Private lenders in the student loan market WANT students to default. Why shouldn't they? The loans are guaranteed by the government. Private lenders get back both the principal and the outrageous penalties and fees almost immediately, while the government is left with the responsibility of pursuing the defaulters.

Our system of higher education has been turned upside down. As a society we should be investing in students who are capable of pursuing higher education and ensuring that tuition is reasonable for those students. We also need to create opportunities for students to pursue non-professional jobs through vocational education and apprenticeships and value the jobs those young people would do by paying reasonable wages and ensuring safe working conditions.

Universities need to get in front of this madness. Rather than pimping their students to private lenders, they need to help incoming students make reasonable decisions based on their needs and their circumstances. Finally, universities need to stop building designer coffee shops and paying their top administrators outsized salaries and rein in the cost of higher education.

Dec. 04 2011 03:10 PM
The TruthFerret from Dark Side Of The Moon

Having spent more than two decades as a Financial Aid Administrator I advise potential defaulters to please consider that defaulting can have serious consequences for manymanymany years including having your wages garnished, having your income tax refund kept by the government, and having a nasty blemish on your credit report forever so you cannot even buy a stick of gum for decades.

Defaulting students have historically made Uncle Sam very unforgiving and very vicious.

Please be careful and think through the consequences before making an irrational action.

Dec. 03 2011 06:34 PM
Responsible Person from NY

I can't believe how many false arguments there are on here. First of all banks were under the TARP program which stands for the Temporary Asset Relief Program. Their debts have to be repaid and some with quite a bit of interest. There is no program that was setup for banks where their debts are simply paid off and they never have to consider paying it back. Between a house, an education and a credit card none of these are "rights" anyone my default is owed. You make decisions on whether you can reasonably afford to have these things or not. If you make bad choices you deal with the consequences. Student loans, credit card terms, home loans may all need to be modified but as far as complete forgiveness, it's people asking to be as equally corrupt as the people the corporate criminals they protest against.

Dec. 03 2011 02:26 PM
BigAppleBucky

One positive thing OWS folks could do is go into high schools and beg students not to go to college if they have to borrow money to do so.

Sort of like reformed addicts begging students not to do drugs.

Dec. 02 2011 06:29 AM
JD Painterguy from Log Island, NY

Hey Leni from Maryland:

My SL debt was 79K in 1997, and it is now.some 14 or 15 years later, 311K and growing by 20K a year for the next 23 years.

Absolutely true story.

I feel for you, and I think about killing myself every day from the shame of my debt, and feel totally isolated and off the grid with no way out.

And this society and media has no reply, in a silent way that amounts to preposterous and almost criminal negligence in the human rights and legal sense (with all due respect to Mr. Lehrer)

Lehrer probably by now is wondering about the whole thing.

But so many people have told me to emigrate on my blog, after one year of blogging.

And that is the best critique I can get after almost 100K views:

Flee the USA to escape Student Loan Debt.

A fine thing. Telling someone to run away.

But don't forget that probably thousands of lawyers have viewed my blog, and so I will have to take their silence, by now as support of the advice to flee the USA as the best option for my tripled Student Loan debt (over 14 years)

A debt that will be quadrupled by next spring (after 15 years)

So here is a big Bronx Cheer for the US legal profession, and thanks for reading my blog.

How very bitter it all is.

Hopeless and helpless.

Hang in there, one indebted day at a time.

Student loans can get really wild and out of control for some.

Dec. 01 2011 10:00 PM
Leni from Maryland

My loans total $60k, and after 28 years are now $167,000. I had cancer and couldn't pay.

Dec. 01 2011 09:28 PM
BigAppleBucky from Long Island

Paul Campos, a law professor, has started a blog about the scamming nature of law schools that promise big incomes to graduates but whose victims seldom earn enough to repay their enormous student loan debts.

http://insidethelawschoolscam.blogspot.com/

The problem is not only with Sallie Mae and the banks, it is also with universities which charge enormous sums for essentially worthless educations.

The inflation of university costs is a scandal only beginning to become known. Over the last 50 years only medical expenses and college educations have increased in cost greater than the overall inflation rate every single year.

As a society we need to rethink how we educate our youth.

I'm all for teaching critical thinking and liberal arts education, but not for the enormous sums being demanded.

Dec. 01 2011 07:29 PM
JD Painterguy from Long Island

Jut to add....

Thank you Mr. Lehrer for your interest in the Student Loan Debt situation

There are two features or facets of the problem that I would like to mention.

One is the fact that Student Loans can destroy a credit score, so that the debtor cannot get a job (after a credit check) to pay back the student loans. (A vicious cycle)

The second point is that there is a terrible human cost to all this, as thoughts of suicide over hopeless debt are only a natural and very, very human part of the whole situation.

I wish I could point to a simple villan and/or one "Bad Guy" such as Albert Lord of Sallie Mae, upon which to place al the blame.

But I cannot, since I get a sense that this is a systemic mess and a problem deply woven into the fabric of the US economy, that may not be solved for many years.

One can only hope that Higher Education will somehow be reformed during that time, and that knowledge will not be a commodity in a better world someday, in a future that seems so far, far away.

Dec. 01 2011 07:14 PM
JD Painterguy from Long Island, NY

Hey Cryn:

It's been a long haul hasn't it?

As I have always said: You and Nando of Third Tier Reality my Heroes.

Let's hope for a better future.

Great Job!

Dec. 01 2011 06:33 PM

I got an idea!!!

Let's round-up all those damn, whining students and throw them in prison!!!

Think of all the "jobs" that will be created in the Prison/Industrial economy!!!

Better students that won't tow the Kapitalist™ line rather poor, misunderstood and highly productive bankers...

Dec. 01 2011 02:10 PM
Edward from Washington Heights AKA pretentious Hudson Heights

Why aren't the "Occupy Wallstreeters" demonstrating outside of Columbia University over outrageously high tuition which force students to go into debt for large amounts?

Dec. 01 2011 01:25 PM
James from Manhattan

If OWS pushes for a mass default on student loans then the "movement" will be revealed for what it truly is, a handful of over-privileged and under-motivated kids who irresponsibly chose to take out loans they could not afford to pay back because they made a poor investment decision in themselves. Once each of these kids gets out of their debt, the movement will claim victory and dissolve because it was all about me me me and not we we we in the first place. Sure, If you're standing outside in Zucotti Park right now because you are unemployed and angry, than you may not feel over-privileged. But not having a job doesn't mean you weren't given the opportunity to get one. College is a luxury good, not a right. If you got there, than yes, you are more privileged than 2/3 of the people either living now or have ever lived on this planet. But if you chose to study the effect of Proust on neo-classical post-modern art instead of such things like general management and operations, or computer science and IT infrastructure, and then didn't even work hard to get good grades at that (I hire kids right out of college and if they got a 4.0, then I don't care what they studied), than why is your debt anyone else's problem but your own. You basically did exactly what you claim investment banks did and should be left to rot for. Maybe if there was more a culture of individual responsibility in this country, our banks and corporations would be filled with people that make better decisions and care more about their fellow citizens. I think big bad Haliburton of the infamous big-oil-military-industrial-complex which puts the cash in the pockets of the wicked "1%" should pull up a bus up to Zucotti Park and hang a sign that reads "Desperately Hiring, $100k Jobs in North Dakota. Student Loans Paid Today." Wouldn't you just love to see what would happen next?

