General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsIndentured Students Rise as Loans Corrode College Ticket
http://www.bloomberg.com/news/2012-07-09/indentured-students-rise-as-loans-corrode-college-ticket.htmlGeraldine Damiani Brezler took out a $5,000 student loan in the late 1960s to study at the State University of New York. She became a nurse, got married, bought a house and repaid the debt in less than three years. Today, her son, David, 38, owes about $85,000 in loans for a masters degree in education at New York University. He cant find full-time work, lives with his parents in White Plains, New York, and has deferred paying his debt for three years.
The financial-aid odyssey of two generations of Brezlers tracks the history of U.S. student loans, which, like the home mortgage, helped define the American dream. In the early years, the loan program let ambitious teens take on a small debt that could pay off with a lifetime of higher earnings. Now, the $1 trillion in outstanding student debt has become a drag on the economic recovery, a flashpoint in the presidential election and a threat to the egalitarian ideals of U.S. higher education.
Its like waking up to a snarling wolf every morning, said David Brezler, who spends his days searching job listings, following up by e-mail and phone and taking on short-term consulting jobs. The idea of buying a house -- its completely inconceivable. How did a once-modest federal program spiral out of control, weighing down low- and middle-income families like the Brezlers that it was designed to help?
Indentured Student
The answer echoes both the health-care and mortgage crises. As college costs have soared faster than the rate of inflation over the past four decades -- reaching $60,000 a year at the most expensive private schools -- Republicans and Democrats alike postponed a reckoning. They encouraged borrowing and ignored surging tuition, leaving loans to balloon to the size of mortgages, shocking even the systems own architects. No one ever conceived this was a way to create a debtor class of former students, the indentured student, said Tom Wolanin, who worked on federal higher education policy for 30 years and was a deputy assistant education secretary in the Clinton administration. Politicians of all stripes ignored repeated warnings that the day would come when debt would become unsustainable.
snip
no_hypocrisy
(46,185 posts)Many colleges and universities will cut back on programs, perhaps face mergers with other institutions, public goes private, private sold to equity firms, and the threat of closure.
aikoaiko
(34,183 posts)The interest payments will either start immediately or be deferred and pile on.
For the individual student, this is as bad as bumping up the average student loan interest rate to 7%, but there is very little noise about it.
stockholmer
(3,751 posts)I also see that effective immediately and retroactively, the US Pell Grant scheme has been slashed from 9 years to only 6. Again, this IS NOT grandfathered in, so if you are starting your seventh year of higher education, you are immediately booted out of the programme.
The US higher education is absolutely broken. It is unsustainable, and will lead to multi-levels of collapse as the brain-drain will be horrific. A nation consistenting of 90% minimum-wage Wallmart drones dead ahead.
KansDem
(28,498 posts)stockholmer
(3,751 posts)at least 50% of the student debt holders will ensue? (a great thing, btw, IMHO) Do you think this is a possibility? If not, what is the solution?
I understanding (having lived in NYC for several years) that debt repayment is deeply embedded in the American zeitgeist as a 'moral responsibility' (a shockingly stupid thing, as the corporate oligarchs go bankrupt all the time as a business stratagem), but at some point, a critical mass will be reached, as there is absolutely no way that this student debt total liability can be 'grown out of' via a return to adequate growth patterns in terms of both the number and the pay level of jobs produced in the country. That is utter delusion, especially when you look at the staggering rate of educational cost inflation per annum.
You cannot get blood from a turnip. Just like the for-profit heath care system, the for-profit educational system will collapse. Infinite growth, which both are underpinned by, is fantasy land. It is a race to the bottom pits between the 2, and the US citizens will be flayed alive on the journey downwards.
Zalatix
(8,994 posts)That'll be a good day when the whole system has to be thrown in the trash.
coalition_unwilling
(14,180 posts)who got in excess of $80,000\year from the U. of Wisconsin and taught exactly 1 graduate seminar per year (consisting of 5-7 grad students). I know Jonathan Swift and Alexander Pope are important and all that, but that salary and teaching load struck me as just a little out of whack. Take that one prof and apply institution-wide (and then nationally) and I think you'll see, to quote a 16th-Century figure, that something's rotten in the state of Denmark.
Mind you, this was 25 years ago before the era of Herr Walker, but I'll bet things haven't changed much for those mandarins lucky enough to enter the professoriat on the tenure track. Maybe I'm wrong, but I'm guessing I'm right.
coalition_unwilling
(14,180 posts)Students cannot discharge the debt through bankruptcy. The U.S. government and its collections agents can and will pursue students until debt to collect on any technically defaulted debt (hence the 'indentured' tag in the headline). I've read stories here recently of Social Security paymnets being garnished to satisfy arrearages. IIRC, death does release the debtor, i.e., the government cannot attach the assets and income stream of surviving family members. But I'm not even 100% sure about that.
coalition_unwilling
(14,180 posts)Zorra
(27,670 posts)begins to force change. The student loan situation is just one of so many examples of how the 1% is bleeding the 99% dry.
The system is plainly broken and is unsustainable. It's being held together with duct tape, velcro, and baling wire.
The absurdity of this end stage of terminal laissez faire capitalism would be hilarious if it were not so universally deadly.
marmar
(77,090 posts)And the sooner we accept that reality and quit trying to prop it up, the better.
coalition_unwilling
(14,180 posts)an Occupy Free University. The OLA Free U still maintains a token presence even now, but has had to scale back significantly given the lack of infrastructure and constant police harassment at Pershing Square and other localities.
Volaris
(10,274 posts)or how hard it is (and it is a bitch sometimes) I'm paying cash for college. NO LOANS.
coalition_unwilling
(14,180 posts)financial aid, though. Some portion of your package may consist of grants and\or scholarships, monies that do not have to be repaid. If you package has student loans, you are under no obligation whatsoever to accept them.
Marrah_G
(28,581 posts)Pells grants, community college, the national quard, Americorps
Take your time and look at all your options.
Romulox
(25,960 posts)Occulus
(20,599 posts)how these students voluntarily entered into binding contracts they are morally, ethically, legally, and Biblically obliged to fulfill.
And that will be the sum total of their "argument".
Marrah_G
(28,581 posts)But as long as it is, parents need to guide their children more carefully in choosing schools and majors. I often think parents are to willing to sign any paper they need to to get their kid into what they consider a "good school" they do think ahead to the enormous debts they or their children will face.