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Here's a Demand: Forgive Student Loan Debt
As US student loan debt nears $1tn, it's time for the banks that stole these young people's future to do the right thing
As the Occupy Wall Street protest enters its third straight week in New York and continues spreading all across the country, what is abundantly clear is that "the other 99%" – as opposed to the super-wealthy 1% who've been coddled for decades under the failed economic premise that cutting their taxes and providing them with countless tax shelters, loopholes and other breaks will "trickle down" to the masses – are simply fed up with the status quo. So they are doing the one thing within their power to make their voices heard.
The Dodd-Frank Wall Street Reform Act fell far short of addressing the practices and behavior that lead to the near-collapse of the world economy. Corporations are sitting on record levels of cash, but are refusing to hire. Personal debt, including mortgages, credit cards and especially student loan debt have reached astronomical levels. All this is true, yet Washington, DC and the bankers on Wall Street seem tone deaf to the needs of the people.
For two and a half years, I have been advocating for a new way of stimulating economic growth from the bottom-up – a "trickle-up" approach to rebuilding the economy that reflects the realities of the 21st century via the campaign Forgiving Student Loan Debt. The argument is simple: relieving middle-class people of their educational debts would enable them to begin spending money in ailing sectors of the economy, start businesses and families and buy homes – that is, to have the "American Dream" that seems more and more out of reach with each passing day.
For the first time in history, total student loan debt recently surpassed total credit card debt in the US: current and former students collectively owe approximately $946bn in student loan debt, with no sign of this accumulation slowing down. In fact, it's projected to exceed $1tn within the year. Student loans have been stripped of nearly all basic consumer protections that every other type of debt enjoys, including bankruptcy protections and statutes of limitations. So, while you can have your business, credit card, mortgage and even your gambling debts discharged or restructured in bankruptcy court, student loan debt is with you for life – and sometimes beyond.
By turning education into a commodity where the students must personally bear the full costs of an educational system that, in fact, benefits all of society, not just the students themselves, we've shifted the ever-increasing burden of skyrocketing tuition costs down the socio-economic ladder onto those who can least afford to shoulder them. Couple that with a job market that's been utterly decimated by the irresponsibility and greed of those at the very top, the underlying reasons for the Occupy Wall Street protests start to come into focus.
If the Federal Reserve can hand out over $16tn in loans, at little to no interest, to the very institutions that caused the financial collapse in the first place, why must average Americans borrow money at upwards of 8% or more just to obtain an education?
How can we expect the housing market ever to improve when those we generally rely upon to purchase homes – college grads and professionals – are buried under tens of thousands of dollars or more in student loan debt, from which there is almost no escape?
If education is "the great equaliser" it's always touted to be, then why have over 432,000 people signed a petition in favor of student loan forgiveness as a means of economic stimulus? In the two and a half years that I've been working on this issue, I have yet to come across a single person who doesn't want to pay back what they actually borrowed (as opposed to three, four or five times the sum they borrowed); but they simply don't have the means to do so.
For more than 30 years, the rich have gotten richer, the poor have gotten poorer and the middle class has been nearly squeezed out of existence. Forgiving student loan debt would not only provide for a sustained economic stimulus over the course of the next 20-30 years by allowing educated Americans to use the money productively – rather than have to spend it on repaying several times the amount they borrowed to obtain a degree that no longer has the same value it once did. That would not only grow the economy, but it would also serve as a reaffirmation that an education is actually worth pursuing.
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24 Comments so far
Show AllIn solidarity with the protesters on Wall Street ... I'm not paying back my student loans. Not that I could afford it even if I wanted to anyway ... after being unemployed and under -employed for nearly two years ... With close to a rent's payemt worth of student loans due every month.
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Somewhere out there a Wall Street oligarch is gonna have to make do, rough it a bit, and "pull himself up by his bootstraps" without my $40,000 contribution.
Ok, so we just remove your privilage to vote and your future participation in any other Federal Aid program like Home Loans, Medicare, and SSI. Oh and don't bother to call the cops or Fire Dept if anything happens to ya!
>^^<
Oh no!! Don't take away my "privilege" of choosing between the Red Wall Street candidate and the Blue Wall Street candidate!
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And don't worry yourself too much about my participation in medicare or social security ... The Blue Wall Street team is doing their best to make sure those programs cease to exist in the future anyway. So that's good news for you!
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Why not just put me in a for-profit prison where I can pay off my debt by making 25 cents a day working on a chain gang? That sounds fair!
Thanks, but no thanks.
There's nothing more disgusting than people who don't want to make good on their obligations. Except perhaps people who are trying to exploit a recession to goad congress into freeing them from those obligations. Enter Robert Applebaum.
How about those who worked their tails off to pay off their loans Mr. Applebaum?
How about those who chose to NOT go to college because of the exorbitant, costs Mr. Applebaum?
How about those who have met their obligations time and time again, even if that meant taking jobs they didn't want, or were beneath them Mr. Applebaum?
This whole "forgive student loan debt" is a shameless disgrace. It's not a surprise though. We live in a time where people no longer have any shame. None whatsoever.