Dec. 01 2011 12:42 PM
emmanuel

Why isn't anyone talking about the effects the loan industry has taken on higher education itself?
There is no BS here, IMO even some of the most prestigious private schools are, at the bottom, corporations built on loaning business.
Even if all higher education was paid for and debts forgiven over night, this problem would still be so deeply entrenched into the ways schools do business or educate it's students that it just seems this underlying cultural capitalist-antagonism of debt is not only keeping schools running, but also keeping the appearance of education - the rankings, the prices, etc. WAKE UP PEOPLE YOU CAN STILL GET A CRAPPY EDUCATION AT HARVARD.

Dec. 01 2011 12:30 PM
Dana

Responding to a few points:

- Several aspects of the student loan process/administration needs to be changed. However, to assume that loans (not additional fees, etc.) should be forgiven is just shirking responsibility. It took me about 15 years to pay off my undergrad degree loans, and I scrimped and saved and worked every side job I could find (i.e. cleaning floors in a little cafe late at night) to get there. Despite the economy, these lousy low paying, limited hour jobs are still around

- I currently work for a private university (not ivy), and for all of you who are criticizing the rise in tuition for lack of cost control and excessive salaries, I can tell you that all of my counterparts (in the same type of position/yrs, etc.) at public colleges/universities make 15% - 20% more than me. There may be 2 - 3 guys at the top who make the "big bucks", but that's it. You should be looking at the salaries of all the administration/staff/faculty of public instutions if you want to be blown away.

In addition, I have not had any raises over several of the past few years; and my budget had been cut each year for the past four years. I am not complaining - I am just pointing out that there is no excess. Utilities, facility maintenance, and all the creature comforts and customer services that students demand and expect are what fuel the rise in operating costs and hence tuition.

Dec. 01 2011 11:49 AM

It was good while it lasted!

For 30+ years the country has been in a period of massive wealth creation, often considered the greatest one in history. Unfortunately now we see there was a correspondingly huge massive debt creation. Wealth inequality has risen greatly during that time period as well. Interesting that a large portion of that "wealth" at the top is based on the debt of the middle class, and the growth in that wealth depends on the increased growth in middle class and sovereign debt, still being fueled by easy money. Of course, the alternative to fueling it is letting it collapse, which may eventually happen on it's own anyway.

Dec. 01 2011 11:43 AM
Daisy

I wish to pay back my student loans. I am unemployed and yet my lender will not defer my loan payments until I'm employed. That's ridiculous.

These kind of rigid terms should be able to be renegotiated.

I am trying to pay them back, but eating is my priority right now. As I need to be healthy to land a job!

Dec. 01 2011 11:38 AM

When banks made grave, irresponible decisions that led to the demise of the WORLD economy there have been ZERO demands for these people and institutions to assume their responsibility.

Why weren't they left to swing as students and their families do each and every day???

WHY?!?!

Dec. 01 2011 11:38 AM

To all who believe this is an issue of "personal responibility":

Where would you rather see your money go; into the pockets of immorally rich bankers or toward the education of our children and ultimately the security of our collective futures???

There are VERY serious problems, here.

Dec. 01 2011 11:33 AM
lulu from nyc area

Looking to contact Johanna and Kellly who spoke on the show today for possible inclusion in an occupy wall street documentary. Please contact shugahfilms@gmail.com if interested in being interviewed. thank you.

Dec. 01 2011 11:27 AM

BO=Wall Street's beyotch.

Dec. 01 2011 11:27 AM

Hey, Lee Carroll Bollinger!!!

Do you have health insurance???

I DON'T!

Dec. 01 2011 11:23 AM

Tuition is so high because someone profits.

Universities' administrative elite, perhaps?

Let's have a look:

Lee Carroll Bollinger, president of Columbia University was paid $1,411,894 in 2008.

In July, 2010 Bollinger was appointed Chair of the Federal Reserve Bank of New York board of directors for 2011. Previously, he had served as Deputy Chair...

Hmmm... universities... banks... high tuition... huge student loans...Mr. Bollinger...???

Curious, isn't it???

Dec. 01 2011 11:21 AM
linda from ny

Comment from "MeatWNYC" : The reason regular people cant declare bankruptcy is that commercial lenders have prevailed in getting legislatoion passed to make it much more difficult to do. Look into it - bankruptcy laws have been amended in recent years making it harder for the average person to use and easier for corporations to use. The noose around the neck of the citizenry has been tightened and tightened.

Dec. 01 2011 11:17 AM
Mark Alan Blumberg from Manhattan

It was mentioned during the show that 70 million people currently have student loans (SL) to pay back. After a quick internet search I found that the average monthly SL payment is $250. Some quick math results in $17.5 billion per month in SL payments which leads to $210 billion per year.

This is $210 billion per year which is then available to be pumped back into the economy in multiple forms...perhaps as direct consumption of goods and services, perhaps in investment, perhaps in a mortgage, etc...

Personally, if I were able to save my SL payments I would have enough for a down payment on a house in a reasonably priced suburban neighborhood in about 2-3 years, and I imagine it could easily be 5-6 years for the average SL holder.

When we look at this issue from the perspective of the national economic crisis as a collective people, this mass of 70 million people with potential spending power could very well be a nice jump-start to improving our current national crisis, from which 99% of the people of this beautiful are nation are not entirely safe.

I enjoy the fact that I can pay back my loans...I live within a budget that allows me to do so, and I plan on doing so until I pay them off. However, I understand that we are all in this crisis together...no one person will come out of this above water without the help every one else.

There comes a point where past mistakes made by the individual must be forgiven for the betterment of the many...this is one of those times. Capitalism does not work in pure form, especially in a democracy. Socialism does not work in pure form. Through the economic cycles they buoy each other. This is a time when capitalism needs an injection of socialism (which essentially happened after during the Great Depression with the FHA of 1934 and the GI Bill and the WPA) in order to support the masses and get our country back on its feet.

I support student loan forgiveness for this reason...not so sure about the 1 million default thing, yet.

Dec. 01 2011 11:16 AM
Cray from Jersey

Anybody have the name of the blogger who spoke up on behalf of the OWS campaign (or at least was somewhat supportive of it? I want to read her stuff, thanks.

Cray

Dec. 01 2011 11:08 AM

HEY, BO!!!

THIS KOUNTRY® IS F*d UP!!!

You are OWNED!!

Dec. 01 2011 11:07 AM
Matt

It's just a personal theory of mine, but I think the massive increases in college costs are directly related to the massive flow of income and wealth to the top 0.1%-1% of the population, who as a result of this increasing inequality can bid the price of college education (more and better labs, rock star professors, sports facilities, dining and residence halls, etc.) to the sky.

Dec. 01 2011 11:07 AM
Matt

Another aspect of "fairness" and personal responsibility: at the very least, student borrowers should be able to renegotiate interest rates down from as much as 8.5% (see Rolling Stone piece about NYU student) while banks had access to emergency lending facilities to borrow from WE the people for 0.01% to make some of those loans. Bloomberg News has reported that the Fed made available over $700 TRILLION in credit to financial institutions during the financial crisis. Why can't students be cut a break, at least on interest?

BTW, I paid back every penny of my 1970s student loans (about $23,000 as of 1981). But those amounts would be 483% higher if I had graduated this year.

Dec. 01 2011 11:02 AM

Columbia University has a 7.8 BILLION dollar endowment.

NYU has 2.3 BILLION.

What do these school do with all the money???

... besides buying up HUGE tracks of prime NYC real estate...

WHY IS TUITION SO EXPENSIVE???

