If you need to borrow a significant amount of money to go to college, you should not go. In many cases, the “investment” is not worth it.

I know from my own experience and by observing many of my peers that most people with a college degree rarely work within their field of study. Not only is a college degree often times irrelevant to your career, it is never a guarantee of securing a job -especially in this economy.

People need to think twice about the massive debt they may incur. There are many options (other than the traditional four-year college) for obtaining skills, credentials, and experience that lead to rewarding careers and an enriched, well-rounded life.

The largest experiment in socialism today is the college campus. Colleges have driven the sky-high cost of attendance to include more low-income students. Colleges clamor to admit as many low-income and diverse students so that they can tout the stats. The result of this practice has produced a class of students who owe the most money in history for attaining a college degree. Wealthy students have their college expenses paid, lower income students absorb all the financial aid or “free money” that does not have to be paid back available because everyone wants to be a part of the “feel good” story of contributing to a Horatio Alger story and again they want the stats on the books. Students from middle to working class households are expected to “suck it up” and follow the archaic federal methodology formula of the FAFSA and borrow most of the finances to attend a four-year school.

The $88 Billion Default Studemt Loan industry is the main reason college costs have skyrocketed over a 25 year period in a near absence of inflation over that same period.

Higher college costs are also a great way to discriminate against people of color and the poor from getting a quality education as well as induce people to borrow or otherwise deny their children an education the well off take for granted.

Criminal laws were lobbied for and legislation passed DENYING student loan borrowers BASIC consumer protections every citizen enjoys. Why? If not to nickel and dime borrowers into the grave. Higher college costs also increases the likelihood of loan default hence more profit.

These predator criminals (Student Loan Industry) and the criminals in Congress who support them have so much as admitted (like the Credit Card Cartel) that there is no profit in “good” borrowers only in those who default.

These criminal laws need to be repealed and basic consumer protections restored to student loan borrowers. The cost of college needs to be brought back to realistic terms so that there is less need for poor, middle and lower middle class to borrow for what should be a right not a privelege in this shell of a once great country.

I would like to know why the rates for student loans are so high. Surely if banks are getting money to loan almost interest-free they could lend money to student at a much lower rate that the 6-8% that seems to predominate. Also, why is it that student loans can only be consolidated once? Why can they not be refinanced? I have a daughter contemplating law school, and that is a huge investment.

Thanks for addressing this topic. I am a professor at a small public University.

University admissions counselors at private schools are encouraged to talk 16 year old children into taking out massive student loans by focusing on only the ‘out of pocket’ cost.

A university in my community has tuition close to $50,000 per year, and its most popular major is education. They also are #7 nationally in student loans after graduation, and remember, only a fraction of the freshman class reach graduation.

Statistically speaking, a freshman who starts at this school is much more likely to do serious financial damage to their lives by choosing this university, if they graduate or not. It is not due to academic reputation, it is a fine school. It is basic math, a $200,000 teaching degree makes no sense, therefore they have to rely on tricking insecure teenagers into borrowing. The truth hurts.

It is UNFAIR for unscrupulous corporations to enjoy bankruptcy protections that citizens with student debt are denied. It is UNFAIR—immoral, for ‘distressed’ corporations to not honor obligations to pensioners, insurance holders, while creditors who extend loans to students are allowed to garnish wages, and impose liens, EVEN on persons on a fixed income, EVEN when these persons eke out a living on Social Security Disability Insurance benefits.

While the cost of higher education is a scandal, what is more reprehensible is our sick society in general: we do not value work, or education, thus our workers are slaves to debt, they cannot trust their employers, and are left to manage their own retirement and healthcare! As for education, it shocks the conscience that we should imagine higher education as useful only to get a job.

Is not the public’s interest to have an ethical, informed citizenry? Well, let’s see what a bunch of unemployed MBAs, JDs, and plain ol’ Bachelor degrees can do to finally CORRECT this disgusting mess!

It’s about time this topic emerges on the social radar. IMHO, US colleges and universities should offer free tuition to any student who majors in a field that is often outsourced to a foreign country – e.g. computer science, various engineering, etc.

What is wrong with the system:

There is absolutely no protection for the consumers (at least the last eight years)

Loan originators have passed anything and everything under the sun thanks to the administration.

Two examples:
Verizon…. when we signed up for them, non-Peak hours for the Cell Phone billing cycle was starting at 7:00 pm. Even though, our national work schedule has not changed and the definition of the word “peak” has not changed, now it is 9:00 pm. There is absolutely no accountability with the bait/switch contracts they impose on us.

Discover Card: Here are the numbers from our statement
Previous Balance $ 579.80
Payments and Credits – $ 59.98
Purchases + $ 796.89
Finance Charges + $ 23.29
Statement Balance = $ 1,340.00
Meaning they charged $23.29 interest on $579.80 for one month. This is exactly 4.01690238% per month.
When it is compounded =(1+(A3/100))^12 you get annual rate of 60.4157464%
Wonder what is holding them up from 200%.

Just like the student loans, they cleared up the way so that, legally, there will be nobody to complain to.

What a bunch of whiners. People misbehave and them blame others for the consequences of their bad decisions. You decided to get a worthless degree at a “name” college and ran the tab. The bill is now due…PAY IT and stop whining. Take three jobs if you must, but PAY IT!

No noe has ever put a gun to my head to sign loan papers, choose where to go to college or anything else and no one did that to you. You wanted something and someone made it available. Take responsibility…

If you would not pay the college tuitions, they could not raise the costs!?! Apparently they did not teach economics where you went to school.

I graduated with $25,000 in student loans back in 1997. I too was under employed by a University after graduation for 3 years. I never defaulted but I did receive statements telling me they had miscalculated the loan interest and therefore were changing my payment to $100 more a month. I had no way to fight it and they put the fear of god into you that you will be destroyed if you do not comply. therefore I went without clothes, meals, and all extras to pay these loans off. When people asked me who I worked for I used to say,” Sallie Mae owns my little working body.” The scam is that my parents paid $1,000 a year for college and could work all summer for that money. Now there is no way any student could work a summer job and even come close. I worked for the Universities and it is a business that relies on these loans. Look at the top Universities they have a two year degree where students that are not qualified get in to “prove themselves” but this is really for the Universities to get their loan money and then drop them after two years.

Whether or not Americans like it, they need a more European model for higher education. Whenever profit enters into something that is supposed to be more of a service to the people, greed takes over and abuse happens. See the cost of healthcare for another example of this.

You say “scam” is a harsh word?

Howabout “usury”?

Howabout “theft”?

(“Some rob you with a six-gun; some with a fountain pen.” or “The banks are made of marble, with a guard at every door, and the vaults are stuffed with silver–well, actually, worthless fiat money, called “federal reserve notes”–that the [miners, sailors, teachers, non-"financial sector" folks] sweated for.” With apologies to Pete’s neighbor Les.)

The predatory lending is definitely a problem. But what about the very idea of paying hundreds of thousands of dollars for school? Shouldn’t everyone have the opportunity to go to college? Isn’t it a necessity? A basic right?

To answer Tom, there is definitely a problem with the system, and it goes beyond student loans to lending of all types, as Lilya points out with her credit cards.

I have heard that American banks are using student loans and credit cards to make up for losses on their bad decisions in the mortgage mess. They just raise the rates borrowers have to pay. Another outrage. We need regulatory limits to interest rates these financial institutions can charge.

And how are college graduates going to go out and stimulate the economy (or people with credit card debt) when their interest rates are going up so that payments make up a larger amount of their monthly expenses? Another example of how tax cuts are a drop in the bucket compared to how the government has let the rich and powerful bleed the American people.

Lilya, fight back and pay off your balance! Don’t let the banks abuse you!

I think there should be low interest loans, say 3 to 4%.
They should be backed by the government and should be available to anyone who qualifies. I think using the word scam is little harsh, but the costs of education is absurd.

It’s free in Denmark, almost free in Germany and France.
It used to be free in Great Britain, but now they pay like we do. In these countries it’s a lot harder to get into college and they are tied to type of job you get after school. France and Germany are good examples of this.
Most students know where they are at by the end of junior high. We don’t do this here and have more freedom but at a cost.

Why is it that students in French Universities have a free education?

I was always told that “consolidation” involved a lower interest rate. When I consolidated, I was handed a higher one. Why on earth would I want to do that?

I owe over 80k for my undergrad [B-Arch, 5 year degree]. That was my decision, and I don’t think I should be ‘bailed out’ or anything like that. My problem, however, is with the school I attended and it’s financial aid system. Had I been able to maintain the level of financial aid I was receiving my 1st year, I would owe something like 40k or less – but each year they took more and more away, until my 5th year [it was a 5 year program], where my choice was to pay nearly 100% of my tuition or to ‘leave’, as the school put it. What kind of choice is that?

They get you when you’re starting, then pull off on the aid so you owe more and more – while at the same time, you’re less likely to go to another, less expensive, school.

Don’t get me started on the credit card companies.
I do think the student loan companies need to be reformed.
You should be able to renegotiate the loan payback if interest rates go down. The whole thing is a mess, and this ties into the whole financial mess we are in now.

We need to overhaul the whole system, from top to bottom.

TO R.M. – you get what you pay for and you don’t get what you don’t pay for. That is a quasi socialist sytem they have. Name a recent famous french acedemic? Now name a few recent American acedemics…it’s pretty easy to figure out.

Student loans have allowed students like me to attend prestigious institutions on the basis of merit, instead of who you know or are related to, and how much you can afford. What is the alternative? Might the Harvards and Stanfords simply become the realm of the wealthy? Could they maintain their institutional strength without the full breadth of students who now attend on the basis of loans?

Teddy–Cambridge, MA

As a professional, I accumulated a pile of student loans, only to find that because I am actually able to obtain a stable job with a decent middle-class income, I cannot deduct student loan interest from my taxes. Yet, I can deduct mortgage interest…regardless of income? Does this country really prioritize home ownership over higher education? It certainly seems so.

THANK you for this topic. I have actually contacted my House Representative for help as I’m in a similar situation as Theresa. I wasn’t aware of the StudentLoanJustice.org website and will be submitting my story to that site and staying involved. Again, many thanks for sharing this story and resources.

One thing that has not been discussed on the radio program yet is that when college students graduate, they have to get a job quickly because the clock on their loans is ticking. The starter job they will get is generally a low-paying, bottom-of-the-ladder job.

