This Week in Poverty: Taking On Sallie Mae and the Cost of Education

[xchrom]

http://www.thenation.com/blog/174597/week-poverty-taking-sallie-mae-and-cost-education



Nearly 200 students, parents, community members and union leaders rallied at Sallie Mae’s annual shareholder meeting in Newark, Delaware, yesterday. On the agenda: first, demand that the nation’s largest private student loan lender meet directly with students to discuss their crushing debt burden; and second, introduce a shareholder resolution calling for disclosure of the corporation’s lobbying practices and membership in groups such as the American Legislative Exchange Council (ALEC).

Outside of Sallie Mae’s corporate headquarters, the activists were met by “dozens of police, blockades and K-9 units,” according to participants. Sarita Gupta, executive director of Jobs with Justice–American Rights at Work, urged the crowd to confront Sallie Mae executives and board members “about their role in America’s student debt crisis.”

More than 38 million people now owe over $1.1 trillion in student debt; Sallie Mae owns approximately 15 percent of that debt, or $162.5 billion. Students owe an average of $27,000 when they graduate from college and many have a debt load several times greater than that amount. Nearly one in ten will default on their loans within two years.

Gupta noted that Sallie Mae “spent $16 million on federal lobbying from 2008 to 2012 and has more than sixty state lobbyists.” The corporation has lobbied at the federal level “to block student loan reform,” and at the state level “for reduced public investment in higher education, forcing more students to rely on private student loans.”



Read more: http://www.thenation.com/blog/174597/week-poverty-taking-sallie-mae-and-cost-education#ixzz2UxpgjNPQ

[Ilsa]

1. This is another shame on our nation.

And it's so backasswards. I think we need a jubilee, even a partial one would help.

[Laelth]

4. I think a global jubilee is much needed. n/t

-Laelth

[Igel]

6. Partly agreed.

There's far too much credit. Jubilees and the like make all but the shortest-term credit all but impossible to obtain and makes everything into a current-account economy.

[FarCenter]

2. Student debt is high because interest rates are low

Families take out student loans instead of running up revolving credit, financing autos, getting second mortgages to pay for education.

Student loans get paid off after other types of loans, since the interest rates are lower.

[Igel]

5. Student debt is high for a lot of reasons.

One is high tuition.

Another is the insistence on attending expensive institutions that you can't afford just because you can and not because you're a good fit for them. It's painful to watch a poor, underprepared kid take out a huge loan and then barely survive his first year or two.

Another is the habit of accepting the full amount of the loan. They calculate generous living and textbook allowances and students "manage" to use every cent. Cut expenses by $1000 or $2000 a year, and after 4 years you're $4000 to $8000 less in debt than your peers. But it takes a special sort to say "no" to money and then, as a consequence, miss out of the "full college experience." Things like spring break.

Or they take out the loan while their parents send them money for extra stuff like nights out, spring breaks, nicer apt.

Some students stay in school longer than they expected. They take 5 years to their bachelors, 3 for their masters, 7 or more for their PhD. Often they're unnecessary years. Or they start, realize they can't finish the semester, and owe the money anyway because it's too late for the tuition refund.

Lots of reasons. Low interest rates are part of it. But remember, special deals were offered to prospective mortgagees to borrow more or borrow risky. People are weak and, when offered cheap money now, weight current pleasure over future pain, current consumption over future payments.

[Laelth]

3. Privatization stinks.

Sallie Mae proves it once again.

-Laelth