Incredibly good. Must watch.

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Strike Debt/Rolling Jubilee

January 26, 2013

We’ve found ourselves tweeting quite a bit lately about Strike Debt (http://strikedebt.org/) and its Rolling Jubilee (http://rollingjubilee.org/) initiative. The Rolling Jubilee project buys debt for pennies on the dollar (like lenders and banks do) and then, instead of collecting payments from the debtor, the project forgives the debt. The project is doing this for debts like medical bills. They can’t yet do it for student loans, but are looking into ways to spread to that area. What an amazing gift to receive as a debtor, especially for debts like medical bills, which are unexpected and incurred through no fault of the debtor. You can donate to the project here: http://rollingjubilee.org/#contribute.

From Above The Law: Student Debt: It’s Not Just For Young People Anymore.

The post discusses a Washington Post article on Americans over 60 who are still paying on their student loans. I’ve always joked that I’ll be paying on my student loans for life, and it looks like that’s a joke that’s funny because it’s true. But the thing that strikes me about this phenomenon of senior citizens who still have to pay on their student loans is this, from the Above The Law post:

To me, the fact that people are still paying down debt when they can barely remember the education they received is evidence that cost of education has outstripped the value of education. Why is education one of the few goods or services people will pay for without fully understanding its intended benefit? Because education and increasingly higher education has become a threshold issue. It might not be worth paying $100,000 to go to law school to get a job as a paralegal, but if all the paralegal jobs are going to people with J.D.s, you have to pay to play.

What, exactly, are we getting for putting ourselves in lifetime debt?

My student loan story

January 3, 2012

As this blog has lain mostly dormant for some time now, and as it has changed over time to be more of a solo effort than a group one, I’m abandoning the not-so-royal “we” and telling my student loan story, and the story of this site.

There’s a reason I keep this website up, even though I rarely have time to update it, and mostly focus on the Twitter Feed these days. The reason is simple: I believe student debt is an important issue, and it’s one that affects me personally. So in case you’re interested, here’s my story.

I went to community college for my associate’s degree in political science, and I took out student loans at that time which were serviced by E.F.S. I finished up my undergraduate studies at a state university, graduating in 1997 with a bachelor’s degree in Public Policy. I financed my studies at my university with a small percentage of grants and a large percentage of student loans through the Federal Direct Loan Program. I moved to a large city later in 1997 to attend law school, and I received my Juris Doctor degree in 2000. I financed my law school education with federal Stafford loans as well as private loans from Sallie Mae. After graduating from law school and passing the bar exam, I took a job as a law clerk for a judge. At that time I applied to consolidate all of my student loans, from both undergraduate and law school.

I think I was an average borrower in that I didn’t expend a huge amount of time and energy researching consolidation. I just figured I could make fewer payments per month if I consolidated, and I bought into the hype about locking in interest rates: That they were bound to rise. I was never told that I could never refinance once I consolidated. If it was in the “fine print” of my loan documents, I didn’t see it.

My loan consolidation came through in February of 2001, at an interest rate of 8.25%, the cap at that time. Since I was on a relatively low government salary, I deferred my payments for the duration of my time as a law clerk, and started paying when I went into private practice in late 2002.

Since the time I consolidated, interest rates on student loans had dropped to historic lows. Also since that time, I’d received email solicitation, postal solicitation, and phone solicitation urging me to consolidate my loans at the lower rates. I started to pay attention a bit more when I received a phone call from my father, in which he mentioned the low interest rates he’d been hearing about in radio advertisements, and asked if I’d looked into refinancing. He figured that a consolidation loan would be just like a mortgage, allowing for refinancing more than once.

I then started to do some internet research to see if I could download a refinancing application or request information on refinancing. What I found was surprising. I came across a (now defunct) message board full of posts from people who had consolidated at high interest rates. All of these people who had looked into refinancing had run into the same brick wall: The one-time-consolidation rule. Under the Higher Education Act (“HEA”), a borrower can consolidate once, and only once, and may not refinance. With the way the law stands now, the only other options to try and ease the burden are to try to get a home equity loan to cover the consolidation debt, or to go back to school and take out more loans, and then consolidate again with the new loans. It made and still makes no sense to me: Borrowers can refinance mortgages, vehicles, and other types of loans, but there’s an iron-clad prohibition on refinancing student consolidation loans. I then decided to write to my Congressional representatives about this issue. By checking back often with the above-referenced message board and doing research on thomas.loc.gov, I found out that various bills had been introduced to allow for refinancing of student consolidation loans, but all languished in committee.