Dec. 01 2011 10:56 AM
Edward from NJ

The notion that you need to have a college degree for the "knowledge economy" may be true, but not because higher education is necessary to do the job. A college degree provides a simple filter when sifting through applications. The office jobs that "require" a college degree and are filled by liberal arts majors generally don't employ any of the skills learned in college -- unless you count using Microsoft Word as a college skill.

Dec. 01 2011 10:56 AM
linda from ny

in the early sixties the Fed govt was the only lender of any note for student loans. The terms of my loan were that the loan began to be repayable after10 years and then was paid back monthly with 3% interest. The principle was that students would have that time after school to become part of a productive culture and be able to repay. I repaid very quickly after 10 years and remitted all the interest I saved (by paying early) as a thanks to the govt. Discussions of moral high ground and banks 'forgiving 'student loans are amusing especially since they have shown that banks have no moral standing and that they have become a shadow government by means which are anything but moral. They are basically robbing our citizenry of erudition, innovation and prosperity. The federal government owes its citizenry education and healthcare and its citizenry then will owe the federal government fealty.
OW is doing the correct thing - because the money lenders have skewed Americans towards a life of debt in every conceivable segment of society, they are killing us. We have forgiven them enough.

Dec. 01 2011 10:55 AM

"Cost benefit analysis" when considering your education?????

Sounds more and more like we should all have an MBA™ and work in the corrupt banking industry!

Dec. 01 2011 10:50 AM
Rick from USA, Incorporated

The "union language" that the final commentator (the one who argued eloquently against seeking "forgiveness") was grasping for is "the United States has become the company store for _______________ <= insert industry name here) industry lobbyist/bagmen."

Dec. 01 2011 10:50 AM

Personally, I don't agree on grounds of both fairness and unintended consequences on "mass default". First, fairness: Why student loans? Like many others, I left college with a lot of them, and just finished paying mine off 2 years ago. Why not forgive my mortgage instead...? (Not serious, just saying it's not fair to pick winners here).
Unintended consequence: college will move further out of reach for more people, as money will dry up for new students seeking loans.

To play the devil's advocate though: bankruptcy is often used by businesses as part of corporate strategy. Case in point, this week's American Airlines. If it is an acceptable strategy for public companies to use, why not individuals?

Dec. 01 2011 10:50 AM
John A. from the observation deck

Google "Queer Studies" semester
Five Different colleges hit on page 1 alone.

Dec. 01 2011 10:48 AM
XGempler from New York City

This is the stupidest idea to come out of the "Occupy" movement and marks its demise. It is exactly the sort of selfish and greedy entitlement behaviour that is rampant in our society and that was one of the originally founding principals of the "Occupy" movement. What is really sad about it is how young people that are caught up in the idea of expressing their "power" are in fact only going to ruin their credit rating for years to come. The banks could not care less if these people defaulted as the loans are guaranteed by the US Government, which means the people that are defaulting are just screwing the American people, which is exactly what they have been complaining about. The irony is priceless, and the failed logic and the popularity it has achieved marks the beginning of the end of "Occupy." Sad, really.

Dec. 01 2011 10:47 AM
MP from Brooklyn

To Nick from UWS, who says, "Most people have no idea how to judge the wisdom of a financial action. . . . Start teaching finance from K on up," I say "YES YES YES!"

Dec. 01 2011 10:47 AM

Count me as another with six figure loans and no end in sight, ever-- my original loans were less than a third of this balance now.

Hardship deferments did it, since Sallie Mae and Nelnet expected payments of 50% OF MY INCOME right out of grad school! In a field where you can't live on mac and cheese and multiple roommates, because you have to host faculty parties at your house, can't live with students, etc.

The biggest question was how Sallie Mae (at the time) with a straight face expected me to live on $20K a year while harvesting the other $20K of my first faculty job, basically dooming me in the job. Add in the dot.com crash, low-paying journalism jobs, and my student loans are nothing but a life sentence.

And consider the 15% income sensitive repayment (I'll never be eligible for 10% because my loans were in the 1990s)-- IF I EVER get my income up enough to be able to comfortably make my payments, it will kick me out of the 15% eligibility-- and wouldn't you know, Nelnet has been re-capitalizing interest during the whole time I've been in the 15% program, so if I ever make enough to leave it, my payments will go up so much as to push me back into it!

Dec. 01 2011 10:45 AM
Bill from New York

I took out a $1,500 student loan in 1975. Today, I am 68 years old with my primary income primarily coming from social security. I still owe more than $3,000 on that loan, despite a lien on my income, having had hundreds of dollars per year garnished from my wages.

I have no expectation of ever satisfying this debt in my lifetime, despite having paid back much, much more than the original debt.

Dec. 01 2011 10:44 AM
Kari from New York

Beware if you voluntarily default on your student loans. If you default on student loans (voluntarily or not) you are no longer eligible for some of the federal student loan repayment programs, such as the IBR, Income Based Repayment. To be eligible for IBR, you can not be in default. To get out of default you have to pay your loans off in full -- plus any additional fees and penalties, which could be hundreds of dollars or more. In addition, the default loans show up on your credit report.

Dec. 01 2011 10:44 AM
simpsonsmovieblew

You knew how much you were borrowing BEFORE you borrowed it... you took the risk... not sure what the confusion is here. I don't smoke because I read the warnings on the side of the pack.

-I support the government kicking banks out of their lending scheme.
-I support whittling down education so that it is far less expensive.
-I support the government paying for qualified students.
-I support high school students and their parents to learn about the costs and risks of college.
-I don't support dine & dashing on your school!

Dec. 01 2011 10:43 AM
Asaf Soof from Union Sq

This is ridiculous. I wanted to go to NYU but ended up in Baruch CUNY, because I did not want to take a ridiculous student loan. I also drive a Ford Fusion and not a Lexus RD450 because I cannot afford it. In many ways the rhetoric is one of hate, replace the word "banks" with "Jews" and you are on the road to pogroms. In the past the masses blamed the Jews for their trouble, now we blame the Banks for our misfortune.

Dec. 01 2011 10:43 AM
Davidnyc from nyc

Moral?

Where is the Moral fiber when the brain trust gathered and deemed Let the US be the ONLY country that charges a VIG on our student's future and education.

Disgusting.

Dec. 01 2011 10:42 AM
John A.

Goldman Sachs from Hell said:
"Thank god no one has mentioned the bailout of my brethren when our irresponsibility caught up to us."
The hammer is already pulled back on that gun. If Gvt can't pull the trigger by Nov-2012 then poor president will be replaced yet again. (And Yes, the sarcasm Was detected.)

Dec. 01 2011 10:41 AM
cs

I am appalled that these people think that loans they asked for, and signed their names to, should now be forgiven. No one told you to go to such expensive schools. Many responsible people have gone to state schools, taken semesters off, gotten work study, scholarships and have graduated and paid their loans back. I am so sick of Occupy Wall street, which actually seems like "give me, give me give me, I'm entitled."

Dec. 01 2011 10:41 AM
Janine Thompson from NY

As we are presently transitioning from "no child left behind" to " race to the top" by introducing "common core standards" from K-12 with the sole objective to become more COMPTETIVE with the rest of the world - how can we possibly expect to bring this objective to its logical conclusion, if students can simply not afford to study. In Germany, where I studied, I took out a "non-interest" student loan and was able to pay it back almost "easily". During a time where I could not work or was not married, I was not required to pay anything. Once there was a source of income, a certain % was applied and subsequently all was paid back.

