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PDF versionThe real cost of student loans
by Maureen Fiedler on Jul. 21, 2011
I have a friend who is absolutely passionate about human rights, especially women’s rights. If she had her druthers, she would work full time to end the scourge of global human trafficking, especially trafficking in women and children. And she is highly qualified: a lawyer with an advanced degree in international law and organization.
The problem? Many of the non-profits that specialize in such work do not offer salaries large enough to allow her to pay her student loans in any kind of timely manner. Many young people believe they have to find high paying work in something like “corporate law” until the loans disappear. Then, they can do what they really care about.
The problem with that “solution,” as we know, is that people can get used to a large paycheck (even if a lot of it goes to loan payments) and never look back. They sometimes abandon their ideal work, and begin to “fit into” a corporate lifestyle.
My friend has not abandoned her ideals in any sense. She keeps looking, but so far, no luck after about 3 years. And she is not the only one I know in this situation. Nationwide, I’m sure there are tens of thousands of idealistic young people in this same situation. They are caught in a system that requires them to defer badly needed work for social justice.
The student loan reform under the Obama Administration helped the situation somewhat when it ended “private” loans that had outrageous interest rates. Now, student loans are public loans, going forward. It also helps when certain universities or programs “forgive” part or all of a person’s student loans when they work in impoverished areas, for example.
But something else needs to be done to forgive, partly or fully, the loans like those my friend has -- which are private loans from the previous era where there is no “forgiveness” mechanism for idealistic work. I’m not sure of a solution, especially in a deficit-minded age. But maybe the government could find a way to offer at least partial forgiveness for certain kinds of idealistic work.
For this I do know: the world is being deprived of talented, idealistic workers for social justice who are trying to keep their ideals alive while they pay their loans.
Unfortunately if I were young
Unfortunately if I were young I couldnt go to college and law school again-my family couldnt afford it. (I graduated in the 90s) Only the rich will be able to afford higher education in the future. But having the govt force the forgivenemess of loans will only result in either higher taxes or fewer loans which will only worsen the situation. What we need is to lower the cost of education now.(The same applies to the health care reform. We need to lower the cost which is out of control)
You don't think exorbitant
You don't think exorbitant tuition rates are the real culprit, and not the student loan business? At least when the loans were private, a person could shop for the best rate, or have some negotiating room. With the fed govt involved now, you're paying for bureaucracy and inefficiency.
And yet another private industry, that hires people, pays salaries and taxes and supports other businesses, is sucked up by the ever-expanding federal govt. There is no Constitutional mandate for the government to provide student loans.
Hopefully this will be abolished come the next administration in 2012.
The contention that students
The contention that students could shop for the best rate is fiction. Schools worked under "preferred lender" status that allowed schools to steer students into specific loan programs. At USC, Johns Hopkins, U of Texas, Columbia, and many other schools - the Directors of Financial Aid were fired when it was revealed they took money from those very "preferred lenders" who "coincidently" were responsible for the majority of student loans. The excessive fees and penalties that organizations like Sallie Mae could apply to a defaulted loan actually accounted for more profit than servicing loans. In fact, at the peak of the corruption, Sallie Mae owned three corporate jets, the CEO owned three mansions, and the CEO built his own, private 18 hole golf course.
The corruption and despicable behavior of the private sector when loans were not with the government is the very reason the government controls loans today. The greed and lack of integrity of those at most Student Loan providers is at the heart of those reforms.
Your friend should have opted
Your friend should have opted for a state run university or chosen to get her degree part time. If the loans are forgiven, someone still has to pay,and that someone is the taxpayer, not the the nun who belongs to a community.
This thesis is
This thesis is ridiculous.
Don't take out a loan that you have no intention of repaying no matter how good your cause.If you do,it is called stealing!
All of us have to pay our bills!
it's a racket Barbie, like
it's a racket Barbie, like the mob of old. Higher education should not cost so much that you are in hock to the corporations for the rest of your most useful professional life.
It's not so in other nations.
And housing should not be so ridiculously high either. It is not so in other nations.
And Health Care? do not get me started
it's a racket and the whole house of cards has come crashing down since the bush dynasty and dick cheney grabbed the money and ran.
No one forces you to take out
No one forces you to take out a loan.
If you don't like the terms, than don't take the loan.
If you do take the loan, then you have a legal and moral obligation to repay it.
By the way, yes, I had an education loan. I repaid it with interest and on time.
I don't have any special powers. If I could do it, so could anyone else.
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