Yeah! You tell those lazy kids today to take some personal responsibility for the crimes of Wall Street and Washington!
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They're just too dumb to realize that there's no such thing as upward mobility in America anymore! How dare they aspire to be something more than just cogs in the capitalist death machine ... screw them! They're nothing more than entitled welfare babies stealing from the economic innovators on Wall Street who are doing the work of one, G-O-D. Heard of him?
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And furthermore, let's flush the idea that an individual's education benefits the whole of society, right here and right now! Shutting up and doing what your told is what benefits society the most!
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Wall Street took something like 20 trillion dollars in free money from the taxpayers (to loan back to the taxpayers at interest) ... but let's not forget they're doing the work of GOD down there! And it's not like that money just went to a few people either ... they spread it out amongst fully 1% of the population ... for the benefit of all!
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Those crybaby students and their debt are like a black hole! They will take the money and run. Let's start a protest rally to shame those kids!
Uh, they promised to pay. That's what the signature at the bottom of the document means. Maybe there should be a question on the SAT test about that? I'm all for giving the banks their comeuppance but this issue isn't connected.
Regressives try to paint Progressives as lacking in personal responsibility and having expectations that the government will bail them out. I don't think that's accurate, but your post seems to support their claim.
So, people who can't pay back loans are "lacking in personal responsibility and having expectations that government will bail them out."
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Actually you and your regressive friends are wrong. I have no expectation that government will bail me out, unlike it routinely does for Wall Street, Corporations, the oligarchs and the plutocratz... and I fully expect to suffer the consequences of being in debt for probably the rest of my life ... But then again, the entire smoke n mirrors fake economy is not gonna last that long anyway ... and my best hope is that my debt goes down with the sinking ship. In fact .. I hope it helps sink it.
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You should save your self righteous "I'm a better person than you cuz I'm debt free" harangue for your Wall Street apologizing buddies ... I'm sure they'll be able to appreciate it more than me.
It took me 10yrs to pay. and yes I consider myself a better person who pays his debts Certinally the banksters should go to jail! everyone but what they did doesnot remove me from my obligation to keep my word! It truly is what seperates us from the politicans, banksters and other lower forms of life!,
>^^<
Wow ... there were jobs when you graduated from college? Congratulations on that!
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It warms my heart to know that the capitalist death machine economy is working for someone.
"I'm a better person than you cuz I'm debt free"
By the way, I made only $5,000 after I graduated and actually went to bed hungry at times. I can't say that's made me a "better" person. But it has made me better at keeping my word, realistically analyzing risk, avoiding debt, and putting aside so it hopefully won't happen again. You think it has been fun paying for things while many bought SUVs and lavish homes on credit?
I'll grant that there are likely many who, with good intent, took out loans only to find a crummy economy greeting them at graduation. Perhaps some accommodation would be in order but I don't see a blanket forgiveness as equitable. There should probably be more cooperation between lending, education, and business to insure that those who take out loans have a fighting chance to pay. However, in the end, borrowing is a choice and a responsibility. Widows and orphans deposit money in the banks so they can lend it, by the way. Again, irresponsibility on the part of bankers doesn't make it O.K. to be irresponsible.
We slide down a slippery slope when we start to substitute our "interests" for our principles.
Do you have student loan debt? Don't feel like or can't pay it back? Call the offices of Robert Applebaum. We will harass the lender for you until all of part of your loan is forgiven. A small percentage fee applies.
This message brought to you by Robert Applebaum an attorney from Staten Island, NY.
That would be a fine tribute to those of us who saved and paid for much of our children's college education and are going to insure that they pay back their loans. Guess I should have bought some toys and asked to be "forgiven" instead.
Sorry I saved for retirement and bought a modest house I could afford. How un-American is that? Not fueling the growth and spending party to the greatest extent credit would afford!! Simply treasonous!
Just because Banks behave badly doesn't mean we should expect to do the same. I believe in helping the less fortunate but not necessarily those with less self restraint.
How could anybody know how screwed up the world was gonna be now, I'd have demanded a free education like illegals get! and take out millions in loans and never pay any of them back... and raise a bunch of self-entitled little brats to leech of the community like their parents!!
Note I have no kids, couldn't afford them either so I was real carefull >^^<
*sigh* Big frickin' golf clap for you, sunshine, for being just SO perceptive.
Yes, ah the sweet life of the illegal, who can just stomp in anywhere, announce "I'M HERE ILLEGALLY!" and get everything for free. My, my.
And people who "leech off the community" by never paying their student loans back. What a bunch of self-entitled brats!
Of course, here back in reality a.k.a. Non-Fox World, did you know that the families of congressional aides don't have to repay their student loans? Why, those lazy self-entitled brats.
The skyrocketing costs of college education are part of the class warfare by the 1% against the 99% which started in the 70's when GE shill Governor Ronald Reagan first began slashing what had been free college education for California.
The same thing has happened to City College of New York and other formerly free or almost free public colleges across the country.
When I went to college in the 70's after the New Deal and Great Society I
got "National Defense Student Loans" at 3% interest with no requirement to
pay and no interest accrued until I finished my education which included
Graduate School. Those college loans came directly from the Federal Govt with the rationale being that post Sputnick, the Space Race etc that it was critical for the country's growth and security to educate even working class students like myself.