My problem was that a significant chunk of my income had to go straight back to Sallie Mae (and, later, after being convinced to consolidate after dozens of harassing phone calls, NelNet). I cheaped out on food and other essentials because I had to send so much money to the loans!

~~~~~~~~~~
I disagree with April, above. I did recruiting for a New York City government agency, and due to the popularity of the environmental education job I was hiring for, we receieved hundreds and hundreds of applications per job opening. The only way to even start sorting through them was to only consider applicants who had a college degree. (Interesting, especially, since i was one of the last, if not THE last, person hired for the position without a degree…got in by the skin of my teeth.) The plethora of applicants wiht college degrees forces others to get degrees in order to even have their resumes looked at.

I agree with the caller from Florida. There are real public health and social consequences to this debt-load. Consolidation is easy to do by telephone and the “fine-print” is sent later. Consolidation can erase the debt forgiveness available for teachers – so many people leave teaching for better paying positions. Veterinarians, such as myself, graduate with upwards of $80k to $100k in debt, even when we attend much more inexpensive undergraduate colleges and state veterinary schools. I graduated with $87k in debt after completing a BS at a SUNY school with very little debt AND my husband worked full time to pay my living expenses while I was a student/graduate student. The result of this massive debt in veterinary medicine is that most graduates go on to specialize (in excess of 70%) so increased salary will help to compensate for the massive debt load. I went on to specialize in pathology, instead of becoming a large animal veterinarian as I had originally planned. There are too few large animal vets in the US today because the work is hard, cold, dangerous and pays less than 1/3 what a specialist can earn. Yes, approximately 50K dollars a year for a large animal vet, to pay back $100K dollars in debt, raise a family and live. That is the equivalent of starting out with a mortgage. Our public health system relies on disease surveillance by veterinarians in the field, and large debt load is contributing to the loss of these professionals, as well as general practitioners (M.D.) willing and able to serve underpriveleged areas.

A college education is important, but many lose sight of the many ways to achieve it. Many community colleges offer ties to four year institutions. This requires ignoring the hype that surrounds private colleges and the snobbery of many guidance counselors. It also requires commitment and maturity on the part of students in order to complete an undergradueat degree in four years. Why is the only acceptable education that seems to be addressed by listeners is an expensive attained at private colleges or universities?

This isn’t a scam, it’s an absolute screw! I find myself quoting Clinton (George):

“America eats its young.”

We should be a little angrier and a little louder.

On top of everything else there are the diploma mills, outfits that used to advertise on matchbooks now call themselves ‘Universities’ and are FOR Profit! They advertised and have small print warnings that say “Credits earned are unlikely to transfer” They collect student loans just the same as any state school (SUNY for example) but they do not result in as marketable degrees (How many video game designers do we need?) NYS went after the empty classroom scams but why not go after the diploma mills??

Why is it that good athletes are give a free 4-year education in many cases, and good academic scholars are not??

Until Americans truly value EDUCATION for the great contribution it makes to community and polity, we will have an economic divide as to who can be educated and who cannot.

It seems student loan lenders are guilty of lending more than they should given what many student’s earnings expectations are – just like mortgage lenders with subprimes. Some will say it is the student’s fault for borrowing so much, but does an 18 year old really know what will happen, especially when some lender is saying “Oh, you’ll be able to afford this”?

I’m specifically curious about the effect of the last Secretary of Education’s embrace of the University of Phoenix, and the considerable expansion of federally insured student loans to online, for profit universities with no incentive to control expenses, and no protection for consumers of education or of the loans themselves. And, finally, with exceedingly high default rates reflecting the loose association of students with online learning and the poor networking, support system, and direct faculty-student and peer interaction that occurs even in non-residential colleges.

How can we protect these “investors”?

“Student loans have allowed students like me to attend prestigious institutions on the basis of merit, instead of who you know or are related to, and how much you can afford. What is the alternative? Might the Harvards and Stanfords simply become the realm of the wealthy? ”

Bahahaa….they are still the playgrounds for the wealthy, are you crazy? I live in Cambridge as well, attended Harvard. The incredibly wealthy students from prestigious families keep those schools afloat & the real estate market here sky high. Wake up.

I budgeted my lifestyle to pay off my loans. I’m not in law or medicine where those loans are easily paid off in 5 or 10 years. I paid to play, and I sacrificed to clear my debt. So should everyone else. I, like Ryan, had my financial aid pulled out from under me and I still managed. People want so much for nothing now.

Disclosure:

What difference does it make when the Loan Originators have the expertise and ability to hide and fudge their goal of screwing people who are desperate and are experiencing this event the first time in their lives.

These are predatory practices and all the roads are paved for it.

When was the last time, you read 46 paragraphs in your credit card contract.

Why can’t the Congress pass laws to undo the “reform acts” between 2008-2008; and reverse them in the opposite direction, asap; instead of talking about waiting for “stimulus heaven”.

I think it is important to point out that tuition is also going up at state schools. I went to a state school out west (1979-1983). The tuition there is now about 5 times what I paid. In MA, where I live now, the tuition rise at U Mass Amherst is a factor of roughly 10 times over the same period. (There is a comparision of yearly tuitions at
the UMASS website, but all their tuition info is pretty well buried). And neither the state colleges/universities or the community colleges have the capacity to absorb everyone who wants/needs higher education. Unless we expand them hugely. Which, of course requires public money.

FAFSA should not require your parental income.
My parents are divorced, my mother could not help me financially with tuition, rent, etc.
My father is able to contribute but does not believe in payingfor a child after the age of 18.

His income was a requirement that was factored in to my student loan package
even though he was not providing funds for my education.
I received NO financial aid and graduated with 45,000 in student loans. I will have then paid off by the time I am 37. My only other choice was to delay college attendance until the age of 26, when FAFSA no longer requires parental income.

If these loans are such a ripoff, then why do people keep going to the gov’t to get them? You can just go to a private lender and get a personal loan.

I’d like to know why student loan interest is not deductible for a married student filing a separate return.

Key to lower costs and end to loans? Too many college administrators and not enough full-time faculty: Just get rid of Schilling and his ilk.

Recently my 49 year old sister has found out that she owed 17K on an $1800. student loan from over twenty years ago. The collection agency has forgiven some of the debt and now she only owes 11K but still this is a hardship for her. They are trying to get her to sign an repayment agreement which she has been hesitant to do. Should she sign this? Right now she is paying off $100. per month.

Jojo you probably naively also think that the french medical system is deficient. (You obviously have not travelled very much )..Do you work for a student loan company ? Schools should not be a bussiness .

Working in the Universities I found that students were being scammed by giving large loan packages and scholarships for the freshman year. Then in the second year the University would cut all the scholarships knowing the students would feel caught and therefore take out more loans, which all my students did. It put the kids in a catch 22 either leave and waste your freshman year and be forced to take a year off (they would wait until fall entrance to withdraw loans) or take out more laons, which the students would.

I went to college early — when I was 16, so I was literally signing up for these loans when I was 15 years old. No need of a cosigner or anything. Just had to fill out the old FAFSA form and my local bank was happy to give me the loan. Now I’m 30 and still paying them back. And will be for a long, long time.

Want to stimulate the economy? Figure out a way to reduce student loan debt. My husband and I would love to buy a house but between the debt I went into as a teenager and the debt he took on for law school, we pay an amount each month equal to the mortgage we would like to have instead.

I have a high school senior. Are there better lending programs?

To Jojo interesting that you think the French education system is so lacking when for decades now when entire post-modern philosophy and theory departments were based on French educated philosophers and sociologist, such as Foucault, Jacques Lacan, Claude Lévi-Strauss, and Roland Barthes, and Jean-Paul Sartre.

Just because you know nothing about the French education system does not mean it does not work. It works well for the French. I would not want a system like theirs, however I would like to see us return to Federal loans at low interest rates that pay the whole freight with an option for using public service as a way of borrowing less.

It is not only the private banks who prey on people–the federal role in this needs to be looked at as well. A friend and I have children who are planning on college this fall. When I filled out the FAFSA, it told me that our expected family contribution would be $48,000, which is nearly a third of our income. My friend and her husband have been out of work for the last year, and she was told they would be able to pay a similar amount. We live in the northeast where the average housing cost is around $500,000, and it appears that the figures are based on our home equity values. Perhaps if she and I did not understand things like debt to income ratios we are we would think that if the federal government says that, then we must be able to afford it. But think of the people who don’t know that–we’re all upset about the unscrupulous banks who untruthfully told homeowners they could afford their home–is anyone aware that the federal government is doing the same thing with sudent loans?

In my research, I found that independent economists recommended not going into college loan debt for more than one year’s tuition or one year’s expected salary after graduation. This is certainly better advice than what the federal government is saying.

Are there any laws in place which require student loan offices in schools to post public service notices advertising independent advice on the process. For instance a poster encouraging students to visit studentloanjustice.org or a clearly posted copy of any explainations of students’ legal rights on the topic? Seems like in the interest of transparency the schools would be more than willing.

TOM, YOU ARE TO BE APPLAUDED for:
1. Recognizing the book, the author and this very
critical situation which is well-hidden.

2. Being fair, articulate and allowing your guests to speak WITHOUT INTERRUPTING them.

3. PLEASE, remember us, the people who need FAIR treatment. HARDSHIPS HAPPEN…just like accidents…
Too often, STUMBLING BLOCKS greatly affect lives UNTIL DEATH!

Thank you again.

This is a HUGE scam and is hurting young and old alike.
It really doesn’t make any sense to go to college & to be in debt the rest of your life. If i would have known i was going to be 72K in debt until i am 78 yrs old i would have rather went without the education – it IS NOT WORTH IT> i am a mess financially, emotinally and physically. I hope someone helps us out soon.
Thank you for listening.

Not only did my school pull back more and more on the financial aid – so I went from owing 7k for the first year and 20k for the last – but they DECREASED my financial aid when my younger brother started school. My parents are public school teachers, and didn’t get some kind of pay increase.

I feel as if I was duped, and they slowly took aid away so that I would be less and less comfortable with leaving. When I discussed this at the time with the financial aid office, the attitude was that I should leave – as they didn’t understand why I expected to receive a consistent amount of financial aid. They all but admitted that it was a ploy to get students in the door for the first year.

Additionally, the financial aid office acted surprised that I expected aid for my 5th year [of a 5 year degree program, for which the school is well known] – explaining that I somehow should have graduated in 4, refusing to consider that if you offer a 5 year degree that you would also offer financial aid for all 5 of those years [a number of students who graduated with me faced similar issues, and owed outrageous amounts].

Meanwhile, the same thing [essentially] happened to my younger brother, who also owed nearly the entire tuition his final year of school – his financial aid office [different school] argued that our parents should be able to afford more, as I had finished school.

It’s a structure based on trickery – after my first two years I estimated that I’d owe under 40k. Now I actually owe over 80k, because of their questionable system and practices. That, and based on parental involvement – a commenter earlier suggested that loans make it so that college isn’t only for the rich. Well if that’s true, explain the expectation of the parents role in paying.

This show personified the problem with presenting one point of view from an author who is out to flog his book. There are serious problems with the student loan program in this country and with the rising costs of an undergraduate education…but it is not really because innocent college students are being victimized. Two points:
First: if you borrow $2,000 for school and then don’t pay it back and vanish for 15 years, you can bet the penalties will push the loan into double digits.
And whose fault is that?
Second: I graduated from college in 1969. My brother wanted to go to graduate school but our family could not afford it and neither could he. Guess what: he didn’t go. Now EVERYone seems to want to go to graduate school. You need to be aware of how much grad school will cost and how you will pay it back. It is pretty simple: if you are going to go into $100,000 in debt and plan on working as a high school teacher you are going to have a very difficult time paying off your educational expenses. People need to make that decision BEFORE they take on the debt and then be responsible for their actions.

Thank you Mr. Colinge for exposing the scams designed to drain the middle class. My husband worked for Michigan Guarenteed Student Loan program that pushed products that encouraged thousands of dollars debt. Mostly to young people who have not even started their lives with families, kids, cars and mortgages.

Shame on the congress, banks and Sally Mae for contributing to the financial crisis of America! The combination of Wall street and housing mortgage meltdown just exposed more greed and mismanagement by all. Both political parties GOP and Dems are also to blame for riding the tide and feathering their nest.

It is disgraceful that young American’s are loaded with loan debt for a pieace of paper (degree) that has a shelve life of about 4 years. The internet has changed knowedge based learning and the antiquated U.S. education must change. The system needs to be redesigned to keep pace with technological inovations, kids are still be educated with 1800’s educational model. College degrees are not worth going into debt for when employment cannot found upon graduation.