Dec. 01 2011 10:40 AM
Matt from Jackson Heights

All the discussion of "personal responsibility" of young people is completely misplaced in a society in which the losses from massive risk-taking by financial institutions have effectively been socialized while the winnings remain private (and those institutions can go bankrupt like Lehman and their managers keep all their bonuses and severances).

Dec. 01 2011 10:39 AM
Bonnie Egan from Manhattan

It's the penalties on the loans that should be removed. More loans could be repaid but payments take away miniscule parts of the original loan and the penalties become more and more onerous.

Dec. 01 2011 10:39 AM
Edward from NJ

Here's an idea: Pay off the student loan with credit cards. Then file for bankruptcy. ;-)

Dec. 01 2011 10:39 AM
Alan Ravage from NYC

I hope there is enough time for me to respond to a comment on today's show.

I was a college advisor for fifteen years in a NYC public high school, and know that student loans have been the lifeline out of poverty for hundreds of my students. But the social contract has been broken. These students agreed to conform to social expectations, to seek and find jobs and to be willing to assume debt in the name of entry into that system of advancement that college promises. Now that there are so many fewer jobs, and that the rules have changed, they cannot be asked to have foreseen this. They are victims very similar to the Occupy Wall Street movement. But what needs to be done is not entirely in the corner of the banks--the government and society have to reexamine their values.

Dec. 01 2011 10:38 AM
J. from Brooklyn

What about the skyrocketing costs of State Colleges who are driving the need for students to borrow crippling sums.

In 1980 I paid $200 per semester for a Undergrad in the South - most of my friends paid the same.
in 1987 I paid $600 for grad school.

Dec. 01 2011 10:38 AM
JT from Brooklyn (Bed- Stuy)

Student Debt is a moral issue in a country who's biggest promise to its citizens is social mobility through access to choice, chance, and opportunity. Burdening millions of individuals who seek to increase their prospects at a better life with a non-negotiable debt falls between institutionalized poverty and indentured servitude. We are literally bankrupting a huge segment of our society.

We should not want a country that defines meaningful work as employment that allows you to pay off your student loan as opposed to work that edifies the individual, her community, or our greater society. What type of country would we have if folks literally could not afford to be teachers, fire fighters, police officers, social workers, social service workers or civil servants. These jobs all require (some) college if not a four year degree, yet do not offer the kind of salaries that allow for an individual to simultaneously invest in a home or a family and quickly repay a student loan to avoid crippling interest.

I do not know if I am comfortable with the moral implications of a mass default, but I applaud the Occupy Student Loan Movement with forcing us a nation to examine how broken our higher education system is.

Dec. 01 2011 10:38 AM
jgarbuz from Queens

In summation, if you overturn the tables of the moneylenders, you only get crucified :)

Dec. 01 2011 10:38 AM
meesh from queens

there is an opportunity for paying off 15% of one's annual salary towards a federal student loan for 25 years and the rest would be forgiven. So if your gross is 25,000 per year, you would pay $3,750 max per year for 25 years... no matter how much you owe on the loan, the rest is forgive. obama wants to cut it down to 10%.

does not apply to private loans.

Dec. 01 2011 10:38 AM
Sheldon from Brooklyn

Matt. exactly - I can open a chain of strip clubs in and file for bankrutcy, I can have 100k in credit card debt and do the same yet students that (in many cases) had financial decisions made for them, are stuck with debt for the next two decades of their life.

How many people in their 20'2/30's are spending most of their disposable income just to service debt?

Dec. 01 2011 10:37 AM
Jim

@Goldman Sachs from Hell

This is why the focus of OWS should be on obtaining justice by forcing government to pursue Wall Street accountability. 1 million and 1 "wrongs" do not make a "right".

Dec. 01 2011 10:37 AM
Q from Sunnyside, Queens

I have about $90,000 student loans from my graduate school. The Perkins Loan is shrinking because of its fixed interest rate, but the others are getting bigger after 4 years of making payments. While structurally there are not many opportunities set up for working artists with an advanced degree, a lot of us suffer tremendously from struggling to make payments (Some of us do make payments, but the loans only get bigger.) The structure among the borrowers, the loan companies and the government must change drastically to avoid a further fallout.

Dec. 01 2011 10:37 AM
Ruth in Brooklyn

I don't agree with the Occupy theory. You don't lose your education if you default on your loan but you will lose your house if you default on your mortgage. I do agree that there needs to be a better system for repayment and maybe a limit on how many years interest is charged or a limit to the amount of interest.

I had loans and I repaid them all.

Dec. 01 2011 10:37 AM
Kate from Brooklyn

Couldn't the social scientist and former assistant DA on the phone have qualified for public service loan forgiveness? http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp

If it weren't for this program, I wouldn't have gone to grad school at an expensive private university for public administration.

Dec. 01 2011 10:37 AM
Nick from UWS

As well as parents teaching their children not to take candy from strangers, they should be taught not to borrow money from loan sharks.

Part of this problem is the pitiful level of financial literacy of our population. Most people have no idea how to judge the wisdom of a financial action.

Most parents have no idea how to balance a checkbook, much less judge a complex financial transaction. And even less so their children. Want to start fixing this? Start teaching finance from K on up.

Dec. 01 2011 10:37 AM
Bill from NJ

I'd like to see a story on the blighted lives of those already living under years of student loan default. This is a little-noticed common thread in the under-class of American life.

Dec. 01 2011 10:37 AM
jgarbuz from Queens

The truth is, you can't really "punish" banks. If you tar and feather the moneylenders, all that happens is that you stop them from lending. Then you will have to pay cash on the barrel head for everything, as was once the case for most people. That's why a little over a century ago, only 10% of the people owned their own homes. Most just rented hovels in tenements. That is, those who weren't living in shacks down on the farm.
The expansion of consumer credit was mostly good, until went too far.

Dec. 01 2011 10:36 AM
David from Greenpoint

The agony of irresponsibility endures long after the sweetness of immaturity is forgotten!

Dec. 01 2011 10:36 AM
Endebted NP from NYC

I'm just about to graduate with a masters degree as a Nurse Practitioner. I have nearly $200,000 in loans, the vast majority of which are private loans with a rate of 7.9%. I haven't yet done the math on how much interest I have accrued in the past 3 years during which I've been in school. My monthly payment will be probably 30-40% of my after tax income.

I believe I got a degree which is useful and I will hopefully find a job. We need more health care providers. In order to get a graduate degree, I had no choice but to borrow that much money, and I had no choice of lenders. There are some government programs aimed at helping health care providers get some loan forgiveness if they work for the underserved, but jobs that qualify aren't that easy to find. I will fight like hell to get one of those jobs and hopefully I will, but I have many classmates in the same position and we won't all get a HRSA job. We will all do important work providing health care at a significant savings to the system.
So why is our interest rate 8%? Why are banks making money off of us?

Dec. 01 2011 10:36 AM
MC Hammer from nyc

You have to be crazy to voluntarily default on a school loan. You are better off defaulting on your credit card loans

Dec. 01 2011 10:36 AM

The woman on the phone now owes over $170,000 in student loan debt. Are you kidding me? What kind of deluded thinking led her to borrow that kind of money to become a psychologist in the first place? A higher education is not a god-given right, it is an economic choice that not everyone can make. Reality is tough sometimes, but it is still reality. If you don't think you can pay back the money you shouldn't borrow it and expect that someone, somewhere will fix it for you down the road -- wishful thinking that penalizes others for your foolish decision. The OWS people are perfectly happy putting the burden they assumed onto others when they no longer wish to carry it themselves. If my child in college felt this way I would be ashamed.

