Student Loan Debt Trap


 

Banking Honor?
Banking Honor?

Student Loan Debt Trap

Commentary: Helping alleviate the student debt trap | McClatchy

Andrew Ross, a New York University professor of social and cultural analysis and an advocate of student debt relief, spoke on the subject at Duke this month. In an interview, Ross said he sees the effect of debt on his students. “A lot of my students fall asleep, and not all of them because of my boring lectures, but because they are working two or three jobs,” he said.

Their struggle will continue after college, Ross said, despite a degree from one of the nation’s most expensive institutions. “This generation faces a predicament where their future is foreclosed,” he said. “They’ve taken on debt to prepare themselves for employment, and the employment is not there.”

At a time of bailouts for Wall Street banks and extensive corporate welfare through tax breaks, it’s wrong that we now accept heavy student debt as inevitable and inescapable. (Federal law prohibits, except in rare cases, private or federal student loans from being discharged in bankruptcy court.)

Commentary: Helping alleviate the student debt trap | McClatchy

 

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Zach from http://www.studentloandebtforgivenesshelp.com/ comments on a previous post.


The post commented on was Student Loan Debt a Lifetime Burden for Middle Class but Major Money Maker for Goldman Sachs.

Here’s Zack!

While the student loan problem needs to be addressed in some way, I don’t think giving student loans dischargeability in bankruptcy is the right way. I think bankruptcy courts should be able to modify student loans, but not completely whipe them out. Whiping out student loans would lead to just a lot of abuse. All of us would pay in the way of higher interest rates and fewer students would qualify for loans. I could get a full education without paying a cent knowing I can just declare bankruptcy and by the time I would have paid off my student loans (10 years), the bankruptcy would be off my credit report by then.

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Student Loan Debt a Lifetime Burden for Middle Class but Major Money Maker for Goldman Sachs


Kids today still screwed – Student Loan Debt – Salon.com

Just in case anyone decided to “scam” themselves some free higher education by going to college and then declaring bankruptcy, Congress decided in 1998 to make sure that student loan debt had no statute of limitations and could not be discharged except in the event of extreme (and effectively unprovable) hardship. Then tuition began skyrocketing, players like Goldman Sachs got into the student lending business, and middle-class job opportunities for people without college degrees disappeared. The result, naturally, has been extremely profitable for certain people (Lally Weymouth) and basically awful for everyone else in America. Now, Eric Pianin is in Lally Weymouth’s Washington Post saying that student loan debt might be “the next debt bomb.

Kids today still screwed – Student Loan Debt – Salon.com

My poor students are getting battered by an economy where there are few jobs in a nation where last year’s college graduates owed an average of $24,000 in student loans.

Other nations do not place the burden of higher education on the students. It is a matter of public expenditure. The United States has long been the leader in college graduates worldwide and no we are fourth. I see no prospect of that getting better but only worse. Education is not a commodity. It is a public good necessary for a successful society.

We can do better than this. We are a better people than this.

James Pilant

Will Rogers – Mortgage Relief


Will Rogers (19th century photo)

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I am a big fan of the American humorist, Will Rogers. I have a first edition of one of his biographies, (Will Rogers, Ambassador of Good Will, Prince of Wit and Wisdom – P.J. O’Brien) and hope to collect a complete set of his newspaper columns.

The mortgage foreclosure crisis has  long been a concern of mine. I’ve written about it many times.

Imagine my delight when I discovered that Rogers had his own views on the subject –

… Why my lord, there is dozens of different things that will help the farmer on his land, besides water, or fertilizer, either. There is the interest on the first, and second mortgages. Why don’t they introduce a bill in Congress to help the farmer by paying off his mortgages? That’s what eating him upon the farm, it’s not lack of irrigation, or lack of fertilizer – it’s abundance of interest payments; that’ s the baby that is there every minute of every day. Talk and sing about “Old Man River,” but it’s old man “interest” that keeps the farmer running to town every few days. He has to have a bookkeeper to keep a set of book to keep track of when his various Notes and Mortgage interest comes due. It’s the thought of the old mortgages that keep him awake at night.

But if you notice, they are always trying to put through some kind of bill in Congress, but nobody ever puts one through to do something about interest. No sir, you couldn’t do that, because then you are getting into the business of the boys that really hold the hoops while the jumping is going on. You could no more get a bill through to whittle the old interest down, than you could get a politician to admit a mistake.

(The column was written in 1928 and is found on pages 134-135 of A Will Rogers Treasury, compiled by Bryan B. Sterling and Frances N. Sterling, Crown Publishing 1982)

Rogers was not a big fan of Congress or the big banks. In 1928, the farming depression was in its tenth year. American farmers had prospered during the First World War and had borrowed heavily to increase production by buying more land, mechanizing their farms, fertilizing and irrigating their crops. When the war ended and the soldiers of that war returned home and resumed farming the price of every kind of agricultural commodity dropped dramatically. The farmers were left on the hook for large mortgages that were difficult to pay. Believing in their way of life they doubled down getting further into debt but the agricultural depression did not let up until the Second World War. I wouldn’t be until the Roosevelt Administration that the farmers began to receive significant aid.

Will Rogers was a member of the one percent, the highest paid film star of his time but he never forgot where he came from and who was important even though they didn’t have that much money.

James Pilant

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Bachmann Criticizes Obama’s Student Loan Plan – From the Wires – Salon.com


Obama is changing the rules governing student loans to make them easier to pay. Bachman does not like it.

Like her right-wing brethren, Bachman has a fetish for a thing called “personal responsibility.” I put it in quotes because what she means by the phrase is different than an actual English interpretation of it. Let’s quote from the article:

“There is a morality in keeping our financial promises, and I don’t think we should push that off onto the taxpayer,” she said. “The individual needs to repay and be responsible for repaying their student loan debt.”

 Bachmann Criticizes Obama’s Student Loan Plan – From the Wires – Salon.com

In English, personal responsibility means that individuals have a responsibility for their obligations. But Bachman only means the little people, those individuals with mortgages, student loans and credit card debts. She is merciless in her desire to have every last dime extracted from these individuals.

But she is less enthusiastic about investment banks, American corporations’ overseas operations, or any legal accountability for the economic catastrophe of the Wall Street Crash of 2007 and it subsequent bailout (at a 100% of the value of the toxic assets). How long could I go on about the incredible lack of responsibility by much of our corporate and ruling class?

So, personal responsibility is only applicable to certain people.

Let me make a guess as to how the little people, those with personal responsibility, as opposed to those without are divided. It’s purely driven by the size of their campaign contributions and the number of lobbyists they field.

It is not surprising that Bachman is unable to manage any criticism of a student loan system that among other problems happily pays out money for valueless degrees by unaccredited institutions. It is not surprising that imposing twenty and thirty years of debt on America’s young is not a problem in her eyes. It is not surprising that the pain of ten of millions of Americans who live day to day one step above financial insolvency while American* corporations horde their money and enjoy record profits does not strike her as a serious problem.

James Pilant

*I sometimes wonder just how American they are. Corporate fidelity to the moral standards of a patriot seem questionable at best. Many business thinkers deny that corporation have any responsibility toward the nations whose laws and military protect them.

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