This post is for my fiance who is so struggling with his student loans!

Sallie Mae and he had an agreement to pay for his Student Loan with the option to Consolidate. Apparently they took away that option and demand ridiculous amounts to be paid each month which would literally drive our family of 3(my fiance , young daughter and I) into ruins. We are constantly harassed on a daily basis of greater than 8 times a day, even during weekends. He was told to get a second job (already has two jobs), they told him to quit one of the jobs and get a better paying one(For GOD SAKE IF IT WERE ONLY SO EASY), to ask friends and family for money and to take out another loan to pay off this loan which would eventually amount to another high debt loan. In this day with the way the economy is, and the fact that they already ruined his credit, He has no ability to get a loan from the bank let alone put money to the side for a house, a car (in case the old one dies on us) or emergency money in case the need should ever rise.

One ludicrous discussion he had with someone from there repetitiously informed us that he owes a certain amount for nearly an hour, to which he kept informing him, he simply does not have the money for that payment only to be once again asked, “How will you be paying for this tonight”? If these companies true intentions were to work with us (and not push us into default which would only add more interest and hidden fees onto our current debt) who are struggling why don’t they accept the payment we are ABLE to make? We are not looking for the easy way out, we are willing to pay something but not the amount asked for as our finances dont allow it! Why wont these predators see that as good faith on our end instead of threatening us to garnish our wages?Please tell me why do we pay taxes for the Govt to protect me and my family when they only protect the predators that wish to make us homeless? I love how they give money to Third World Countries and countries that have undergone war to re-establish a democratic way of life, yet they will let their own citizens who pay these taxes be eaten alive by the likes of every student loan lender. Where is our protection and our Justice?

He took out the loans in order to complete college and get a better job. He had some pitfalls in his life that prevented him to acquire the college degree he initially wanted and this left us with a hefty fine. The school he attended did not discourage him from continuing, knowing that he had difficult times.Actually at the time he took out his loan his income was barely 300$ as he was was a full-time student and could not work fulltime. Yet he was still able to take out such a loan, they must of known they were taking a risk on approving it? Homeowners who were given loans who werent creditworthy or had high enough paying jobs to repay the loan have the option to bankrupt. Why are we being treated diffrently? Why are we the only debtors being treated as slaves?As I see it we will be repaying this loan until the day we die, meaning no chance of ever buying a house ,new car etc.. BAILOUT THE STUDENT LOAN BORROWERS(I BELIEVE THE PERCENTAGE IS AT 30% NOW IN DEFAULT) WHO ARE IN TROUBLE AND WE WILL BE ABLE TO HELP BOOST THE ECONOMY.I’m starting to realize that Sallie Mae offered some form of compensation for the institutions in order to keep the blood money coming in.Please tell me there is some form of hope and you have an answer for me. I can’t believe this has been going on for so many years and I have yet to see a change in the laws that protect us.

Our sanity is on the verge of dissolution! Our consumer rights must be returned to us as this might be the only way to make these predators stop being so greedy which will eventually lead them to truly work with us on repaying a reasonable amount of our debt off.

I’m currently studying in a graduate program in Germany, and my experience there has really made me question a lot of how higher education is run in the US. Because just about all the schools there are state supported, tuition plus fees adds up to 600 euros/semester, and the support there for students is far beyond what we have back home. This is even true for foreign students, by the way.
I see this as a great social equalizer in many ways, because the tuition bill is such that if you take a year living with your parents and working in a crappy job, you can realistically save enough money in only a year to pay most if not all of your tuition for four years of college. In the US, no summer job, work-study program, or part time work you can do while in school can begin to make a dent in your tuition bill, but in Germany you could realistically cover the whole thing that way.

This means that in the US, students from wealthy families graduate unencumbered by loans, and students from less wealthy families hit the job market with debts the size of a mortgage (without a house) that they may be still dealing with at the point when their own children are heading to college.
I don’t think it is unreasonable for college students to be expected to pay their way to some extent and thereby take ownership of their education, but at the moment that is not a remote possibility.

While there have been many good points made both in the broadcast and on this post, few comments address the choices people make when taking on this amount of debt. Undoubtedly reform is needed, but painting with broad brushes because of poor consumer decisions is something that needs to be equally reformed. I’m as liberal as they come, but a lot of the gripes seem to fall into the “I didn’t know” and “nobody told me” categories. That apparently points to a lack of thought surrounding decisions to attend schools with an expensive cost of attendance, and then signing a promissory note without learning anything about the debt being assumed. Until reforms are made, a little responsibility needs to be taken to learn about the process and products people are consuming, rather than “borrowing first and blaming later”. And for the record, the financial aid office at my school was an invaluable resource in gaining information about this issue- I recommend at least visiting them and asking questions before borrowing more than you can afford.

College loans must be adjusted to reflect current lending practices for most other loans. At a minimum, we should be able to refinance these loans at a lower interest rate. What a discouraging scam!

We are told that efficiencies and lower cost can be achieved through technology. I have a child in a state university and see no effort to reduce costs especially with online classes.

Robin Bugbee, how wrong you are. You can’t become a school teacher without going to grad school, in fact in most school systems you have five years to get your masters after your hired as a teacher if you do not have a graduate degree. You will be fired if you don’t get your masters. Also all teachers are required to keep taking classes to move up the pay scale and to get tenure.

To say things like if you can’t afford it to bad is not an answer to this problem. Ever seen the film October Sky?
If not you should, this is why everyone who can get into college should be able to go and we as country should figure out a way to make it happen.

It’s absurd that borrowing 20k can balloon into six figures, this system is corrupt and like our health care market it’s broken.

On the other hand when your community crime rate starts to sky rocket I’m sue you will be the first one to complain failing to see the link between the lack of higher education and crime.

‘…a lot of the gripes seem to fall into the “I didn’t know” and “nobody told me” categories’ but doesn’t that work for the big-shots?!??!

Thanks Tom for covering this topic.

A commenter, Emily, just made reference to Germany, which truly has free education for its students.

When I was in undergrad. college I met a young German man who was getting his Masters here in the US on a Fulbright. He had received SEVEN years of free education in Germany, and then came here to receive two more years of graduate study (he already had one grad. degree) in the US. He returned to Germany with NINE years of education… and not one penny in debt.

Richard Levin, the president of Yale, has spoken about Yale’s being a “global university.” But many of it’s professional (i.e.: graduate) programs are woefully underfunded, despite a 17 Billion dollar endowment.

A question: how will Yale’s “best and brightest” fairly compete against their international competition who are unencumbered by debt?

There’s a double standard here: the Ivy Leagues, in soliciting money for their endowments, pay lip service to the need for increased funding for their students. But just visit the Need Access website, which processes loans for many elite schools, and they’ll tell you that loans are an “investment in your future.”

I can concur with everyone who struggles every month to meet their student loan debt; I work about 95+ hours per week to make it by every month… it’s insane! I have a B.A. and I’m currently utilizing it at both my jobs.

Private loans are horrible. If you must take out loans try to secure loans from the federal government. Stay away from SallieMae and other private lenders if you can.

Pretty scary subject. I have children going to college in a few years and am very concerned about the debt we and our children will incur. I came to the US from France at a young age. I attended undergraduate city colleges and a private graduate school (worked my way through all of them) while my American wife went to private school. She believes the children should get the best education possible for their individual situation (academic standing). I sort of agree but also believe that we should not put ourselves (parents) in such debt such that it will cause enormous stress down the road, especially as we go to retire. I know that as educated parents we’ll do the “right thing”, but figuring out what that is seems very onerous and overwhelming in this day and age.

In general, I believe the government has the responsibility and the right to regulate industries. These institutions (education, credit card, housing, business, etc.), however you want to look at them, are businesses and therefore motivated by profit (greed?). I think that paying our fair share of taxes to have a system which provides the regulatory environment is just. If someone did the math, we might find that it is less expensive to fund regulation long term compared to the costs of “fixing” all these problems. This is a relatively young country that has accomplished some wonderful things in its brief history but it is no longer the wild west that some folks would like it to be once again. By the people, for the people, …

Given what has been happening in the US and across the world these days, we should all be mad as hell and saying we will not take it anymore. There are too many folks who have cheated for too long and gotten away with it. It needs to stop and the system needs to be fixed. Less government is a justifiable goal, but not no government.

- roger

To the commenters criticizing people who borrowed too much, or complain that “no one told me”, please recognize the environment in which college-bound high school students are making these decisions. Perhaps parents, high schools, colleges, and college counselors need to seriously re-think how they present the whole issue. Students are told for years about the value and necessity of college education, and they’re made to understand from early on that student loans are a fact of life. There’s a lot of pressure to get into and attend big-name schools; and of course it isn’t possible for every student to be “above average”. There are many, many more average students than exceptional ones who get lots of merit-based grants, and there are many, many more students whose parents can only pay a fraction of the tuition at even a state institution than there are students whose parents can pay the whole bill with no help. But of course average students from average families are still need and deserve higher education, and they’re led to believe that loans are their only option.
So when the time comes to sign up for student loans, they take what they’re offered. Maybe they’ve been accepted at two or three schools, and they have to borrow $10-15k per year depending on which school they choose. Yes, people should borrow responsibly, but the 18-year-olds in question have been led to believe that this is normal, everyone does it, and in any case they have no choice.
Not to mention that a high school senior heading into college has no concept of what a manageable loan burden will be. They don’t know what their job prospects will be four years out; depending on their field, they may be still six or eight years from the regular job market. They have never had to pay rent and buy food; don’t know where they’re going to live or what the cost of living will be; don’t know what their income will be; so how can they have any concept of what a “manageable loan burden” will be in 15 years when they are still making payments?
Blaming the borrowers without looking at the rest of the equation is ducking the issue.

We, the people must push for passing new bankruptcy and consumer protection legislation. The bankruptcy laws of 2005 eliminated nearly all protections we had until then.

when did the bankruptcy law go into affect? does anyone know.

It took a U.S. senator’s help when my $4,000 loan the first year of college suddenly was reported as $400,000 and I could not get a human voice on any of the phone numbers listed for help.

To Theresa:

the latest bankruptcy laws went into effect in 2005. See “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005″. The full text of the law can be found here:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_public_laws&docid=f:publ008.109

the link to the 2005 bankruptcy law I gave above might point to an incomplete document. Here is the pdf of the full 2005 law I found:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_public_laws&docid=f:publ008.109.pdf

By the way Vice President Joe Biden was a supporter of the 2005 bankruptcy law.

Why should your first concern before signing on the dotted line be: “Will I be able to declare bankruptcy?”

You should expect to pay back your loan.

Why should you expect to be able to refinance at a lower interest rate?

Being “locked-in” works both ways. If interest rates go up, you get to stay at your lower rate.

I graduated in the 1980s with $12k in Sallie-Mae GSL loans. I never had a problem with my them. I paid my loan back over 10 years, never missing a payment. I now have a credit rating of about 750.

What a generation of cry babies. I guess a sense of entitlement has developed since I graduated.