Dec. 01 2011 10:36 AM
Marc from Brooklyn

What self-indulgent crap. This last caller said it all: she chose to pursue a post-grad degree -- from a high-end university -- in a filed that she knew does not pay especially well. She made her choice. Now they want banks to "forgive" loans -- or students to default. Banks don't forgive loans: they just pass the expense to their depositors and next pack of borrowers. Once again, borrowers make appallingly bad choices, and everyone else is supposed to pay.

Why don't these spoiled brats hit up their Uncle Sam for college? It only costs four years of service -- in advance.

Or doesn't the politically correct crowd believe in paying in advance?

Dec. 01 2011 10:34 AM
rose-ellen from jackson hts.

It is irresponsible and unethical to saddle young people with debt just for getting an education. We should reset the economy-in housing by forgiving all mortgages [if you're in it you own it and if you rent your rent is cut in half] and in education by forgiving all debts and cutting professional salaries .The same in the medical field-cut all professional salaries and stop this bubble of exorbinent money going into higher education and health care. It is artifical[a bubble] and unfairly impacts what is necessary for a decent life in a 21stc country. A home ,medical care and an education [for those who qualify i.e. those who would benefit from higher education] should not be at the whim of market forces. Hence professors and college administrators should not require salaries that necessitate students starting out in debt just for being educated.That this is not self evident to people shows how wedded the culture is to greedy hypercapitalism. A flaw in the culture that hopefully the OWS movement will expose and correct. This is a legacy of puritanical - pull- yourself -up- by- your own- bootstraps -if you're -rich- you must -be -good -calvinist quinessentially american ethos, which may have served us well in the past but in a post industrial highly technologically advanced society of 350million people needs to be jettisoned for a more european style ethos-that recognizes that housing,a living wage or job ,education for qualified citizens and medical care for all -are rights belonging to all citizens of a 21stc technologically advanced nation.

Dec. 01 2011 10:34 AM
James from Manhattan

If a student took out a loan to go to college and study a pretty much useless major that gives you no job security in a high unemployment market, why should taxpayers pay for the ultimate bailout that will come from a mass default. If these students are willing to get any job they can to pay their debt, it sets a terrible precedent and adds to the growing general lack of individual responsibility. I am for a selective defor reduction and forgiveness program for people in areas of studied vocations that can actually serve our community when the market recovers. Otherwise, these potential defaulters should join the military or hop on a bus to North Dakota to get a job in the oil boom even though it might be against their environmental sensitivities. I also believe that if the GI BIll does not pay off student loans, it should be immediately amended to do so.

Dec. 01 2011 10:34 AM
Jim

So now we all motivated to grab everything that we can (loans, credit cards, etc) yet also make sure that we make zero income to ensure that payments are affordable? So then who pays? Oh right, just print more money and destroy the value of everything. This country has seriously lost its way.

Dec. 01 2011 10:33 AM
z. m. from brooklyn

i borrowed money for a degree in design for emerging technology at a top private grad school. i knew what i was getting into, so i wasn't surprised by my payments. currently i am a full-time adjunct college professor, teaching at a community college. the problem is that my income doesn't quite cover my living expenses and loan payments. while i want to contribute to my community and teach tech students at a public institution, in 2012 i will be leaving this job and to work in a corporate environment, just to make ends meet. the loans levels limit graduates ability to do work in non-profits and for social change.

Dec. 01 2011 10:33 AM
Chris Prentice from Brooklyn, NY

I paid for a BA in Dance from Washington University ('93) and an MFA in Creative Writing from Sarah Lawrence College ('04) -- both incredibly expensive schools, both remarkably economically "useless" degrees. The choices I made about where I received my education and how much I was willing to pay and sacrifice for each degree was FULLY researched and thought out before signing on the dotted line. Although my parents helped me with my undergraduate degree (and I received very generous tuition assistance from WU's scholarship fund), I have been responsible for more than half of my undergrad debt and 100% of my graduate school debt. I am 40 years old, only recently married for the first time and am currently carrying $58k in student loan debt. I've never enjoyed post-grad financial support from my parents and I've lived in NYC for 18 years. I've never defaulted on my monthly loan payment, even after I was laid off from my full-time job in 2009.

I agree with your first caller. If the so-called "educated" class can't think critically, analytically about the financial and professional choices they're making, then there are deeper problems in our country. Institutions of higher learning need to make sure that their graduates can take what they learn in their degree programs and APPLY their skills and learned concepts to many aspects of their lives. This is the key to economic survival. It's part creativity, part intelligence. And it's what will help our economy and culture grow.

A mass default will only make the citizenry of our country look more spoiled, irresponsible and ineffective. Instead, Occupiers should be focused on lobbying for new tax breaks, perhaps less strict forbearance and forgiveness rules (in the face of health problems, unemployment, etc.) and legislation regarding mandatory, transparent, comprehensible "fine print" and counseling for people seeking student loans.

In addition, Occupiers should consider the concept of "free education". I've long been a proponent of the concept of apprenticeships, which could actually be paid. Why don't the Occupiers make a list of all the companies, organizations and individuals they'd like to work with, then start a dialogue with these entities about how they could simultaneously "employ" and educate large swaths of our young citizenry, as an alternative to expensive higher education. Solutions, people.

Thanks.

Dec. 01 2011 10:32 AM
z. m. from brooklyn

i borrowed money for a degree in design for emerging technology at a top private grad school. i knew what i was getting into, so i wasn't surprised by my payments. currently i am a full-time adjunct college professor, teaching at a community college. the problem is that my income doesn't quite cover my living expenses and loan payments. while i want to contribute to my community and teach tech students at a public institution, in 2012 i will be leaving this job and to work in a corporate environment, just to make ends meet. the loans levels limit graduates ability to do work in non-profits and for social change.

Dec. 01 2011 10:32 AM
Leila from Montclair

Just to be clear, the Income Contingent repayment plan through the Department of Education is not an Obama program -- it has been in existence for at least 15 years.

Dec. 01 2011 10:32 AM
MP from Brooklyn

Many years ago, my boss (who is from the UK) was telling me about how she and her husband were helping her son apply to colleges and how they were going to pay for it. Thinking I was being helpful, I brought up our American system of "student loans." She told me to shut up. As I now look ahead to planning my own son's college career in a few years, I now see the wisdom in her response.

Dec. 01 2011 10:31 AM
C-J from NY

Could Brian ask someone to comment on the effect, if any, the changes to personal bankruptcy law (a few years ago) has had on the student debt problem.

Dec. 01 2011 10:31 AM
Matt from Jackson Heights

Brian, how is it that businesses that make bad decisions can obtain protection from their creditors but 18 to 25 year olds who are asked to make financial decisions potentially costing half a million dollars (undergraduate and graduate) to gain what everyone agrees an the admission ticket to a better life have NO chance to obtain a discharge of their debts. We should RE-reform the bankruptcy laws; and it seems to me that the threat a mass default is a means to help bring that about.

Dec. 01 2011 10:30 AM
Keith Hocter

Mass default would have a mass effect, just not the one intended. The effect would be that future generations of middle-class and poor students would find it more difficult to obtain financing for a college education.

Dec. 01 2011 10:29 AM
Jack Jackson from Central New Jersey

Another example of how much middle class earning power has fallen....

