Streams

OWS and Student Loans

Monday, January 02, 2012

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. 

Guests:

Anya Kamenetz

Comments [19]

clarence

I owe over $210,000 on my combined student loans!! I have been paying for 19 years so far, but cannot make a dent in the total because the interest is soooooo high (8.25%). I have been only partially employed for two years now, but i still have to make a minimum payments (40% of my gross income) in order not to default. And all of that goes to interest. I have paid off the original more than completely. It is the interest that will haunt me to the end of my days. I dont see any light at the end of the tunnel. even a bankruptcy wont do it.

if the Congress could at least forgo the interest on the student loans it would be a respite to us all.

Jan. 03 2012 12:57 PM
danny

First, thank you for the many years of wonderful, stimulating, provocative programs. I am a 64 year old quadriplegic New Yorker who is filled with hope and motivated to take action by OWS. The discussion about student loans, particularly the notion of non compliance was riveting. The guests from Staten Island who advocated bank forgiveness was, in my opinion, checkmated by Miss Johansen's extreme passion and articulate advocacy of the OWS postion. The banks are made of marble and the marble is crumbling. I would love to be able to contact Miss Johansen. If it is permissible, pls send me her contact information.

Daniel Robert for the Coalition to End Medicaid-Enforced Poverty

Jan. 02 2012 10:01 PM
mcn

An important point that we need to remember, is that before all of this came about, the financial institutions gamed the system to be able to do what they are now doing.

What is wrong with the loans is not about the principal or a reasonable interest rate. That 80% of young people major in business rather than engineering or science, is the fallout from a different problem. What is wrong with the loans, is that there are no sensible limits or controls and the lender carries no risk.

The student loans and mortgages are the same in that the banks manipulated their way into a free lunch at the expense of borrowers who are trapped in the loans and retirees who are tricked into buying them. What will happen, inevitably, is that the loans will collapse and the retirees will lose that part of their investments.

Where we find ourselves now as a society, is that we are carrying parasites. It is not just the banks that have permanently stuck their hands into the pockets of nearly every one of the former middle class. Similar aspirations are pursued by many corporations.

In nature a successful parasite leaves its host with enough resources to live. Our human parasites are not that smart. The situation they have created is not stable, it has to collapse. But, if when that collapse happens the banks and "services" remain in charge, then we have gained nothing.

The argument that we need to be responsible and continue to pay them, is to try to sustain the unsustainable. What we actually need to do, is starve the parasites out of existence.

Jan. 02 2012 12:02 PM
fcvnyc from Queens

Debt is not only an economic or financial reality, it is also a social reality that is being studied by anthropologists and sociologists. An excellent example is David Graeber's book DEBT: The first 5000 years.

As a sustainability sociologist I have argued in a forthcoming book that real transformation is needed to deal with the economic and climate crises. This transformation can be effected by basing the international monetary system on a carbon monetary standard. Curious? Google monetary transformation or fcvnyc.

Jan. 02 2012 11:57 AM

Wow--I feel like I've totally missed the boat on this. We are talking about funding education so that you can get a good job. A job, where you show you got some brain talent that an employer might want and would therefore pay you to provide for his/her company. HOW CLUELESS must you be, before, during or after your schooling, if you can't get your head around the concept of debt, and cost/benefit. Eg, don't take on $150K in student loans, which will be $200K debt in 10 years, if you're going to get a job that pays $40K/year starting 5 years from now. If you don't "get" this, I, as your potential employer, am not sure you're smart enough to come work for me, regardless of your degree and GPA! I am much more inclined to help the sick, the hungry and the naked--provide outright welfare even-- because often poor people don't understand the system-- they are vulnerable and they get tricked. We university-calibur folks should probably know better.

Jan. 02 2012 11:06 AM
Robert from New York

I wished the discussion had been more balanced. Aside from trite and simplistic comments about "evil banks" who underwrote student loans, no mention was made of who actually own the bundled loans known as asset-bac ked securities. Pension funds, charitable foundations, and mutual fund shareolders -- saving via their 401k for retirement -- are large owners of this debt. Are these savers now to pay for the feckless student borrower who acted unwisely? Are not the defaulters merely veiling their own greed and selfishness by walking away from their legal commitments?

Jan. 02 2012 10:51 AM
Dana

I find annoying Anya's point placing the blame at the foot of colleges "who are not doing enough to control costs." I work for a private university and have not had a raise for three out of the last four years. Starting salaries were and are 10-20% less than the equivalent positions a public institutions.

Increased tuition at colleges are a direct result of two things: reduced donations and endowments and increased requests/requirements by students and regulatory agencies. Tremendous amounts of money go toward stuent services and to meet student expectations of lifestyle on college campuses.

Just as we've come to expect luxurious accomodations at hospitals (really? do we need all that plush carpeting in the maternity ward?) students are expecting much more to be provided by colleges.