If anyone in our country believes this kind of asinine debt for our youth is needed and is going to advance our nation, its people and there educations I’d love to hear their argument. I went to a college that REQUIRED me to take three full semesters of general education requirements that had absolutely nothing to do with my major and nickel and dime’d me the whole way so I would get the chance to compete in our job market. Essentially, I feel as if I paid for a piece of paper that taught me nothing about my current career and likely any future career, although I will say I took several classes I did love and learned a lot from. I paid a “business” money for services that they determined, not me. They basically required me to take classes or “fillers” as they are referred to in television, I did not want to take, so the school could make more money and put me further into debt. If I had known then what I know now, I would have worked throughout those fours years and would be ahead of my peers, through hard work, intelligence and job training, I would have money in a savings account and no debt. If our society is going to keep on this path of requiring everyone to have a higher education to have a competitive chance in our job market we at least need regulated FIXED Interest rates and more grants or federal funding. On top of that, in a capitalist society a business like a college should at the least allow you, the customer, to waste your money in the way it sees fit, not the opposite. This will require people to be responsible for their own choices and actions, which apparently this country no longer believes in and everyone would be a lot better off. No more excuses and more personal responsibility are needed in every aspect of our great nation. I am a recent graduate with a BS from a New York State School. I’ve been out of college for over 2 years now and started paying back my student loans six months after I graduated. My total principle loan for my fours years of school was about $48,000. About half of those loans are federal subsidized loans through Citibank and the rest are private loans, three years through Sallie Mae, and my first year through Citibank, because the Federal loans I was lent didn’t even cover 25% of the total costs. Every year of college I had a job and paid for my ever accumulating interest only payment on the Federal loans and my first year private loan with Citibank. My last 3 years of school I chose Sallie Mae as my lender, so my parents would not have to co-sign my loans, but I couldn’t make enough money at my job to pay the interest on my private loans with Sallie Mae and my loans with Citibank. When I graduated Sallie Mae hit me with my 3% supplemental fee, which I expected, but I broke the bank paying it all off before they capitalized that amount. The interest I could not pay for in those three years came to about $4,500 from my $23,000 in principle, which Sallie Mae quickly capitalized, raising my principle balance to $27,500. In the two years since I began paying back my loans, I have paid out $12,000 in interest and $3,000 in principle for all of my loans. When I added this up I was quite astounded. My monthly payments to Sallie Mae are roughly $219 and I’ve paid $300 every month since I began repayment, with the extra money advancing my principle. After two years of 10.25% daily accrued interest rates that rose from about 5% when I originally signed for the loans, I’m still not back down to my original principle balance of $23,000. By my calculations and at my current payment levels, I will have paid a total of $110,000 for four years of college. Throughout this experience I’ve learned the public library is more valuable than any college, Sallie Mae is a corrupt and ridiculous corportaion of criminals, and for all the hard work and good grades you may be able to get in High School, don’t expect any money for it, even if it translates to college credits.

Why would anyone take out a loan to go to grad school? If you can’t get a Teaching or Research scholarship, you shouldn’t be going. This pretty much excludes everything outside of the hard sciences and engineering. Which is pretty much as it should be. Scholarships for Philosphy majors? I don’t think so.

Consider going to a community college for the basics for 2 years, and then transfer to a 4 year school. Or consider going into the trades. Or just go to the school of hard knocks and work your way up.

Try going back to school at age 55 after losing a career in aerospace as I did in the early ’90s. I took out student loans as my only option for gaining new skills and getting back into the workforce. It took me 4 years to find a job in my new career with pay to equal my old salary. Meanwhile, the loan payments never stopped, of course, even after an unrealistically short period of forbearance. I was only 6 years from retirement and trying to save money like crazy even while my loan payments were higher than the rent. As things stand today, I’ll be dead before this Helium balloon (otherwise known as a student loan and so-called because it does nothing but go higher and heigher) is paid off. And yes, it is all coming out of my Social Security check.

The real issue is the failure of America in providing a quality education that will compete with foreign companies. India is a leader when it comes to producing educated people whose degrees are akin to a high school diploma here.

India offers its people a free education beyond our equivalent high school level. With such a commitment to its people, how can we take issue with highly skilled jobs going oversees?

My daughter graduated from the University of Wisconsin with a total student debt of over $100,000. Her monthly repayment bill is $735.00 a month for 20 years. How can we as a society expect a young person to pay this much and support a car payment, rent, food, insurance (health and car) and put away money for retirement. It is unconscionable what we are doing to our young people.

As a retired teacher we didn’t have alot of disposable income to help her pay for college. When she was applying for aid, everyone was eager to give her loans but not grants. When you are 18 years of age you don’t realize how crippling this debt can be. Where is the outrage?? As a country we should hold our heads in shame!!

I’ve been listening to OnPoint every day for nearly six months and this was the first time i ever uttered a swear word directed at T.A. I was really taken aback by his suggestion that if students were having such a difficult time paying back student loans, maybe less students should be attending university or striving for post-graduate education. While I agree that most high-school and college graduates are unfortunately optimistic about their ability to pay back loans, the statement was so anti-populist, anti-democratic and frankly, incredibly elitist. There is absolutely no reason why someone similar to myself, raised in an uneducated home in a lower middle-class family in the middle of meth country, Oregon should not be afforded the opportunity to pursue the seemingly inborn desire for knowledge. I find it so startlingly ironic that T.A., who seems to advocate regularly for American Ingenuity when it comes to getting ourself out of the economic crisis or support an end to home foreclosures in an effort to extend the Bailout Bonanza to the middle and lower class, could make such an offensive suggestion. That’s right, people just shouldn’t pursue knowledge. Great plan, that is sure to make the individuals in our country poised to handle the changing world dynamics in the upcoming century. Or better yet, just educate the ridiculously wealthy, and the rest of us will go on unemployment or work bullshit jobs that we never knew we could do otherwise than.

My son and his wife were forced into bankruptcy because they both lost their jobs. I fully supported this move on their part. They knew full well that student loans could not be discharged in Bankruptcy and accepted that fact. They tried to work with the lenders; submitted all the necessary paperwork for forebearances and other options available to them.

Last year their tax refund and rebate were given to the holders of the Student Loans … over $3000. They had not received any correspondence from the lenders indicating that they were not in compliance with the agreements. To this date, we have not been able to have that money returned.

It was a horrible experience, they are living on ONE income for a family of three and this money was going to be used for winter heat bills that had built up over the worst winter in Wisconsin history. It boggles my mind that something this mean spirited can be done to people who are truly trying to do what is expected of them.

Mean spirited is the kindest thing that can be said.

I took out loans for my daughter which, like Mr. Collinge’s, were sent to default when I became unemployed. Despite my efforts to negotiate there was no mercy. I became employed and my wages were garnished, which I accepted. I figured they would at least stop harrassing me since they were getting paid. No! The most recent scam — the lenders have permission to up rates on collection costs, so they have added 24% fee. Collection costs? My employer sends payments on a regular basis, with no missed payments in over five years now. What collection costs are they suffering?

My loan, originally $36,000 is now still over $75,000 and with all the creative fees the only end will be when I die, because there is no way I can pay off this amount in my lifetime.

They collect my income tax refunds, too. Remember the Bush tax refunds and incentives? All were intercepted by the Student Loan office.

It is shameful that our government has taken away the normal protections and given these student loan sharks carte blanche.

This is complete and utter nonsense. I would love to see a fact check on what is being said here and on the program. I took out several student loans to cover my college education. I read everything that I was asked to sign, and when I had a question, I refused to sign until it was explained to me, if necessary to have it written out and SIGNED by the loan officer. The attitude of the guest and many of the comments here is the same of the people who took out home loan they couldn’t afford.

I even took a year off from school to build up my personal savings to ensure I could afford my education. I’m glad to say I have paid my loans off in 6 years. I don’t have a big screen TV, new car, or house but I was a responsible borrower and repaid my loans. I got a four year degree from a very highly recognized institution (MIT) and through prudent budgeting owe nothing to anyone at this point.

The author keeps contending that there student loans are not protected by ’standard consumer protection’ is nonsense. Truth in lending applies to student loans, credit card debt is also not able to be discharged in bankruptcy. His entire argument keeps coming back to being a shill for his website.

Americans need to take responsibility for their actions. Read what you sign, particularly when it comes to finances. You and you alone are responsible for what you’ve signed. If you don’t like it, walk away.

Much sympathy for everyone with student loans these days.
I graduated from college in the mid-90s with about $8000 in student loan debt. I was appalled at the *unrelenting incompetence* of my student loan servicer. It once took me 6 months and about 10 tries to get them to process a change of address (during which time I continued to send payments). I also sent double payments for years to pay it off faster and was told that I was in default for several months running–I eventually had to request every piece of paperwork the servicer had on my loan and sort out the insane payment credit system they were using myself, and before they started reporting me to the credit agencies! I figured out they weren’t crediting my payments to the right accounts. A complete nightmare. I complained to my college’s financial aid office (the loan was from the college but serviced by a bank, Fleet bank for awhile, then another bank), and then paid the loan off as fast as I could so I wouldn’t have to deal with those idiots more than necessary. The whole thing was a nightmare. My college actually apologized to me.

Neil Kinnock, the former British Labour Prime Minister used to say: “Don’t get mad, get even.”

But Americans have plenty to be mad about: this is the only developed nation in the world where people routinely go bankrupt because they get sick or aspire to higher education.

THIS DOES NOT HAPPEN IN CANADA AND EUROPE. Why? Because people there have decided that is is in the interests of society as a whole to have well-educated citizens who are not forced to start their working lives saddled with debt.

Who profits from our current system? The banks and money-lenders. The same institutions that we are currently subsidizing with billions of our tax dollars. Duh!

We need to lobby for federal grants instead of private loans, or at the very least low-interest loans subject to the same consumer protections that apply in other arenas. We need to harass our lawmakers, and make them hear the anger and despair so clear in many of the responses above.

We need to seek collective solutions to a shared problem – not suffer in isolation, trying to game an immoral and unjust system. So kudos to Alan Collinge for the wake-up call, and to On Point for giving his case airtime. The first part of getting even is becoming better informed, so let’s check out his website, http://www.studentloanjustice.org. The second part is getting organized.

Jane Whitehead, Lexington, Mass.

I would like to comment on something “Take Some Responsibility” posted.

You’re wrong! You most certainly can declare bankruptcy for credit card debt! It’s us students who wanted to make something of our future who are treated like criminals/slaves and will have this debt doubled and tripled and will end up repaying it until the day we die! It’s all nice that you were able to pay off your debt unfortunately you can’t speak for so many of us that have come across hardships along the way. Are you gonna tell me that those who are disable and can no longer work are at fault for defaulting?Maybe you are implying that they purposely made things turn out for the worse just to avoid paying off their debt? Some common sense would be nice instead of judgying us! No one wants to be harrassed and if we could have foreseen the hardships that laid ahead of us we wouldn’t had taken out the loan. Many of us want to make payments to our lenders but are unable to make the exact amount they request every month. It’s companies like SM and many other lenders who refuse to accept what we can pay and throw us from owner(collection agency/guarantee agancy)to owner like slaves. So for those who are quick to judge I truly hope none of your kids/loved ones..etc end up in the same boat we are, because only then will you understand the emotional distress we are going through.

It is pretty obvious that the student loan system is not working in this country. Just like the sub prime mortage system and the credit history system it is severly eroded by lack of regulation. These systems were created to provide opportunities for people to borrow a house or get an education but end up being abused greedy people who does not seem to have any morals.

Take Some Responsibility: Utter nonsense? I am an upper middle class well educated mature individual with extensive experience in legal affairs. Would you be so kind as to post your contact information so I can give you facts about what has happened to my son? If you would prefer, I can have my attorney and my accountant communicate with you as well.

I hope everyone will go to Alan’s site and to a site called “creditslips.org” and read everything under the “student loan” link, such as this: Student Loans: A Modern-day Form of Slavery?
posted by Debb Thorne

This past week, students in my Social Inequality course were asked to read and think about causes and consequences of various types of debt. Given the audience, it’s no surprise that student loans kept coming to the fore. Well over three-quarters of the students indicated that they would graduate with loans–many of them well over $20,000 owed on a Bachelor’s degree in the social sciences, majors that are vital for our society but not notorious for their high salaries. They described an increasingly common pickle–there was no way that they could have attended college without the loans, and they are frightened that they will not be able to repay them, but they knew that without the college degree, their futures were beyond bleak. To say they feel between a rock and a hard place would be an understatement…(you can read the rest of this is excellent post by Deb Thorne, Assistant Professor at
Ph.D.: Washington State University, 2001).

It seemed like T.A. didn’t understand that you don’t need to be in default to be “in trouble”…so many fees and bizarre amounts are tacked on to loans it would make the most brilliant accountant’s head spin. And if you lose your job, the loan grows and grows, just as many of the callers described. Did you know that many government agencies won’t hire someone with large student loan debt, even if the debts are in good standing, because he or she may be, according to the government, more likely to take bribes to pay off the debts? Good luck finding jobs, lower and middle class America…Toys R Us and Home Depot conduct credit checks on applicants last I checked. I think the current student loan/get your college degree! fiasco is a way to keep the wealthy wealthy and to keep the rest of us serving them. Set a Google Alert for the term “student loan” and you will see how predatory this industry is, makes the “payday” loan industry look sweet.

I am so grateful that someone has finally brought this problem to light. I used to work in higher education and often felt that something was not right with what I was observed. I sincerly hope that this program and Mr. Collinge’s book will bring about a change in this scam. Thank you again for the program.