My college education started in 1975 and tuition at my state college was $585 per semester payable in two installments. Minimum wage was $2.20/hr. So 14 weeks of full-time minimum wage labor covered my tuition - that's about one summer. Work study and other part-time work covered the rest. Gone are the days when you could work your way through college because we let the the growth in GDP go to the top tier and not get spread throughout the workforce. Middle class incomes should be ~$100K/yr in order to have kept track with buying power of the average income in 1968.

By raising the price of college education, we have only guaranteed that the number of choices a graduate can make are limited. How many financial services workers can one economy support? And how long before 'too big to fail' becomes SOP? We need a path to put income back into middle class earners pockets.

Dec. 01 2011 10:29 AM
Kelly M.

I am one of the OWSStudent Loan students. I have debt in and around 70k. I also work fulltime and I make around 65k per year two years after leaving school.

But I cannot expand and save as much as I want because of these loans. The government based loans are great - I am able to easily talk to them about any issue I have (which I did when I first graduated school), but not in the private loans I have, which is the majority of my debt.

Private loan lenders are the ones we object to. They are the ones who do not care. They are the ones who have given me the most trouble, the most headaches, and they have absolutely all the power.

I don't agree to a mass default, but I wholeheartedly would think a mass forgiveness would go a long way. Or make the interest rates so low that it's actually affordable. Education is for the best of the country, and yet we're being destroyed economically for wanting to be a better productive member of society.

Dec. 01 2011 10:28 AM
eric from Brooklyn

To one of Krugman's points that the loans are run to commercial banks unnecessarily: there are studies that have correlated the incredible cost of college education over the last 35-40 years to the introduction of the student loan system.

Dec. 01 2011 10:28 AM
Erika

I see many comments with people criticizing or condemning students for attending college and trying to make a better life for themselves. Sure, there are some people that go to school and get a "fluff" degree that will not help them to pay back exorbitant debts, BUT there are so many of us that went to school to get a professional degree in order to increase our earning potential in order to pay back the debts that we willingly took on. Problem is, we cannot find jobs to pay enough, so we forbear or defer and the debt accrues. So, perhaps a better compromise would be to help these people find gainful employment so that they can, not only pay back their debt, but also so they can reenergize the middle class.

Dec. 01 2011 10:28 AM
jane from ny, ny

What about these private companies like First Marblehead who are making a fortune on student loans? Could you comment on these>

Dec. 01 2011 10:27 AM
Goldman Sachs from Hell

Thank god no one has mentioned the bailout of my brethren when our irresponsibility caught up to us. It might give the people the idea that they too could receive debt forgiveness if only this deeply unjust society that we run were different.

Dec. 01 2011 10:26 AM
jgarbuz from Queens

Here is the HARSH truth. No more than 10% (if that many) should get a "higher" education! Most people, myself included, do not have a sufficient IQ to make the most of a truly superior university education. 90% of the population, myself included, should NEVER have gone to college, but perhaps only vocational schools for specific occupations. Most people simply do not have the IQ's to do anything worthwhile with a so-called "higher education." It's a misallocation of human resources. If someone needs specific education for some career goal, it can be gotten online or some other ways besides getting so deep into debt for a mostly useless education.

Dec. 01 2011 10:26 AM
The Truth from Becky

Lower the cost of education...don't teach kids to skirt their responsibilities.

Dec. 01 2011 10:25 AM
Roberta from New York City

Shout out about a public conference at The New School next week on the Future of Higher Education, Dec 8-9. Keynote includes university presidents of Cooper Union, New School, Chicago University, and the CUNY Chancellor. http://www.newschool.edu/cps/future-higher-ed/

Dec. 01 2011 10:25 AM

@Martin Chuzzlewit

What is "Queer Studies"?

Dec. 01 2011 10:25 AM
Joe Corrao

Krugman again?...sheesh

Dec. 01 2011 10:25 AM
John from Brooklyn

As the college educated class, can't we heighten our internal loci of control? We borrowed money; it's our responsibility to pay it back. Banks altering the terms of these loans is one thing -- but the idea of an intentional "mass default" is ridiculous. It only furthers the negative association with our generation...the sense of entitlement.

Dec. 01 2011 10:25 AM
Matthew

Does anybody know anything about a federal program to forgive student debt for 10 years of public service? I tried looking into this years ago, but the details were very convoluted.

Dec. 01 2011 10:25 AM
Simpsonsmobieblew

Either make education free or loan interest rates must be based on a bank assessor's estimation of the likelihood of repayment--factoring in all professional, personal and medical aspects of said applicant. Not sure what the confusion is, there is no other way to solve this problem.

Dec. 01 2011 10:24 AM
Fay from Downtown Brooklyn

What about the accountability of the schools? I personally owe 100K plus for graduate school for dual masters art degrees, The arts-industrial complex made money by letting in students when most will not end up as artists, and those who do will most likely not make a lot of money. The banks did not solicit these students, the schools did.

I personally don't agree with defaulting on student loans... there are no consequences for the defaulter, I believe, as there is for defaulting on a mortgage (you lose your home), defaulting on payments (you lose your credit worthiness), but the defaulter receives the benefit of a very expensive education. Who really loses if everyone defaults?

Dec. 01 2011 10:24 AM
barbara from Manhattan

The problem with asking 18-year-olds to assess the fiscal wisdom of their student loans as they head off to college is that the cultural message about college is more often "follow your bliss," not "calculate your future earnings." It probably would be wise to change the cultural message to the latter, but wouldn't it be a shame...

Dec. 01 2011 10:23 AM
The Truth from Becky

I personally know a woman who supports/supported her family on her student loans, married one child. She should NOT be allowed to write off her debt.

Young people want it fast, want it now and they don't want to WORK for any of it..I paid for mine working 1 full and 2 part time jobs that I hated!! I paid mine off you pay for yours.

Dec. 01 2011 10:23 AM
Bonnie Rosenstock from East Village

My niece insisted on going to an out of state school, which is also a state school, so she will have a $80,000 debt when she graduates. If she had gone to an in-state school upstate she would be virtually debt free. Doesn't make sense. But her choice, her responsibility. But the banks need to lower the interest rates.

Dec. 01 2011 10:23 AM
fuva from Harlemworld

True, since higher education is required in this economy, it should be much much more economically accessible.
Also, since financial literacy is critical in this economy, practical financial education should be mandated in K-12, and emphasized in higher ed.

Dec. 01 2011 10:23 AM
RL

Not every monitary exchange responds effectively to the laws of Supply & Demand. Student loans have too many other invisible hands at work, and that mucks up its place in capitalism, so it is one of those markets that does not work under normal S&D concepts.

Dec. 01 2011 10:23 AM
John A.

Absolute shining example why deregulation was a nightmare.
What could regulation do?
Disallow forms of advertising which hid government loan options when the private advertiser would be at a higher interest rate.
Remove or reduce government support for colleges taking on students with the poorer prospects of future success. Disallow too-high rates flat out. Provide forms of interest rate renegotiation for distressed payers.

Dec. 01 2011 10:22 AM
Hugh Sansom

James makes excellent points, but he is wrong on the recent benefits of the payoff of higher education.

For many years, it was unambiguously true that higher ed paid off in higher income. This pattern has begun to fail in the past 10 to 15 years, not least because of the obscene, uninterrupted increases in tuition costs.

If ever there was a case of a trickle down, out, up, this way, that way effect, it is in education. As James noted, everybody benefits with people being educated. But Republicans and many Democrats don't get it.