I started talking the issue over with friends of mine, and together we brainstormed ideas about how to create a buzz about this issue, which affects so many people all over the country. Thus http://www.collegeloanassistanceact.org was born, as a place to centralize information, link to an online petition, link to a message board, and provide sample letters for people to use to write to representatives, candidates and media. Since then, other bills have been presented on the issue, and at least one subcommittee hearing has been held to discuss it. We then broadened the scope of the website at http://www.generationdebt.org, in order to cover all of the bills regarding this issue. After a few years, my interest in the issue remained, but the news surrounding it became repetitive. We (or I) then became generationdebt.wordpress.com, and posts became more sporadic. I’m the only one updating now, and I find it hard to find things to post that don’t just indicate that yes, all the same problems are there, and there seem to be no solutions to them. I do keep the Twitter feed up pretty regularly, as that is quicker and easier, and seems to reach more people.

The issue of student loans is one that’s personal to me. My student loans total well over $100,000. My monthly payment is around $1000, most of which goes to interest. At this point, I’m not making a dent in my principal. I’m adjunct teaching these days at a university, and I’m not making a lot of money. I’ll be the first to admit I’m not the best person you’ll meet at budgeting (though this is an area I continue to work on). I like to go out, I buy things once in awhile, etc. I’m human, and just trying to live my life. You can argue that I should have gone to cheaper schools, but you’ll note that I did just that for much of my education. Also note that students should be able to attend the best school to which they’re accepted. You can argue that I knew the consequences of borrowing so much, but I don’t know that anyone really does in their late teens/early 20s. You can argue that I shouldn’t have gone to school if I didn’t already have the money to pay for it, to which I will respond: Is that really the world you want to live in? Where only the rich can be educated? The old model of working summers to pay for school no longer works. Tuition has skyrocketed in recent decades, and wages have not. For better or worse, we live in a credit-based society, a debt-based society. I believe that anyone who truly wants higher education should be able to get it, regardless of finances. I don’t want to live in the bad old days of only the rich being able to rise.

The bottom line, however, is not how I spend or budget, or where I should have gone to school. The bottom line is that it is flat-out unfair to punish students for acquiring an education, and that is exactly what barring students from refinancing their consolidation loans does. This problem has a huge impact on many people’s lives. Graduates who want to take public interest jobs cannot, because they have to make more money to pay their loans. Graduates have less money to spend as consumers, which hurts our struggling economy. And finally, graduates who are crippled high payments are more likely to default, which isn’t good for anybody. And who gains from this system? The lenders, who make millions in profits. This is a core issue for the current Occupy movement (which will be the subject of my next post), and the buzz is growing (even though it’s still the same story, for now).

So that’s my student loan story, and the story of this blog. I may post sporadically, I may be on Twitter more than I blog these days, but I still care about this issue, and I’m still dealing with it personally. And that’s why I’m not going anywhere.

Apologies for the lack of updates, things have been ridiculously busy for us and don’t look to change anytime soon. We’ve got a slew of links to post, and lots to discuss, and we promise to get to it one of these days. In the meantime, check out our Twitter feed on the right side of this page.

Here we are at the end of March, and we hope that spring has arrived wherever you are. As for us, well, we can see some sun, but the temps are still February-esque. Somehow, we expect lamb-like weather to be warmer. At any rate, here are the links that have been catching our eyes these days:

-Stories about for-profit schools from Duluth News Tribune, Philly.com, Campus Progress, Tampa Bay Online, stltoday.com, and Commercial Appeal.

-General stories about student loan debt from Frum Forum, Winona Daily News, Huffington Post (more here and here), Center for American Progress, Daily Sound, ProPublica (more here), Fredericksburg.com, Forbes, Moneywatch, InsideHigherEd, State Press, Boston Channel, St. Louis Beacon, BlogHer, The Daily Evergreen, Saving Advice, and Dissident Voice.

-A story about the consequences of defaulting on student loans from Advance.

-Stories about help, or proposed help, with student loans from ABC News, Statesman Journal, ProPublica, Denver Post, WalletPop, KTVZ.com, Public Radio, Boston.com, and The Street.

Student Loan Debt Clock: $900 billion and not going out like a lamb.