The numbers people have been discussing here are SMALL compared to what most MDs and DDSs borrow to graduate. After devoting your 20s to a career in medicine, it is a tremendous insult how garnished your wages are FOR THE DURATION OF YOUR CAREER. Although devotion to the vocation is a lovely concept, if most young students understood that OVER HALF of their salary would go to student loans and taxes, (student loan payements and taxes take the equivalent of our entire wages from Jan thru August), many would turn to more financially rewarding careers. If we are going to have a productive talk about the cost of healthcare in this country, this issue needs to be resolved. My husband and I, both dentists, have discourage multiple young people considering medicine: most were enticed by promises of fiscal reward, a vestige of the cheaper tuition most older doctors experienced. But if you’re a yound small town doctor, your take-home likely isn’t much different than had you chosen a much easier path. Had we known that our purchasing power, coupled with the responsibilities, liabilities, and time comitment would be like this, we definitely would have taken different paths. We are not alone, so many of our friends in dentistry and medicine are shocked at their lack of spending money after all this work. I have to wonder what the long term effect on the quality of doctors available to us will be as young, talented, competitive students figure this out. Trade school and non-doctoral, technical positions will be a much more reasonable choice to people simply seeking out a resonable career and lifestyle. As patients, we will find more nurse practitioners and hygienists taking over work where the special education obtained from doctoral training isn’t just beneficial, but necessary for good quality healthcare.

I borrowed money for undergrad and grad school. I did so with careful consideration of the likelihood that I would be able to find a job that would allow me to set aside a sufficient amount so that I could repay my loan. I read my contract and asked an attorney to explain it to me. I adjusted my lifestyle to forego current consumption in favor of debt reduction.

People who get student loans they can’t pay back are just like people who bought houses with mortgages they couldn’t afford. Lucky for you the more frugal of us will “bailout” out your ignorance and inability to understand the contracts you sign in the end. We live by the rules, you break them and now we have to pay.

Our economy is dealing with problems created by the greedy and the lazy. You know who you are!

American system is rapacious! extortionate! racketeering! prostitution!

I went to Europe to study, as a foreign citizen for FREE. My family and I all had FREE health care including dental. We foreign citizens studying for free!

I think that U.S. state schools should be free as well. The tax dollars, we have plenty of them, should go to education. Aren’t we the richest country in the world?

This will also drive the cost of private schools down, as more and more students will want to go to FREE state schools.

Why does Harvard and MIT own all the real estate in Cambridge, Boston University — blocks and blocks of Boston. I mean real estate not for laboratories but residential, space they rent out!

Obama claims on his website that he aims to make “community colleges” free of charge! Why stop there? State universities should be FREE! the government already has OUR money.

And if you think that the current crisis was caused by sub-prime… it is a CREDIT crisis all together, including the credit taken out for education.

The congress, to help students in the 80’s offered sub.loans; the amount the tuition went up was proportionate to the amount offered.

It’s all a scam and as said by Alan Michael, the kick back the officials are getting from this are in hundreds of thousands.

The corporate financial players who got bailouts and bonuses on the taxpayer dole got rewarded for rigging the system, and they walk with their heads held high and money in their pockets. They are secure in the knowledge that even if the worst happened and they had to declare bankruptcy, they’d still get to keep that second yacht and third home.

Meanwhile, those with outrageously inflated loan amounts have to hide in shame, have wages garnished, forfeit SS retirement benefits and have their one and only home seized.

Can anyone remind me what is so great about this country? Yes, I’m serious. We don’t believe in equality or in justice. At some point, those values were cast aside and the message is clear: you only have value if you have financial worth. Everyone else is human garbage and treated accordingly. This society is just for rich people and those content to service them until death. And I don’t see any hope in that.

It is amazing that people think a seventeen year old can understand a loan document that requires an MBA and a Law Degree to even start to comprehend. I would love to see how many of you understand the fine print in your credit cards, student loans etc.

Do you honestly think it is fair to have a group of Lawyers and MBAs creating a legal framework to entrap seventeen year olds? So you are capable of understanding this stuff.

People don’t understand that a lot of technical schools ONLY exist to farm student loans. I worked in the industry and I apologize to anyone who was hurt by my actions. I’m sorry.

Comments to: What a generation of cry babies. I guess a sense of entitlement has developed since I graduated.

Posted by David, on February 25th, 2009 at 3:14 pm EST

AND: Americans need to take responsibility for their actions. Read what you sign, particularly when it comes to finances. You and you alone are responsible for what you’ve signed. If you don’t like it, walk away.

Posted by Take Some Responsibility, on February 25th, 2009 at 8:39 pm EST

I had the same attitude for decades…slamming those who I thought just “didn’t get it” on all fronts. That was before I ended up in divorce with my savings depleted, without a viable means of making a living…(and now a retirement account -due to the stock market dive -for all purposes gone). I borrowed to attend college. After graduation I felt confident about finding adequate work. It hasn’t happened. Besides a flooded market of college grads…employers want the most bang for thier buck. They are not interested in paying enough to support a generation of mounting college expense and graduates’ debt loads. In a desperate position, having to take a job paying $12.00 an hour (at least it offers health insurance…most employers want to hire 1099 to escape their tax liability)…I was forced to take a second look at my previous judgemental and egotistical attitude. I’m experiencing the student loan industry as insensative, inflexible and mean spirited. Although I make the payments my budget allows…(pretty bare at approximatey a take home of $1500.00 a month), interest on student loans is being capitalized and the bottom line is growing exponentially. It scares me to realize what a bad decision I made…and that I’ll be pursued to my grave. I’m definately in a much worse position than I was before I got a college education. Dreams are being smashed every day.
I suggest you step off your narrow path and take a broader view. If you have children (or plan to) this issue, if left unresolved, will be lurking at your doorstep in 15 to 20 years.

In today’s capitalistic, ultra competitive business world, most colleges are being run as if they are corporations out to make a dollar. Simultaneously, they are also run as any other huge, bureaucratic semi-governmental entities. There’s a lot of fat to be trimmed and the outrageous amount of money spent to prop up their bureaucracies is almost maddening.

For example, after the tragic VA Tech shooting, almost every school invested tens, or hundreds of thousands of dollars to implement an invasive student alert system that is mandatory to participate in and tested with an annoying frequency. Security personnel are given top of the line police cruisers and are hired in greater numbers than a normal police force – and are paid more to boot! On top of that, normal police are routinely called in to help out with special events, blue “rape boxes” are found across every campus, and it is almost impossible to have a guest spend the night in some dormitories. Every school takes extensive, and expensive, measures to ensure they are not the next institution in the news – which will hurt admissions numbers.

In response to a common argument, most people with college degrees are rarely employed in a manner that utilizes their degree major. This is generally true with non-technical majors, but most employers do not care what your degree is in, just that you have it. It’s more than a check in the box, it demonstrates one’s ability to commit to something and see it through to the end, as well as the ability to learn at an advanced level. Chances are, whatever one learns in college is employed completely differently at each company in the field and most of the things are going to have to be learned on the job.

I noticed a lot of posters commenting that education should be free. Europe (Germany) was cited as an example, along with Canada. Mention was made of the free health care provided as well. Grants versus student loans is consistantly brought up.

There is another side to that – the taxes that no one in America seems to want to pay. There is no free lunch, someone, somewhere pays the bill in the end.

2008 German income tax for income between 52,153-250,000 Euro (~66,000 – ~320,000 USD) is 42%. The solidarity surcharge (an additional income tax) is 15% on top of that. This is in addition to the Value Added Tax that applies to goods and services supplied by a business (equivalent to US state sales tax but on a federal level.) This is typically 19%.

Canada is a little more complicated, but works out about the same once you do currency conversion. If you want to be bothered its at (http://www.cra-arc.gc.ca/tx/ndvdls/fq/2008_rt-eng.html)

So if you’re willing to pay that level of income tax up from your typical 28% federal tax bracket, 5-6% state income tax, and your 4-7% sales tax, by all means PLEASE lobby Congress to that effect. This means no tax cuts similar to what the previous US Administration passed, and the guarantee stated by the current US administration that taxes will not increase unless you make more that 250,000 USD/year.

So there is a clear choice – either turn over more of your money for the government to manage and get those benefits that several posters are advocating for (‘free’ health care and education), or manage your own money.

Personally I advocate smaller government, but that’s my personal philosophy. It’s a representative government folks, if you believe in free education and health care, call your Congressperson and Senators and demand they raise your taxes in exchange for these new benefits.

[...] [...]

I would gladly pay higher taxes if it meant that I could get decent health care, that my daughter could get a good college education without both of us going into debt with companies who act like loan sharks.

The question is what kind of society do we want? What is good for the collective whole of communities.?

It seems to me that conservatives and libertarians think small government is better. Take a look at what that philosophy has done to our country. The last 8 years were the result. Do you like what you see?

I was born in India, have lived and worked in Ireland and now residing in the USA.

I have no problems paying higher taxes (e.g. Ireland, 20% flat and then next tier is 42% flat along with 21% VAT on any goods purchased) if I can get 1. Decent Healthcare which can be topped ip with a Private Health insurance of my choice 2. College Education for my kids 3. A welfare (or a safety net) in case something went wrong.

The US system assumes that all will be fine, every one will be in the pink of their health and all will be able to get a decent job after their college, which if worked well is grand or else you are DOOMED!!

This is ok, if you fall in the upper class family (ie making more than a million a year) or else no matter how hard you slog, its almost impossible to lead a quality life with quality time with your friends and family.

Once again, Tom thanks a lot for bringing this discussion up!

God Bless NPR,
God Bless America

Speaking as a lower-income college student, I can say without a doubt that the grants I received from both state and federal government was not enough to cover the costs of my education. Having been an arts major (that also did not graduate), I learned no easily marketable skills at college that would help me cope with the debt I was saddled with after I left college.

Here’s what I think needs to happen. College tuition increases are now well beyond the rate of inflation. Colleges must be forced to stop increasing their tuition rates beyond the inflation rate, and the government needs to provide more grants not only for lower-income students but also for middle-class students whose parents either cannot or will not pay for them to attend college. Also, the interest rate on governmental loans should be drastically decreased.

If the government expects its populace to be well-educated, they need to start putting their feet forward to make it attainable and well worth the effort of going to college.

Why is Tom so incredulous that powerful lenders with heavy influence in government are not “accidentally” making a lot of money off student loans. He makes it sound like some crazy conspiracy theory, rather than a pretty obvious fact of life.

As someone who spent their twenties and early thirties paying off mine, I found that VERY annoying.

Oh, and I live in Canada, so whoever called in and used us as an example, please don’t. We’re not Finland. Unfortunately .

I suggest that Tom read “Generation Debt” or…just talk to some people under 35. Between inflated housing costs and tuition fees, we’re underwater before our boat has even left the dock.

President Obama said in his speech the other night that young people have a civic duty, to themselves and to the nation, to be educated.

Ok, that’s a good message. It’s logical and intuitive.

He forgot to mention how education actually benefits the banks most of all, some of whom are now getting endless infusions of money at taxpayer expense while they continue to gouge their customers. And the proposed limited tax benefit increase for education expenses kicks in only after one has already paid out those expenses. So you still have to have the money in hand up front.

The whole system is rigged to hobble middle-class and poor students, so it was disappointing to hear Obama tout that system as if it was lofty and progressive.

If education is such a priority, I challenge the administration to unhitch it from the predatory lending industry and make higher ed tuition free for all Americans attending state colleges and universities.

I’m frankly annoyed that there are no fixed rate private student loan consolidation loans available. I have been faithfully paying my private law school loans for over five years, even when I barely made any money out of school. Despite my payments, the balances have only INCREASED because the rates are all variable; when I graduated in 2003 the rates were 4.5 – 5.3%, just before the market tanked they were at 8.6% – 9.3%.

Also, the lender bills them in any way that it is impossible to make advance payments. All three loans are billed on the same statement. If I send in extra money, they move my next payment back a month. I once sent in $4300 to pay off the bar exam portion of the loan, following their special instructions about where to send it, and proper notations on the check, and the comany applied it in such a way that it made only $300 difference in the balance.

Fixed rate private loan consolidations would solve the problems with the increasing balance and interest calculations. Of course, no bank offers this type of loan. So despite my payment history and excellent credit rating, I’m stuck making perpetual $800/mo payments while seeing no progress.

And of course, the Bush administration stripped all consumer protections from student loans. So I still have to worry that if I fall ill, have a prolonged bout of unemployment or have some other tragedy, my lender can assess 30% of the ORIGINAL principal amount as a penalty, increase my interest rate to 18% and there is no hope of bankruptcy or other recourse.

I am frustrated that with all this talk of bailout and stimulating the economy, neither the president nor congress has made any mention of student loan reform. If the goal is to in fact stimulate the economy, and President Obama actually encouraged Americans to pursue higher education in yesterday’s speech, what better way than helping middle class folks who went out and got college educations to free up a bit more income (since we’re giving more to those on public assistance). I know that so long as I have to continue to pay more than $800/mo on my loans, I won’t be able to do more than bare bones living; save for a house, go on vacations, eat out, or do a lot of other activities that would stimulate the economy.