Dec. 01 2011 10:22 AM
Inquisigal from Brooklyn

I would need more info to understand exactly what the banks are doing that is changing the game, but defaulting on a loan a student voluntarily signed on to is irresponsible, and sets us all on a social course where everyone in our country thinks they deserve everything without working hard, and learning how to save and manage money.

The phony bill of goods in this equation is the notion that college is for everyone, and that everyone needs to go to college. THIS is why there's so much student loan debt, combined with the easy access to credit. Students need to STOP buying in to this line that they HAVE to go to college, or should go straight out of high school. It's simply NOT TRUE. Many, many professions exist and are peopled by workers who took classes, learned from the bottom up via starting as interns, went to very specialized trade schools or professional programs, or who did 2 years of college and dropped out. I have many friends who didn't get a BA who are now making close to or beyond $100K.

Dec. 01 2011 10:22 AM

@Martin Dimzzlewit

The Nazis are recruiting!

Dec. 01 2011 10:22 AM
Mark

Well if I had known we wouldn't have to actually pay back our loans I would have gone to school in Manhattan instead of the ghetto!

Dec. 01 2011 10:21 AM
Helen from Manhattan

I agree with what the speaker is saying, that college has now become a necessity to have a decent job, which wasn't always the case. Now a days you need a bachelors just to be a manager at a Target. I don't know if we should all default on student loan, but I do think it is unfair the profits that are made by banks on these student loans, that youth are almost required to take on just to go to school.

Dec. 01 2011 10:21 AM
JAne from New York

sorry, meant to say "Not everyone is as lucky as me"

Dec. 01 2011 10:21 AM
Gary McCready from Westfield NJ

Although it will not solve the problem, student loans should have disclosure and counseling like certain mortgage loans. Think of a Zillow-like relative value indicator that shows what happens (job salary vs field and placement record) to an college's graduates, and a counseling session like one has to go through for a reverse mortgage. Optimally, it should happen before a student is allowed to accept an offer of admission.

Dec. 01 2011 10:21 AM
Jane from New York

I took out loans to attend law school. Later the law school was found to have misrepresented their employment figures, and many of us found that our salaries made it difficult to pay our loans. I always made my payments, however if it weren't for my parents helping me pay it off, I would have been paying until retirement. Now everyone is as lucky as me, and I really feel for my classmates, who may never get ahead because of their crippling loans.

Dec. 01 2011 10:20 AM
Martin Chuzzlewit from Manhattan

Oh, so now a college education is a "human right'?
These people sound silly.

Dec. 01 2011 10:20 AM
Mary from Westchester County

Student loans:
Having worked in college financial aid offices, I also know that universities use financial aid, including LOANS, as a recruiting tool. I helped virtually every student in an adult program fill out a loan application.
Advice: parents - don't co-sign student loans! We co-signed our son's law school loans and he has had to drop out for health reasons and we are now saddled with $150,000 in loans for him (we all assumed he'd be a NYC lawyer by now!).

Dec. 01 2011 10:20 AM
Rita. from Westchester

I had the privilige of going to Fordham, (undergrad), NYU (grad), and then a school in CT for even more grad school. All with almost full tution on my back.

No one should be responsible for paying for those those debts except for me. (And I did. I lived in the City with roommates, I saved- I wasn't a "consumer", and I eventually rolled my graduate school expenses into my mortgage).

It's a disgraceful idea to mass default on a college loan.

Dec. 01 2011 10:20 AM
Lauren from Nyack

If my husband and I didn't have to make astronomical student loan payments each month, we would definitely be putting that money towards buying a house. Heck, we'd probably go to eat once in while and maybe even buy each other Christmas presents!

Instead, it looks we're going to be underemployed renters on a personal austerity budget for life.

Dec. 01 2011 10:19 AM
BSG

We should also draw attention to the outrageous cost of private college education in this country. My private college in 2000 cost $32,000 per year. In 2011, students are asked to pay $56,000 per year for the same education at the same school.

Meanwhile, the income of the average American has not grown to support this rising cost in education. Students are being forced to choose between a good college education and being in debt for the rest of their adult lives.

Dec. 01 2011 10:19 AM
Joe Corrao

hahahahha...this getting crazy.

Dec. 01 2011 10:19 AM
Morgan from Manhattan

I paid off my undergrad in the late 80's with summer jobs. My graduate education in 1997 cost me $75,000!

What changed in 15 years?

Dec. 01 2011 10:18 AM
RJ from prospect hts

I hope OWS is also addressing the issue of loans for *vocational* training as well as those for colleges. There have been efforts to diversify the movement, and I believe the large majority of vocational students are people of color.

This also engages our friends in the labor movement, which has apprentice training programs that are difficult to access.

The work involved here have been for well-paying plumbing, car mechanics, electricians' skills for work that cannot go overseas.

Dec. 01 2011 10:18 AM
Edward from NJ

Isn't the real problem the cost of higher education? Why do private Universities cost $40,000+ per year?

Dec. 01 2011 10:18 AM
Mike S from Jersey City

I had the opportunity when I graduated to consolidate my student loans at a rate of 2.75%, which I think is a more than fair rate. It's the cheapest money I've ever been able to get, and I have never missed a payment, even though I've been unemployed at times since graduation. My payments are manageable, though, because I chose a state school to limit the risk that I wouldn't be able to pay my debt. The sad fact is, most entry level jobs don't pay enough to support loan payments on a $100K+ education, regardless of the interest rate.

Dec. 01 2011 10:18 AM
David from Greenpoint

This idea of default simply demonstrates that these students do not belong in academic institutions, since they are not learning about life. Once again the middle-class taxpayer will be held responsible for these irresponsible students.
It is time to reconsider the trades, from which one can earn a good living, because college is not the answer.

Dec. 01 2011 10:17 AM

If student loans are forgiven then everybody's loans should be forgiven. Mortgages, credit cards. If you take out a loan you should you're responsible for it.

Dec. 01 2011 10:17 AM
Aaron from at work on Wall Street

If anything perhaps the interest rates should be capped. While I take full responsibility for my student debt, I think I'm being taken advantage of with an interest rate at close to 7% (for graduate school loans taken from 2009-2011). My undergraduate loans are consolidated at less than 3%, which is totally reasonable and allows me to take my time paying them back (at the income based repayment level). If I do the same with the 7% loans, I end up paying double my debt due to accrued interest.

Dec. 01 2011 10:17 AM
Christy Thornton from Brooklyn

One thing being overlooked here: the most important thing about the Occupy Student Debt campaign is its *collective* nature - it's a promise to strike, which is to advance our collective position vis-a-vis the student loan industry. We can overcome this lack of incentives to negotiate with debtors when we have million people are pushing their collective power!

Dec. 01 2011 10:17 AM
Joe Corrao

we have lost our way

Dec. 01 2011 10:17 AM
E from NJ

I'm already defaulting and it's not because I want to protest. It is because I cannot afford to pay and it's mostly private loans so I have few options. My 35k loan is up to 80k based on late fees and interest. :(

Dec. 01 2011 10:16 AM
JanO

It would be interesting to know how much of the debt is for philosophy degrees at Harvard, say, as opposed to a diploma mill institution that spends so much on advertising that we all know who they are.

Dec. 01 2011 10:16 AM
Theo from NYC

What about colleges? How about pressure on colleges to charge less for education? They are gaming the system to.

Dec. 01 2011 10:16 AM
Karen from NYC

Begging the question by speaking of "responsibility" and "bad decisions,". Maybe they were responsible and made the best decisions that they could based on what was available. Maybe the banks are at fault, not the students.