Jan. 02 2012 10:43 AM
dboy from nyc

@alan trevithick from Mamaroneck

Thank You!!!

Columbia University... NYU... why is tuition so high and benefits to teachers so low??? What do they spend all their money on... besides prime Manhattan real-estate??? And, Lee C. Bollinger's nearly $2 million salary!!!!!

WTF!!

Jan. 02 2012 10:42 AM
Mary from NYC

Even though I'm an Obama supporter, we cannot give credit to his administration for the Public Service Loan Forgiveness Program or the Income Contingent or Income Based Repayment programs. Those programs were initiated from the Bush Administration.

Jan. 02 2012 10:40 AM
Don from Trenton NJ

Perhaps there should be a way for former students to refinance their loans like homeowners can with interest rates so low now.

Jan. 02 2012 10:38 AM
John from NYC

First we put in place policies to put people in homes they can't afford, and then we blame the banks.

Then we insist students enter college and study worthless topics like post modern gender/race/queer/post-colonialism, find that the education is worthless, and ----- guess what ----- WE BLAME THE BANKS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Try studying something that requires math -- oops, sorry, that is HARD.

Jan. 02 2012 10:37 AM
Dr. Stephen Curto from NJ

When I took a course regarding financing higher education at TC Columbia years ago, investing in human capital was always proven to have value as your guest states.

At the least there should be - just as with the home mortgage problem - a serious restructuring of the debt across the board so that both relief to the borrower but stimulus of the economy can happen.

Jan. 02 2012 10:36 AM
Allison from brooklyn, ny

Why doesn't the government eliminate interest from student loans it makes? I could pay off my $60,000 in student loan debt much more quickly if I didn't have to pay thousands of dollars in interest every year.

If the government can make interest free loans to the banks, why not to students?

Jan. 02 2012 10:35 AM
jgarbuz from Queens

First the gov't deregulated the banks, who went on to seduce the "virgins" into taking all kinds of loans, to buy big homes, big cars, big TV's, and big education, and then we call those virgins whores! Every day I was getting appeals to take and use credit cars to excess, and thankfully I did not. But I had gone through experiences in life long enough to know that debt can drown the life out of you. But young people, poor people, and others who were just too naive to resist being seduced into heavy debt fell prey, and now when are blaming them for having allowed themselves to be raped. Clearly, we cannot forgive all debt, but we cannot let the bankers get away Scot-free either.

Jan. 02 2012 10:34 AM
Henry from NYC

Geez, these people still haven't touched on the fact that it's important what major you choose when taking out these loans.
Caveat emptor.

Jan. 02 2012 10:29 AM
Eva from New York

There is education and education. I borrowed and repaid my student loans that I took out in the 1960s and 1970s. I have earned degrees from good institutions that provided the entry way to careers that pay adequate, if not great, salaries. However, I am aghast when I see some people borrow huge amounts to pay for educations (at some for-profit institutions and/or in non-paying fields) that will not yield career paths that will enable people to repay these loans. There should be some sort of forethought by the institutions that grant these loans regarding the likelihood that the borrower (and not John Q. Public) can repay them.

Jan. 02 2012 10:28 AM
alan trevithick from Mamaroneck

Most of the teaching in higher ed in this country is done by low paid and no-benefit adjunct and contingent faculty, giving the lie to the idea that an education automatically guarantees a decent standard of living. This is true for disciplines that are labeled "practical" and "realistic" like biology or engineering, and for those labeled by some as "useless" or luxuries"-all the humanities. The real problem is jobs, not education- We have some faculty on food stamps in this country. Organizations like my own, NewFacultyMajority.info, are trying to get this fundamental message across, and it's an uphill battle, because people don;t want to give up their notions about the relation between education and standards of living. But we can't move on unless we see the reality-the adcon faculty (adjunct and contingent) is the largest and most educated cohort in the country, and they can't make ends meet. Faculty are in this sense like many other labor groups-disenfranchised, disempowered and disrespected.

Jan. 02 2012 10:27 AM
Tish from New York

This is another example of this generation's whiny sense of entitlement. When I finished school (a generation ago), I faced debt almost three times my first year's meager salary. It took me twelve years to pay it off, including a two-year period when I went back to graduate school (and took on even more debt). I worked a day job for my career goals and a part-time night job at minimum wage just to make money to pay off the loans. At the end of the 12 years I had a career and the student loans were 100% paid. Just as I promised they would be when I took the money.

This complaining group not only needs to learn to be less selfish, they need to learn what it means to be responsible and not just take, take, take.

Jan. 02 2012 10:19 AM
Robert from NYC

Don't you think you owe your paying listeners more "real time" broadcasting? You guys sure milk the holidays/vacation days off. I bet you all make six figure salaries and probably many are even part of or very close to the 1% and much of that comes from the 99%!!! Think about. Maybe I'm wrong. It happens.

Jan. 02 2012 10:09 AM

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