Also, although I am fortunate enough to have a job, I know that there are tens of thousands of people who are falling behind on their student loans. And unless those people are helped, they will be so innundated with paying the assessed penalties and fees for the next several decades, at the peril of the economy.

Lenders, Congress and the U.S. Dept. of Education all colluded to create this situation. Most of the money that the U.S. government spent on “higher education”,in fact went to lenders and guarantee agencies. In 1994 the Direct Loan Program was created with the idea that it would take over educational loans. Loans are processed by university financial aid office with the funds coming directly from the Treasury with no “lender” is involved. Schools choose to join either the Direct Loan Program or the Ffelp (lender based) program.

As soon as the Direct Loan program was created, the lending industry began lobbying congress with the intent of destroying Direct Lending. The Dept. of Education ignored blatant abuses by predatory lenders. The schools that belong to the Direct Loan program were rendered voiceless by the National, Regional, and State Financial Aid Associations. Those organizations were in bed with the lenders. And, worst of all,congress followed the dictates of the lobbyists in setting the terms of student loans. Lenders always insisted that Direct Loans had to charge the same as FFelp or be kept at a disadvantage compared to Ffelp. All the time, lenders were receiving large subsidies. OFM reported that the Ffelp program cost 10 times as much as the Direct Loan Program and with the latest interest increase actually made a profit (without subsidies). Congress, particularly Boehmer just discredited the Report, said it couldn’t be true.

IT IS TIME FOR A SOLUTION…AND IT IS VERY EASY: Immediately move all student lending to the William D. Ford Direct Loan Program. Congress can change the terms and should do so immediately. Student loans should go back to a 2% interest rate and parent loans should go to 4% interest rate…if a parent is denied a loan then the student should be able to take out the same amount the parent was offered at the student loan rate. This move would eliminate the need for the VERY EXPENSIVE private student loan (the most predatory group). In addition, the Federal Direct Loan Program should allow all students who are repaying federal student loans to refinance with a Federal Direct Consolidation loan ….which would accomplish two things, relief for the borrower and liquidity for lenders….let them go back to lending money to small businesses…just get out of the student loan business.

Also, with student loans @ 2% interest rate Congress would be telling the American people “We want you to go to school and we are going to help you with this very reasonable loan” low interest loans along with the Pell Grant and State Grants would make education a reachable goal for most people.

At our school the average federal debt of a graduate is approximately $17,000. But, there are always some students who want to take out the maximum amount. And some students (and their parents) are conned by the TV advertisements ($40,000 per student per year without certification from the school at 19% or more). Private lenders are giving that kind of money to students who are 19 years old without a co-signer…you think maybe those lenders are expecting a bailout?

Amen Agnes. This should be done NOW. Not tow years from now.

I also think students need to be more aware as well.

Muse en Lystrala comes to mind, she claims she was an Arts Major, who did not graduate and then states: “I learned no easily marketable skills at college that would help me cope with the debt I was saddled with after I left college.” Excuse me? You made the choice to get this kind of degree, did you not? You could have taken a business course as an elective. Blaming institutions for your bad decisions does not help your argument. Case in point, I support low interest no frills loans for students. However I think you the student should also do a little research and at least try to make some educated choices.

I teach college and I think about 70% of the students are completely clueless as to what going to college means. They are not prepared, have almost zero organizational skills. Hardly anyone takes notes, even when I ask them to. I hand out detailed assignments that are not read and get back homework that is not done correctly as a result of them not following the instructions.

A week ago I was helping a student in class when I noticed she was text messaging as I was talking to her! I could go on, but it’s amazing how some of these students are just so clueless. Then there are the other 30% some of whom are brilliant; the A and B students, who not surprising are the few how I here are getting jobs.

My sister-in-law just graduated with 100K in debt and she’s now qualified to get a job as an entry-level administrative assistant (if she can find a job in this market). How will she ever pay it off?

I graduated with a Master’s degree in a healthcare field with $60K in student loans. I was told by my finanancial aid person at school that I “had” to consolidate. She gave me no choice in the matter and did not explain anything to me–just told me I had to do it and sign these forms. Sure, I was stupid for not looking into it more, but you think these people are there to help you wade through all the complicated stuff. Now nine years later I still owe $53K even though I’ve been paying an astounding amount of money every month. And I’m stuck–even when student loan rates went down to 1% a few years ago, I was not allowed to refinance. I’m seriously pissed.

I used to “labor in the vineyard” as one of my colleagues called it and, Jeff, when I complained to him about my students, my colleague said, “That’s why you were hired–teach them.” Ignorance is not an excuse for anything, but unfortunately it’s available to all of us. To wit:

‘Wiesel, who survived Nazi Germany’s concentration camps in World War II and won the Nobel Peace Prize in 1986, said he was introduced to Madoff through a friend. He said the unidentified friend lost $50 million in the purported fraud. The 80-year-old Wiesel, was on a panel with former Securities and Exchange Commission chairman Harvey Pitt, who addressed some of the criticism of the SEC for not catching the purported fraud, saying the regulator “got the wrong conclusion. At a minimum it looks like human failure.”‘

Lisa I don’t know what state your in but in Massachusetts if you sign any legal document under duress it’s not legally binding. What your financial aid person (you had a typo) is not only committing fraud by lying they are a good example of why this system is broken. Never, never sign anything when someone says you have to. If they wont let you take it away for review, don’t sign.

teg are you suggesting that I’m wrong. This kind of attitude is amazing to me. Blame me for the students shortcomings. By the way I spend the entire class time at the beginning of each semester going over all of these issues. I offer them help and am willing to meet with them in office hours. No one ever turns up. I ask if they understand the assignment after I explain it in detail. I then tell them to e-mail me if they have any questions. I may get one e-mail out of 40 students once in a semester. What do you suggest? That I do the work for them? They need to grow up, as you do as well by the way. Stop blaming everyone for your problems and short comings. Take ownership, learn to think critically, take notes! Ask questions! Make an effort.

College is bullsh-t. Just read the books, and then do your own thang. Selah.

Just read books and do your own thing…
What if you can’t think critically, what if you do not comprehend what your reading?

One problem of course is it’s very hard to get a job without one. Of course some people should not go to college and should maybe become plumbers, which is not a bad thing as there is a shortage of decent plumbers.

If a person can’t think critically by college, then they shouldn’t be in there. … Plumbers are usually happy people.

Pardon: then he shouldn’t be in there.

I heard the show and it was extremely informative. I am currently a student loan recipient and I did not realize the dangers that lurk ahead. I am going to get started now looking into what the process will be when I graduate and try to get myself ready to tackle the situation. I don’t plan on defaulting of course. However, I do need to read my loan agreements and become more knowledgeable about this issue.

Thanks for getting the word out there.

“If a person can’t think critically by college, then they shouldn’t be in there. … Plumbers are usually happy people.”

I agree, unfortunately they don’t teach critical thinking in most high schools. My daughter took Latin in high school and I asked her why, as I thought she should have taken Spanish. She said it will help me to think and solve problems. She was not a straight A student, but she did well enough to get into a good university. Lucky for us, her Mother works there and her tuition is free. However I am still borrowing money to help pay for expenses, dorm room and meal plans, books (why are text books so expensive?)

Jeff, I don’t know, man–I’m just saying. Aren’t there other profs you work with that you could share a cup of joe and commiserate? I remember I was pretty dopey when I was a college student. My profs were patient with me, sort of.

I’m very patient. This is topic believe me, the issue is some are coming out high school with little or no skills.
I had a student through homework across the room the other day because they were upset with the grade. What kind of behavior is that? I had to take this baby outside of my class to explain that you can’t act like that in my class.

On the other hand I have one ex-student who just landed himself a great job with a very good film production company. In case your wondering he was a straight A student.

This is in response to “Take Some Responsibility.” How nice that you were able to pay your student loans off in 6 years. Why don’t you tell us the rest of the story. I bet you graduated soon after 9/11 when rates on student loans dropped to a low as 1% for a few years (between the approximate years of 2001 and 2005) If the rest of us had been able to take advantage of those interest rates, we would have paid ours off by now too, you idiot. By the way, I hope you are not kidding yourself into believing that the low interest rate you scored was a product of your careful choice, or otherwise somehow within your control. It was pure luck, nothing more, nothing less. As an attorney I assure you that Truth in Lending protections do not apply to student loan debt and that credit card debt is 100% dischargeable in bankruptcy. You are not only ignorant: You are a jerk.

The rate on my guaranteed student loans is “fixed” at 8.25%. Unfortunately, a “fixed” rate on student loans is not only “fixed”, it cannot be re-financed at a lower rate. Funny, if 8.25% had been the rate on a home loan, it would have been deemed sub-prime.

Bravo for covering this topic. I too have been a victim of predatory student loan lenders. What started out as two loans totaling $31,000, has spiraled into an astronomical $48,000.

While the government is busy BAILING OUT the big banks and Wall Street, the ordinary decent citizen is AGAIN being left in the dust!

There’s NO EXCUSE for this! People should NOT have to sell their souls for a decent education!

I agree that that paying for higher education is extremely in need of something different. I am 26 and a recent college grad and while I was fortunate to have no student debt due to supportive parents I am surrounding by people my age over their heads in debt. 30, 50, 80 k for bachelor’s degrees is not uncommon and many of these people work at the same company as me so their debt didn’t help them get a job in their chosen field. Recently I had to counsel my straight A student cousin to not go to the college of his choice because it is a private university. I think a lot of colleges are luring young kids who think they’re doing the right thing too come to their schools but are really putting them on the road to major financial trouble.

There is some possible good news. The Obama budget is calling for the government to take over student loans.
We shall see if he can pull this off. I think the idea is to do away with this usury system of indentured servitude.

Education should be a right, if you can get into college, not a commodity like crude oil. Low interest loans of 2 to 3% and everyone should be able to renegotiate new terms as well. If you default through bankruptcy them it should be the same as any other kind of debt. It would also be good if for the first 3 years after college that you get a grace period if you can’t afford to pay due to a low paying job.

I graduated from college in 1985. I borrowed $5,800 my last year of college to graduate. My first year cost $1,900. My last year cost $10,000, 4 1/2 years I was in school. My loans were $3,800 in National Defense student loans which is a government loan, and the balance was a bank loan.

I have paid over $10,000 to the National Defense Student Loan on the $3,800 student loan and every year for 20 years they have taken my tax refund tax according to the IRS. According to the last NDSL statement which I get every year around tax time. I owe $3,600 on this same government student loan that was originated in 1984. My bank loans which were on the same payment schedule have been paid off for 20 year.

I think when I die I want to have my ashes scattered sent to the government student loan program as my final payment.

Alan has done yeoman work to get out the word on this debacle. Congress needs to change the law ASAP on this Bush inspired predatory lending which was brought about by private institutions lobbying a Republican controlled Congress. Their idea was to turn the American middle class into a bunch of indebted servants with student loan, mortgage, auto loan and credit card debt that would be payable to the wealthy investor class for the rest of their lives. This system has started to fall apart because people can just walk away from mortgage debt without even going into bankruptcy. However, they can’t just walk away from student loan debt even with bankruptcy. The current economic crisis is largely due to American citizens rebelling against debt based, unfettered capitalism. Let’s hope the student loan fiasco will be resolved soon by a Democratic controlled Congress and Presidency who have so much on their plate already to try and undo 28 years of Reaganomics.

Kane your comments do not make any sense.
How is that you borrowed $17700 and it took you 20 years to pay it off.

Your leaving something out of this story. If you borrowed $3800, which was the principle, what was the interest?
It seems to me it was about 8.5% or so to get a total of $10,000. Something is not adding up here.

I borrowed about this amount and finished school in mid 90’s and I only have $8000 left to pay. Granted I payed down some large chunks a few times when I had the extra cash, but it seems strange that you are still paying this of 24 years later.

well I didn’t consolidate I set sent in second check every months folded up in a note saying which of my 5 Salli mea account it was to go to. this worked fine un till the final payment. when it was always a problem and a few phone calls a extra week and usually a 5 dollar check to get a account closed. because of the collage loans I have never bought a new car or house or contributed to the economy in a big way. I now live in Europe, because when I have kids US collage is unobtainable now. I have a bachelors from U Hartford and Masters from RIT.

I have also taught in collages where my departments income was 8 million and our costs were 500k
just one class one semester would pay off my yearly salary.

My brother took out 4k in loans for grad school. He is now mentally ill and they are hounding him for 30 thousand dollars.

How did 4K turn into 30k?

the real scammers here are the students who took out huge loans
and not paying back. the victims are the lenders lending the money

These whinning students who are in debt should get a part time job
while they are studying, study locally so they can live at home to save on rent and food and don’t go into useless pie in the sky fields.