Default: The Student Loan Documentary

New year, same debt

January 29, 2011

Well, hello 2011! You kind of snuck up on us. New year, (arguably) new decade, same old student loan issues. And away we go…

-Still lots of news on for-profit schools and the lifelong student debt issues that accompany them, from Business Week and Bloomberg.

-Quite a few recent stories lately on lifelong student debt, from Business Insider, The Daily Campus, Above The Law, KHAS-TV, CBS Moneywatch, CNBC, and The State News.

-Will public service help with your student loans? Perhaps, says the Student Loan Ranger. In California, teachers may get some loan forgiveness, according to the Examiner. And here’s some general student debt advice from SFGate and the Chicago Sun-Times.

-Finally, Stock Markets Review opines that student loans will be the next government bailout.

(Oh hey, did you know that GenerationDebt is on Twitter? We are. Follow @GenDebt.)

Student Loan Debt Clock: $885 billion and growing in the new year.

That lovely time of year when we find lots of year-end wrap up stories, lots of tighten-your-fiscal-belt advice for January, and this year, lots of recession/debt stories. So here we go with our last post of 2010.

-We came across a lot of numbered lists this month for some reason. So here are 5 student loan repayment tips from CBS, 5 from BlogHer, and 7 things they don’t tell you about student loans from CBS.

-Among those on tap to get help with student loans, we have Colorado doctors (more here), doctors everywhere (potentially), Iowa teachers, and veterinarians serving in shortage areas.

-Many blogs have seen fit to post about student debt woes lately, including The Pursuit of Harpyness, The Frisky, Above The Law, and The Consumerist.

-Plenty of general “student debt sucks” stories out there right now, from ABA Journal, Falconaire, Parent Dish, The Daily Cardinal, and Blogcritics. And one story about a doctor with over $500,000 in debt.

-In terms of solutions, you can try bankruptcy, but you won’t get far. You can’t cite the recession for your failure to pay your student loans. Undue hardship is notoriously difficult to prove. (More here and here.) Also, you’ll want to avoid default because settling defaulted debt is difficult. Forbes thinks you should hold off on paying your student debt down. Luckily, you’re probably not liable for your spouse’s student loan debt. Another way to maybe get your debt down is to take out more student loans.

-In leglislative news, we have a report on enhancing tax credits, and a bill to make the student loan process more transparent.

-In terms of the broader implications of college debt, note that some say that college costs are the next bubble, and that student loans are the cause of the slowing economy.

-If you’re feeling bad about your student debt, take heart, because at least one U.S. Congressman still has quite a bit of student debt himself, and Wells Fargo will now forgive student loans in case of death/disability (Sallie Mae does already).

-Speaking of Sallie Mae, I’m sure all we borrowers paying exorbitant interest which we can’t negotiate or refinance will be pleased to know that its earnings are supposed to look quite good in 2011. In other Sallie Mae reporting, Just Means says that Sallie Mae cheats student borrowers: “While Sallie Mae has financed millions of educations, and therefore has increased access to education, it has done so with a business model that inherently cheats borrowers and causes them to pay unnecessary risk premiums. Because student loans are not dischargeable in bankruptcy, the interest charged on student loans is total windfall that is unethically earned.” (Oh, and speaking of fraud, 4 student lenders are paying the U.S. government nearly $58 million to settle fraud claims.)

Student Loan Debt Clock: $875 billion and growing all the time. Happy holidays!

…well, not really. But we can’t resist titling posts with the classic Morrissey tune every time November rolls around.

-This month we found some articles that deal with actual steps one can take to reduce student loan debt from JDSupra (“4 Alternatives to Bankruptcy for Repaying Student Loans”) (because you are very unlikely to be able to discharge student loans in bankruptcy) and Boston.com (“10 steps to take if you can’t pay your student loan bills”). Which is good, since you can’t deduct student loan interest on your taxes if you make above a certain yearly salary, debt collectors are now calling on student loans, and practically the only ways to get rid of student loans are to pay them off or die.

-As we see more and more articles discussing rising tuition costs and debt levels, we’re also seeing those that ask if college is worth the debt incurred, and those that discuss student loans as the next housing bubble.

-The news on for-profit colleges continues to grow, see The Christian Science Monitor and Star News Online.

-Finally, this article deals with potential problems with new student loan rules proposed by the Obama administration.

Student Loan Debt Clock: $863 billion and growing. That IS a monster!