But besides increasing public college tuition, the Bankster 1% managed to get themselves a cut of the Student Loan business even though in fact they were incurring no risks from Federally guaranteed loans while increasing interest rates to 8% and up.
Now the Banksters and Hedge Fund billionaires have their eyes on a new target - the takeover of public schools and privatizing them for profit.
The real issue is not student loan forgiveness - it is how colleges increasingly profiting from lucrative Corporate connections with decreasing public subsidies for college students (as opposed to research) make monstrous student loans necessary.
There is undoubtedly a fairness issue between students who worked to pay for their college and those who got student loans. But there is no reason student loans should be paying anything over 3% interest to banksters, just as credit card holders should not be forced to pay 30%!
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Forgiving student loan debt is actually a very good "demand". Obviously the issue with such a demand is, "what is the movement going to DO that could possibly extract such a concession, and do/es the movement's action(s) have a realistic possibility of being successful?
The malignant belligerence of some of you posters is beyond belief. Have any of these posters had circumstance swing against them? I went to school got my degree and it took two years to find work in my field, and at that time the wages of a starting earner didn't leave enough to pay for living and loan payments. For an 18 month period when I had no rent or bills to pay I paid my loan down, from 27k down to 22k then my circumstances changed and I was making enough just to survive with nothing to spare for the 350$ a month loan payment. This went on long enough for my hardship deferments and forbearance periods to end. I wasn't going to be able to make enough to keep up with the loans. The bottom dropped out of my industry and I was injured. Money stopped coming in as I couldn't work but the bills never stopped. My loan was sold to a collection company and it now stands at nearly 50K. I took that loan in good faith and intended to pay it back but that degree never lived up to the earnings potential it promised. So don't preach about us not debasing ourselves enough or that we're some spoiled children trying to weasel out of our obligations. WE were sold a bill of goods and the cupboards are bare. Except of course if you were "smart" and got yourself an MBA.
I can't imagine that anyone here bears ill-will toward you or doesn't sympathize with you or can't imagine what it's like to struggle to pay for present needs while the interest mounting from debt from the past darkens the future.
I'm sure that the hostility is directed at a very unusual proposal that is presented in an extraordinarily broad manner.
A suggestion that the government look to provide some relief for people trapped in serious difficulty is good.
Suggesting that tax money be used to pay all debts of one type ...when all of that type of debt was voluntarily assumed ...and when not all of that debt is crushing all the recipients....and when the total is half a trillion dollars....and when there's no basic justice to such a broad proposal that ignores crushing debts of other types (think catastrophic illness) that were not really voluntarily incurred.....
and when there's not a chance in hell that the proposal would pass the House of Reps
...might be what people are reacting to with disrespect.
If someone wants to suggest that the government does something to provide relief from the mounting interest on loans where people need the help, I'm sure that you'll see comments here that reflect well on the decency and spirit of Common Dreamers .
Best wishes to you
Nearly Half of this country is sitting on land that legally belongs to Indigenous Peoples by TREATY. They worked long and hard to acquire and preserve it.
Why should those present beneficiaries of stolen property be allowed to keep what is not theirs? Yes, they should give it up and return to the lands of their fathers. ADIOS! So those of you who can't see the justice of forgiving college dept..................please take a hike if you're on stolen property. And by the way, the world doesn't revolve around your ideas of private property.
---" So those of you who can't see the justice of forgiving college dept..................please take a hike..."
funny how in the last couple of thousand years of human history people haven't been able to "see the justice" of things in the same way.....and funny how often assholes who laud themselves as seeing justice in a different, superior way than, in their opinion, others "see' justice.......decide that those with differing (and therefore ) inferior vision should Take A Hike.......
perhaps, bigsurtree, should should explain the fons et origo of the justice of transferring only one type of voluntarily assumed personal debt....
or maybe if you can "see" it but are unable or unwilling to clarify the justice and share the reasons for it, justice would be served by having you sit and spin for a spell.
"funny how in the last couple of thousand years of human history people haven't been able to "see the justice" of things in the same way....."
Exactly! The absolute decimation of the indigenous peoples is just our particular method of delivering justice. How is that so hard for people to understand?
You are the asshole. It's funny how we don't see that in the same way.
I met a Canadian with a Mech. Eng. degree who had a $50K Student loan which he informed me only had to be repaid if you failed to graduate; Free if you did.
I'd rather see Students on Main St. bailed out, than Bankers on Wall St. Rather Bankers in jail than Students with ruined credit and no jobs, but it's quite the reverse here in Exceptional Land. Makes ya wish ya were Canadian, nes pa?
America has become the Rat Race society of legend. For 65 billion a year all college tuition could be free like in Germany, etc. They also don't have grades in Germany. Are we Americans moronic Neanderthals? It appears so. We are stupid about all our social and economic policies and have been for decades. We deserve to rot in hell; which is right where we are headed! In fact we have one foot in the grave already.
Long live the American Misery Tour! We are all on it!!