I would like to know what Alan Michael Collinge was studying.
Did he do all the above? If no, stop asking for a free lunch from
taxpayers

This is a great story. Should be required listening for parents before their kids even apply to college.

I think the whiners about the high cost of college tuition should cut it out (see my article in the Denver Post here: http://www.denverpost.com/search/ci_9134933 ). As other commenters have pointed out, the high cost of tuition is easily explained in economic terms.

Everyone wants a scapegoat. But as Pogo might have said a half-century ago, “we have met the scapegoat, and he is us.”

Caveat emptor, folks. Thanks to people like Mr. Collinge, at least we’re getting better information about how the financial aid system works (or doesn’t work). And knowledge is power–the power to make better educational decisions for ourselves and our children.

Good article Mark and I have to admit I left out all the perks that colleges are now investing in. Million dollar gyms and food courts and so on.

I still think however that student loans should be kept low as possible and that all the hidden BS should be stripped out.

There used to be a grace period of six months to a year after you left school, this is not a bad idea. I would also offer incentives for students who want to pay right away.

Now you have students paying while they are in school.
For those who say get a part time job, a lot of students are working over 30 hours a week and they still are not able to make it.

After spending thirty seven years as a college financial aid administrator and the past three years providing voluntary financial aid services, I read all of these comments regarding the student loan issue with mixed reactions.

However, they generally reflect the same core problems that are the underlying issues we face with home mortgage defaults, unmanageable credit card debt, risky investments and other forms of crippling financial life style decisions. The inability or unwillingness of a large portion of the American public to understand how to live within their financial means or to exercise the most fundamental practices of money management are at the core of our national financial crisis.

We can all rightfully blame politicians, bankers, mortgage lenders, stock brokers, car salesmen, money managers, college representatives and many others who encourage or misrepresent unrealistic life style expectations, but ultimately we all have the responsibility and accountability for our decisions on how we manage our resources.

There are many very affordable, high quality college opportunities in America. Not everyone can afford or needs to attend a high priced “selective” private college or the “flagship” public university to obtain a quality education. These affordable alternatives may be hard for many to accept for social and life style expectations, but they will assure a brighter financial future for most.

[...] you have 50 minutes to spare, let me recommend that you give a listen to this interview with Alan Michael Collinge, author of The Student Loan Scam: The Most Oppressive Debt in U.S. History — and How We Can [...]

I was allowed to borrow over $140k all before I was 22. The money was for student loans. Now I am a graduate but cannot afford the min.payment of $1k my lender wants. The next option for me is default. I was forced into bankruptcy just to eliminate all of my other debt. $90,000 in private student loans were not allowed to be part of that bankruptcy. Will Congress wake up and remove the bankruptcy protections to private student loans? The laws enacted in 2005 are unconstitutional.

Student loans are the ONLY loans in our nation’s history to be specifically exempted from bankruptcy protections, truth in lending requirements, statutes of limitations, statue usury laws, and even fair debt collection practices thus creating a state of peonage in a country that claims it is fair to everyone, and everyone is free. Sallie Mae used predatory lending techniques to lure me into over $140k in debt.

Please restore basic consumer protections to student loans!

“I bet you graduated soon after 9/11 when rates on student loans dropped to a low as 1% for a few years (between the approximate years of 2001 and 2005) If the rest of us had been able to take advantage of those interest rates, we would have paid ours off by now too, you idiot.
….
You are not only ignorant: You are a jerk.”

Posted by Eliza, on February 27th, 2009 at 4:21 pm EST

Eliza:

For clarification: My consolidated rate was 5.6%. You knew what your rates were when you took out your loans for your JD. All I’m arguing for is people taking personal responsibility for what they sign for.

With regards to bankruptcy discharging debts – you can (try to) reclaim items bought on credit, you can force the sale of homes (in some states) during bankruptcy. Until they can take your degree and put it up for sale, I see no reason to discharge student loan debt except in extraordinary situations.

PS.

I thought comments for On Point were supposed to be civil.

I owe $111,000 on $42,000 of loans. I am so upset over how these student loans have taken over my life–I am a mess emotionally, financially and physically! I feel I will have to leave my partner and have contemplated suicide! There is noone out there to help me. Yes, I was responsible for taking the loans out but never in my life was prepared to pay so much of my income toward it! They have tapped my wages and I have since been in rehabilitation. Now, is the economic crisis I’m informed there may be noone to back my loan consolidation and all the new interest would be compounded to the principal and on and on it goes! Then after 25 years they may be discharged but then one has to pay a huge tax on the discharged portion as income.

I would NEVER EVER suggest anyone to take out a student loan unless they were in engineering, law, or medical school. The administrator of my loans, Pioneer Credit Recovery, are less than sympathetic and my first attempt to rehab my loans I was told I would be garnished ($300) AND had to pay $1,200 a month to get into the program. I gross only $2,000 per month! How are they allowed to do this!

If I could, I would turn back time and never ever have gone to college! I was 17 and optimistic back then and now consider suicide as my only relief and peace from this.

And to all of you folks that tell us hurting to suck it up! YOU BE VERY VERY CAREFUL WHO AND HOW YOU JUDGE SOMEONE!

That evil karma may come back to haunt you! I don’t wish it because I would NEVER ever wish anyone to feel as badly as I do!

I, and others, are good people and do NOT deserve to be treated like this. Not in our own country!

I’d also like to mention this little thing called student loan farming. It’s when you get a fradulant trade school like the one i attended that leaves you 65,000 dollars in debt and then one day decides it’s not in there best interest to teach you anymore. Then kicks you out and claims you didn’t graduate and doesn’t have to refund you the 20,000 dollars worth of tuition that they still owe me. Ya explain were i went wrong. Now there might go bankrupt. At least you got degrees. I have nothing but debt. I’m currently going back to college right now. A REAL ONE. This time for engineering or accouting… somthing fool proof. At least i guess i still have time to make it right. However I’m still paying 850 a month and trying to go to college while fully supporting myself. I was 19 when they stole my life. Whats funny is I only knew of the school because they came to my high school essentially recruiting people. I’m pulling every resource i have to make it work. If all else fails i’ll go ahead and live as an illegal immigrant somewhere, its almost better then being the indentured servent i am here. I can’t believe the goverment knows this kind of thing happens and completely turns a blind eye to it all.

Oh PS the schools named NPA (National Pilot Academy) Don’t be fooled they take everything they can get their hands on. They demand you pay them all tuition up front and its not cheap! Thats when they have you by the cohones.

I am in the same situation as many of you are. Consolidated my loans with Sallie Mae in 1995 for 20,000.00. Since then I have paid $25,000.00 and still owe $22,000.00. There were times when I was underemployed and deferred the loan. I never ran from them and have always made payments when I could. I have paid off many other loans in my lifetime, but I don’t think I will ever be able to pay this one off due to the balance never goes down. It only seems to go up despite not missing payments for the last 5 or 6 years. I am depressed over this. I will continue to make my monthly payments even though I feel that something very unfair is going on here. I have contacted my local congressman. I have received no response. I don’t think anything can be done. Please, someone help us out here. I am more than willing to pay my fair share of interest on this loan. However, do I deserve to have to pay $30,000.00 or more in interest. Doesn’t seem right to me. Thanks.

I too borrowed $16,000 in 1986 to attend graduate school. I worked part time and summers. I was a straight A student from a low income family. I had a scholarship which went in half from first year to the second year, while tuition went up. Even at that age I had no idea how much cost of living really was and thought at $15.00 an hour I could pay off those $750 a month minimum loan payments. The only job I found 3 months after graduating paid $10 an hour (in architecture) and it has taken 20 years to get up to $25 an hour; I still find it hard to pay the $400 a month the (4th consolidator) wants me to pay; of which $360 is for interest only. At first the loan was a low interest state loan but after I had periods of unemployment and/or illness, with several forbearances, I agreed to take a consolidation loan from Sallie Mae (interest went up). The $700 or so per month they wanted was never manageable and at a certain point I nearly defaulted so they sent it to the collection agency PCS who charged immense collection fees so I paid $695 a month for 9 months to get back in “good standing” and prevent wage garnishment, though this decreased my debt not a whit. Overall,(the way they work, see above) the original debt of $16,000 has increased to (today, the clock ticks) $43,000. At 49 I have never owned a home or a new car etc. There is no source in my life for “lumps of cash” to pay off “big chunks”.
If ignorance is no excuse, what about the credit card debtors and mortgage debtors who are forgiven via bankruptcy? Workers at my financial aid department back then hardly spoke English, let alone being able to help me with the legalese.
My only conclusion currently is that I have put it into another deferment allowing me to “pay what I can”; although it still incurs interest ( In 6 months it will be $44,000, even if I’m paying what I can afford which is $200-300/mo.) This will be the only way to prevent garnishment and day and night harrassment calls; no debt payoff is in sight, I’m just trying for day to day sanity. I’m not yet willing to go live “off the grid” in a trailer, or move out of western civilization. At some point I will probably have to. (vis a vis Social Security garnishments) I am glad this issue is coming out in the open and sounds like I am not the only one. I plan to write my congressmen.

Can we not bring this back before the supreme court?

With all this winning about student loans well one of sons who graduated out of college without an debt, did it by working at full time job for a year. He also went to a Junior College and got his degree there. Of course as a parent we help him with his books and of course his housing (at home). Its to bad that some folks here think that someone else owes them a living when in fact no body does! You are your own master and you are suppose to make your decision not the government or lenders.

I also have a son going to law school and he is in his second year and he also has kept a very low debt load by dealing cards for two years. And then of course he also went to a Junior College and then on to senior college. Junior colleges are the trick to not owning your life to the banks after graduation. But of course we brought our kids up with one thing in mind and that was to pay your bills oft as you go not to go out buy garbage on credit.

Back to our Law Student he was number two in his class last year and should be at that level this year also. He believes in school first and then social life second. As the grades you get in school will determine what jobs you might get after graduation. One proud dad!

“With all this winning about student loans well one of sons who graduated out of college without an debt, did it by working at full time job for a year. He also went to a Junior College and got his degree there. Of course as a parent we help him with his books and of course his housing (at home). Its to bad that some folks here think that someone else owes them a living when in fact no body does! You are your own master and you are suppose to make your decision not the government or lenders.” Posted by jipjob

Hmmm… is this even literate? Complete ignorance, your not even looking the big picture.WHY AM I EVEN PAYING TAXES…. SO THE GOVERMENT CAN TURN AROUND AND GIVE IT BACK TO THE BANKS THAT ARE ALREADY FUC*ING US! WHY DOES THE BANK AND THE GOVERMENT ALWAYS WIN. COME ON PEOPLE!

“And to all of you folks that tell us hurting to suck it up! YOU BE VERY VERY CAREFUL WHO AND HOW YOU JUDGE SOMEONE!

That evil karma may come back to haunt you! I don’t wish it because I would NEVER ever wish anyone to feel as badly as I do!

I, and others, are good people and do NOT deserve to be treated like this. Not in our own country!

Posted by Mark, on March 4th, 2009 at 3:49 pm EST”

TO MARK: SUCK IT UP

Not only are student loan borrowers and defaulters being abused by collectors FOR LIFE, they have to bailout these greedy bankers with their tax money. At this point, our government has gone way too far to hurt to middle class, and did so knowingly. Five years ago, my doctor felt that since he had to suffer and pay his student loans back over 30 years (though he was in the business of saving lives), everyone else should have to pay theirs too. I told him that attitude would lead to people no longer being able to go to college. Now he feels opposite and is ready to march on Washington. And this is after he finally paid the loans off. You might feel lucky today because you don’t owe or can afford it TODAY, but when your children and grandchildren can’t afford it, you’ll change your mind. My doctor won’t be able to pay his daughter’s college tuition in 10 years, at the rate tuition is rising. He certainly won’t be able to pay for her to become a doctor and does not want her to take out loans. If you can’t feel the pain of these new indentured servants now, you will later, when it is far too late. And don’t forget, the consumer protections were stripped retroactively. Even people who would never have taken out a loan without consumer protections were dupped because the protections were in their contracts. This is a wrong that must be made right. RIGHT NOW. Also, we need artists AND scientists so stop arguing about majors. These fields go hand-in-hand. Artists dream. Scientists make the dreams happen. Only Americans want to limit how people think.

Well, its odd that the government backed housing loans are able to foreclose or people can even go bankrupt and owe nothing. Why cant those with defaulted student loans have the right to file bankrupcy? Why do those with student loans who fall on hard times get a break? I think this should be taken to the supreme court once more. Bryon is extremely judgemental and in for some bad karma.

What about those owing student loans and are losing their jobs? Do they get a bailout break? Do their loans go on hold untill the economy picks back up. All this was created by big government spending yet they are taking absolutly no responsibilty. Average people trying to get an education so they can find a job are getting screwed.