Dec. 01 2011 10:16 AM
Carolyn

The idea of student loan forgiveness is basically a financial handout to self absorbed people who did not have the foresight or self control to attend a school they could afford and/or pursue a degree that would allow them a career which could pay back their loans. It would be a better to give the money to another group of more deserving people...say the poor. By the way, there are a lot of us high achieving highschool studenets who did the math and decided to go to state schools instead of Ivy League and who determined not to attend graduate school. Why reward poor judgement and forgive the loans?

Dec. 01 2011 10:16 AM

Yet another indication that our Korrupt Kapitalisim™ has completely run amuck!!

Education is TOO DAMN EXPENSIVE!!!

Is it ANY wonder that banks have found a way to profit from education???

THIS IS F*N SICK!!

SICK!!!!!!!

Dec. 01 2011 10:16 AM
Maya Toitova from New York

Just to say: STUDENT loans, so-called, get an awful lot of attention, but never mentioned in these discussions are the PARENTS who are paying off the bulk of the costs of college... I myself -- perfectly typical -- pay about $10000 each year for this particular sort of debt -- expect to be paying more for many years to come -- and I am of an age where retirement seems plausible, except for this overwhelming debt.

Dec. 01 2011 10:16 AM
David from West Hempstead

I just want to preemptively register my irritation with people who will say that only degrees in engineering are worth borrowing for.

It's a huge personal risk to default on loans, and I very much doubt that the banks the loans are owed to are going to go out of business, so it's simply suicidal.

Dec. 01 2011 10:15 AM
Michael from Greenvale

Two things for the future:
1. Make the age at which a person could borrow 20.
2. Any one borrowing money needs at least 1,500 hours of either military or community service.
Send young adults to college not children looking to cruise through the 13th grade.

Dec. 01 2011 10:14 AM
jgarbuz from Queens

After their destruction of the K-12 educational system in the late 1960s, the Left then went on to brainwash the country into believing that everyone MUST get a liberal college education, or be damned into the abyss of oblivion. This created a plethora of teaching and academic positions for same otherwise useless Leftists. Naturally, the eclipse of vocational and other occupational studies in the secondary school system, meant more kids had to go on to "higher education" just to get what they should have gotten in a more rigorous high school experience.

Anyhow, the whole shebang is just another huge debt bubble that is now bursting along with all the rest. It's all mainly the result of the extreme Left and their social engineering experiments that have all finally come to their inevitable dead ends.

Dec. 01 2011 10:14 AM
kim from Brooklyn

I disagree completely with the banks determining whether or not the student can pay back the loan, then people wanting to go into lower paying careers will not be able to get loans additionally it will become a class system where those with better economic backgrounds get the loans. I took out 30K in loans to go into development work. If the banks had a say in this I would not have received the loans.

Another point- the govt took away the loan deferment of interest while in school which places an onerous burden on those in school.

Dec. 01 2011 10:14 AM

Everyone should start by knowing some students use student loans as credit cards. These loans are sometimes used for living expense not just for tuition and books

Dec. 01 2011 10:14 AM
Joe Corrao

Gvt backing student loans caused costs to rise...gvt has no place in this

Dec. 01 2011 10:14 AM
Sheldon from Brooklyn

Student Loans = modern day share cropping.

Universities take full advantage of this dubious exploitation of 18 year olds by constantly raising their tuition.

All federal loans should be banned for private universities, except for science, engineering, and the like.

Dec. 01 2011 10:14 AM
Morgan Paar from Manhattan

I wanted to teach on the university level. I was told I needed a Masters Degree. I went to graduate school, graduated in 3 years and now I'm $75,000 in debt. Now universities will not give me over 8 hours of class work because it means they need to give me benefits so I am in a adjunct funk with tens of thousands of dollars of debt.

Dec. 01 2011 10:12 AM
Mom_from_Brooklyn from brooklyn

I feel bad for young folks but are we teaching are children to manage money? I cannot help but wonder what they expect when they complete college. How realistic is the world that they live in. I recall living with 4 roommates in a small 'commune-like' setting to keep costs low and working three jobs to make ends meet. It took a good 5-6 years for me to get my debt in order but worked my butt off the entire time (still do with two kids under 10). Years later I still have 9K left to pay back on school loans and I continue to pay it back. I would agree that school costs are out of control but abondoning responsibility only brings things further out of control. People need a place to live - higher education is an option and a privilege. OK start throwing stones - perhaps I deserve it but feel the issue with learning to manage money and to be responsible should be included on the "Banner."

Dec. 01 2011 10:11 AM
Jim

I have been optimistically trying to give OWS the benefit of the doubt while they get their messages honed. It is profoundly disappointing to see such a lack of personal responsibility in their emerging policy points. I guess we should all just stop doing the "right thing". Is that the intended message?

Dec. 01 2011 10:10 AM
The Truth from Becky

Not a good idea....next.

Dec. 01 2011 10:10 AM
Joe Corrao

educated in things that has no resale value...no one forced them to go to a college they couldn't afford...not an issue...hopefully the next generation is smarter.

Dec. 01 2011 10:09 AM
Joe Corrao

we need common sense not erasing bad debt decisions

Dec. 01 2011 10:04 AM

Voluntary default won't be necessary as there will be plenty of unvoluntary defaulting going on very soon.

Dec. 01 2011 10:03 AM
carl, queens, n.y.

i believe any student that had to pay an ''origination fee'' which i believe is nothing more then ''shake down'' money, in order to obtain a loan, should withhold payments until this bandit fee is removed , and all interest on this fee be credited back to the student.. not even the mob shylocks charged me an ''origination fee'' when i was of college age.. someone try to justify this charge..

Dec. 01 2011 10:02 AM
Peter from Durham, NC

I really like the main message from Occupy Wall Street about financial inequality. For me, what resonates is this – If you are going to bail out the banks, you should bail out the homeowners too.

But it is interesting that the Occupy Wall Street folks are focusing on issues such as student debt and not other issues such as the financial troubles and limited opportunities which result from high rates of incarceration.

It feels that Occupy Wall Street is not addressing issues related to severe poverty. It feels that Occupy Wall Street is about keeping or saving the middle class.

Dec. 01 2011 09:15 AM
Martin Chuzzlewit from Manhattan

“DEBTS TO PAY” and OWS……..on that topic, what about the $4,000,000 that the now-departed OWS fools owe to the citizens of New York City for the police costs of parental supervision of their adolescent partying?
On a less serious note, that of “higher education” (LOL), I agree with the first post by Brenda. These students could lessen their student debt by demanding real value for their tuition, instead of the unaccountable bloated institutions that have little competition and that create administrative positions for every imaginary politically correct need.
There is a separate 100K/year Associate Dean for babysitting every perceived victim group represented on campus. There are worthless departments (Queer Studies, Black Studies, Native American Studies, Women’s Studies) with no real mission, employing expensive “faculty” members, and dispensing worthless degrees that come with no discernible skills. Formal leftist pedagogy doesn’t come cheaply.
Gee, it’s no wonder that these duped young people now resent being left with hollow diplomas, unable to compete for a job in the real world and holding a mountain of debt. It should be “Occupy the Dean’s Office”.

Dec. 01 2011 07:53 AM
Brenda from New York City

Student debt has become a serious problem. Forgiving debt is not sustainable. What we need is a consumer education initiative. Too much money is borrowed and often for the wrong school or major. I natter more about it here: http://heresheisboys.com/2011/10/26/educated-consumers/

Dec. 01 2011 06:50 AM

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