I have earned my bachelor’s degree from a private institution and do not owe any money for it. However I do a big sum for Graduate studies which I did not get to complete. They have refused to release my undergraduate transcript as a result, even for employment. THIS WAS VERY DISTURBING!! I am unable to pursue with my master’s degree in an effort to further by professional/career goals. I pretty much held as hostage. I have gone back to college and earned an associate degree at a community college, paid cash. and plan to attent Cal state university. What’s even worse is that I owe over 100K in Gov. loans with Sallie Mae and when I was in school on 2003 Sallie Mae put one of the account into default and got a judgement against me. I went to the first court date because I had received notification– the judge did not grant judgement. However, they went back some time later and got a judgement against me== this time I did not receive any notification to appear in court and they were able to get a judgement against me. Now I am not able to purchase anything (by financing) due to judgement. I can never pay of the loan.
I am currently trying to have my institution release my undergraduate transcript so I can continue to work (part time teacher), but my attorney is draining me.. I never thought institution can hold our transcript, eventhough you paid for it and even for employement.
If I knew this I would never have attended a private institution, or borrow any money.. Lets face it… Only the rich can afford an education… you can pay off your debt.
Dwayne

Natasha I was in the same situation as you and could not get ANY student help…

My parents were divorced and mom did not make much money and dad did not believe in helping out… I moved out at 18 and took me extra years to graduate as I had to work and go to school both at the very low full time… working 40 hours a week to pay for food and housing and taking 12 hours of classes PLUS taking out loan.
I have currently been unemployed for almost a year and have had to get a deferment AGAIN in order to pay against the student loans. I am actually getting a 2nd degree now to go on to a masters and trying to get out of my non lucrative IT field… It has pretty much sucked for anybody starting out the last 5 years.
I should have just been a plumber would have made a lot more money. I am 28 now and just feel its impossible to get ahead.

With all these people coming out of college with student loans, this is bound to have a negative effect on entrepreneurialship, since students need a reliable, stable job to pay off the huge loans they have. This in turn slows overall economic growth. Corporate capitalists destroying small-business capitalism.

I am a current grad student with 100,000 of debt despite a scholarship and a work-study program.

I would never suggest that I should not have to pay back my loans! I chose the program and the school and I was aware of the costs.

I do, however, think that the current interest rates for federal student loans are truly ridiculous. I have excellent credit and I have credit cards and a car loan with interest rates that are significantly lower than my 6.8% and 8.5% student loans.

If home-owners with excellent credit can refinance at lower rates; students with excellent credit should be afforded this same opportunity.

I am age 55 and was encouraged twice to take student loans for salary promises that I never received back in 1992-1998. My original loan total in 1998 was ~$150,000 and I could never find the type of job with the salary that was promised for the degree. In 2001 salary cuts occurred 4 times, as well as cut backs in time to my job(s). Initially, while I was bringing home only $1500 Sallie Mae (Texas Guaranteed Student Loan Association) demanded $1200/ mo payments that I could not make and would they not accept less. I searched tiredly for work everywhere and could not get hired for the type of salary that would help me financially. In 2001 we started having more salary cutbacks at UCSD that made it worse for me and still I looked for better work. I was told repeatedly by Sallie Mae and the U.S. Department of Education that my only options were to take hardship deferments and forbearances, during which time interest would continue to add on monthly at the rate of $1200/mo. I had no other choice but to take the deferences. By 2007, my student loan debt increased to $240,000 and now it continues to grow at interest of $1380 each month. I have never been allowed to re-consolidate, refinance, put it into bankruptcy or pay less than the $1380. They returned my $600 checks to me repeatedly. They have increased the amount of the loan to $455,000 of repayment. They have increased loans that were to remain at zero and 4% to 8%
I have written to, emailed and telephoned Sallie Mae hundreds of times since 2002 without the ability to get through to anyone who can help me. They actually put me in a circle, talking to 3 people in India, who transferred me to a rep who would not say who he was or where he was located and would not give me someone to help renegotiate the loan.

I diligently looked for better paying work, went on numerous interviews and was often selected as the top 2 candidates, never receiving the offer and better salary that could have gone with the position since 1999. I have sent out over 500 applications since 2001 and been on numerous interviews in order to faithfully work and pay off my debt to no avail.

In 2007 I was laid off and have no savings, home, or help from anyone. I have contacted numerous other borrowers who like me are stuck excessive fees, changes in interest rates without notification and inaccurate accounting (inflated amounts due), with sky rocketing due amounts (none of us in default yet because we are locked into forbearances) from Sallie Mae; they cannot pay off and no one will help us. . . yet. The following gives you a picture of my situation more, and it is similar to others’.

Criminal Sallie Mae will garnish my wages as soon as I find work – which will only be take home of ~$1700/mo, leaving me only $1100 to live on. Rent alone is $1100.

As I mentioned above, in 2005 I contacted the U.S. Department of Education, Investigative Department. Besides telling me my only option was to take the forbearances, they said that all they could tell me was to find a lawyer – and that bankruptcies are not allowed for student loans. I looked for a lawyer and no lawyer would help me, 15 lawyers in 3 cities, including Stanford U lawyers said that they could not take the case because student loans cannot go into bankruptcy or hardship unless I am disabled, which I am not.

My salary was usually $1900 take home, for rent and medical bills. I finally got a short term job in late 2007 after my lay off, that gave me about $3000 month take home for several months, but I then was back to lay off status. I have been laid off now and unemployed for the last 9 months. The only job interviews (was not hired) I had if they chose to hire me, were only be willing to pay me something that would bring home only $1900/mo again, and the medical bills are still with me too and growing. I have no savings, no family. I now suffer from panic and anxiety attacks and my life as an elder looks very very bad.

I have contacted my senators including, Senator Feinstein, who never replies. I have contacted their offices with letters and requests for an appointment with them for years now. And you and no one in their offices has replied yet.

Is there a committee on this somewhere? Another senator? or someone that you can refer me too. Likewise my CA reps do not help after repeatedly letters and telephone calls. I never have received a call back or email from anyone. I would like to speak to congress too. I would be glad to send you my resume, proof of job searches, and anything that would help.

I always wanted to pay back my student loans and attempted to several times. Have not those of us, who wanted to better ourselves and good faith took loans to get the education that we were encouraged to do to better our life, been punished enough? The previous administration has locked us into something terrible. If I can ever begin paying my student loans ( I need to make $75,000 / yr in order to do so at least), when I am 85 I will still have an outstanding balance of $270,000 and no retirement money. When I am forced to retire from work, if I make it that long, at age 68, how will I care for myself? I have no pension – that was lost in the economic debacle. I have no retirement money or savings. Realistically, now at age 55, I will never make more than $2000/mo take home. There are no funds to retrain at an income level that I need to pay off the loans and support myself.

Please do something for those of us, and there are many, many of us, who were / are sucked in by Sallie Mae. I need to file bankruptcy, maybe you can help to change this law too!!

[...] LISTEN TO THE FULL RADIO INTERVIEW HERE (at On Point with Tom Ashbrook website) [...]

I am so scared of transferring from community college to private college. I feel so disheartened and I think the best thing for me it to finish my 65 credits and go to some skill training institution. I have a 3.80 GPA – all that work for nothing! I intend to drop out at the end of this semester and pay off the $16,000.00 that I already owe and call it a day. The most discouraging thing about school is not only the professors you pay to be rude to you but the student loan Direct Loan Department of Education envelops that keep arriving in the mail. I don’t even open them anymore because I have no money whatsoever to pay the interest on these unsubsidized loans I have. I took the unsubsidized loans because I went thru so much crap to get signed up for school and after all the time I stood in that 5000-people line, I just said “yes” to everything without even understanding that I would be expected to start paying the interest back on it. Now the choice is between paying this interest or eating and sleeping under a roof. Sucks.

You people make me sick. If you have bills pay them. If you can’t pay them get a second job. If you can’t get a second job, do what I did, sell drugs. Yes that’s right, I sell cocaine to pay my loans and I’m proud of it. At least I’m not some dirt bag like you people who walked away from your debt. I have plans to pay off my loan within ten years by expanding into the local community college and high school. My bills are paid and I have found that success is relatively easy to accomplish in America. We dont need a bail out. We need you people to quit crying and think outside the box.

The last posting by JurisDoctorate failed to see that most of us already have / had 2 or 3 jobs to pay/ try to pay our loans and it was not enough for our lenders. Also, those who lost their jobs now JurisDoctorate who sells drugs is a very confused individual whose words fall on intelligent ears and received not with disdain but with emptiness at his/her lack of comprehending the true issues here. That said – it is easy to see how the general population who did not get snagged into Sallie Mae’s or other lenders usurous practices have misplaced feelings about those who cannot pay their loans because those without these types of loans and situations have not informed themselves about the issues.

I am a co-signer of my son’s $30k student loan with AES, and paying back jointly. We have good record to pay back, but interest rate is still high, as of February, it is 10.5%, and does not reflect of prime rate, at all. I asked why no interest change accordingly to FRB rate, but no reasonable answers from them and they are so arrogant and have no sense of “customer services”. Their demeanor is as bad debt collector, authoritarian and bureaucratic and I feel so bad to ask them questions.
AES is a typical financial predator and greed banker.
We need to stand up tore-regulate student loan industry or simply get rid of them and replace with 100% Federal Loan.

Hello there from California~!

Thank God I had great parents who allowed me to live at home during my first 2 years at the local community college. THEY DID NOT PAY FOR MY FIRST TWO YEARS..I did working a job in retail and a pizza joint..What a motivator! Also, it enabled me to save $$$ for my last 3 years Student Loans were inevitable, but I consolidated when interest rated were low. Call me advanced for my age at the time, or just smart, but SAVING $$$ is the way to go! It was enough to finance a semester abroad and allowed me to attend a public university in San Francisco, CA. What a dream I accomplished. In total, I incurred $16,500 for my undergrad in business which is endlessly useful. Thank you Mom & Dad for teaching the value of financial planning and money!

In my opinion, anyone who sells cocaine is a dirtbag and worse. they should be in prison.

Sign this. Perhaps it will also help assuage student debt:

http://www.thepetitionsite.com/1/forgive-student-loan-debt

Sallie Mae needs to be investigated for fraud, money laundering, and racketeering. Albert Lord should be thrown in prison along with any politician who has ever received donations from a student loan company.

I had a hardship issue that began with unemployment, and subsequent underemployment (with two jobs, no less).
Here is the way it works: I open a “ticket” to start the process of reviewing my loan status. I am informed that I must call their customer service number. I call their customer service number and am informed that I have reached the Sallie Mae service center (which happens to be in India, or Pakistan). I tell them my issue, they direct me to the website (where I started) and close my ticket; No discussion ever occurs… no resolution, or even communication, is ever achieved it is a dead end.

I have complained to the US Dept. of Education, they claim to have instructed Sallie Mae to work with me… I can never speak to anyone who can confirm this, let alone work with me.

It is completely circular process. It is completely legal, and completely unethical.

There IS a problem, it IS a scam, and the government, by not stopping it, is complicit. Guilty Guilty Guilty.

I’d really like to know just what is so holy about an educational debt (compared to any other consumer debt)
All the arguments here posted by self-styled congratulatory and accomplished survivors of academia seem to miss an important point:
Sure – the lenders are all predatory wolverines, weasles and skunks (and often have proven themselves thus since the first gilded age…) I see it as a profound waste of time to debate that issue.
Just the same – it’s astounding how their silly greed reduces them to such stupidity. Granted – they make their killing, so why should they care?
But as the whole sordid system unwinds…I forget exactly who here made the comment – forgive me for not crediting you…words to the effect – you’d love to support the economy by being a good consumer, but it’s all going to the student loan.
A hoot. A sad, pathetic shamble.
America has financialized itself back inside its own navel (not a pretty sight.)
It does not produce wealth anymore. Just intercepts it.
(like a Catcher in the Wry)
oh my.

Student loans destroyed my life. I quickly realized I would never be able to pay them back and never be able to declare bankruptcy. I understood that the usuary being practiced against me by my own government was propping up the most terrible generation in American history – the baby boomers – on whose watch this and countless other unsustainable policies have been taken to fuel their pension/retirment & keep their bellies full & keep the economy propped up as a justification and exhibit A for their know-it-all stench.

America will be a safe place to live when the baby boomers have died out – but there won’t be anything left. I left over 10 years ago – live in Europe – have spent every holiday and birthday alone – miss my family & friends – but I lost touch with most people and could not bear the shame of poverty and dissapointment – and the student loan collection agencies STILL CALL MY FAMILY. Toughened me up, however – I take pleasure in the simple things in life now – a piece of bread, 10 minutes in the sunshine, etc. I will live FREE OUTSIDE THE USA – and poor, rather than being a slave at home and defined by this credit score. As I understand it, to have a job with any financial responsibility the employer will review your credit score. Shall I advise you where you can stick my credit score?

I KNOW THIS WILL NEVER CHANGE. I am 40 years old now – with no real home. I don’t want your pity. I don’t want anything from you ever again! I try not to think or speak about this subject as it upsets me too deeply. And anyway people never understand – they just assume you are one of those terrible people in life that does not pay your debts.

It is not a democrat/republican issue – it is a generational issue – you baby boomers – pointless to even engage you in conversation – its all about YOU! I curse you all! May you reap what you have sown in the afterlife.

And when you come to Europe for your holidays, I’m the one glaring at you on the metro. And when you ask for directions I will reply in the foreign language I did not learn at your university.