"In his book The Price of Civilization, Jeffrey Sachs argues that the cost of making all public higher education free in America would be between 15-30 billion dollars. While this may sound like a large sum, it could actually save money."
"First of all, the government is currently spending billions of dollars on for-profit schools and other colleges and universities that have very low graduation rates. In fact, what is going on in the state of California is that as students get priced out of the University of California, they either drop out or go to community colleges. Meanwhile as community colleges are defunded, they are forced to cut their enrollments and raise their fees, and the result is that students end up going to high-cost for-profit schools that have a very low graduate rate. In other words, in the current system, everyone pays more, and we produce fewer graduates."
"Currently, only 30% of Americans who start college or university end up graduating, and this represents a huge waste of time and money. If students did not have to work while in school, the graduation rate would improve drastically, and students at universities could graduate in four years instead of six or more years. In fact, the biggest reason why students drop out of higher education is that they cannot afford the high cost of tuition."
"Not only is higher education seen as a key to economic advancement, but if all 18-24 year olds were in college, we would reduce the unemployment rate by 2 million people, and fewer people would be in need of governmental assistance. Moreover, a federal program to fund higher education would relieve states of having to fund these institutions, which would free up money for other needed services."
"While the US has a free K-12 public education, its failure to fund higher education means that America's economy is unable to compete with other developed nations that have free universities."
"Furthermore, by removing the need for students to go into debt, the government would allow graduates to be more productive, and they would have more money to spend, which in turn would act as a stimulus for the economy."
"Of course, there are reasons beyond economics to provide free higher education. Not only do we need a more educated workforce, but we also need more educated citizens. It is also important to point out that people with higher education degrees report a higher level of health and happiness. In fact, societies with a high rate of degree attainment have lower crime rates and higher rates of social welfare."
"While few people would now reject the idea of compulsory K-12 education, it is now time to make college universal and free."
Showing posts with label Debt. Show all posts
Showing posts with label Debt. Show all posts
For-Profit Colleges’ Mostly Black and Latino Students Face Higher Debt and Unemployment
"Private for-profit institutions have been the fastest growing part of the U.S. higher education sector for decades now, but a new Harvard study finds students attending for-profit colleges end up with much higher student-loan debts, are less likely to be employed after graduation and generally earn less than similar students at public or private nonprofit schools."
"The for-profit sector disproportionately serves older students, women, African-Americans, Latinos, and those with low incomes, according to the report “The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators?” published by Harvard’s National Bureau of Economic Research. "
"African Americans account for 13 percent of all students in higher education, but they are 22 percent of those in the for-profit sector. Latinos are 15 percent of those in the for-profit sector, yet 11.5 percent of all students. Women are 65 percent of those in the for-profit sector. For profit students are older, about 65 percent are 25 years and older, whereas just 31 percent of those at four-year public colleges are and 40 percent of those at two-year colleges are."
"“[For-profit colleges] do better in terms of first-year retention and the completion of shorter certificate and degree programs,” according to the report. “But their first-time postsecondary students wind up with higher debt burdens, experience greater unemployment after leaving school and, if anything, have lower earnings six years after starting college than observationally similar students from public and non-profit institutions."
“Not surprisingly, for-profit students end up with higher student loan default rates and are less satisfied with their college experiences. The report also found for-profit students have substantially higher default rates even when comparing students across school types with similar cumulative debt burdens."
"The for-profit sector disproportionately serves older students, women, African-Americans, Latinos, and those with low incomes, according to the report “The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators?” published by Harvard’s National Bureau of Economic Research. "
"African Americans account for 13 percent of all students in higher education, but they are 22 percent of those in the for-profit sector. Latinos are 15 percent of those in the for-profit sector, yet 11.5 percent of all students. Women are 65 percent of those in the for-profit sector. For profit students are older, about 65 percent are 25 years and older, whereas just 31 percent of those at four-year public colleges are and 40 percent of those at two-year colleges are."
"“[For-profit colleges] do better in terms of first-year retention and the completion of shorter certificate and degree programs,” according to the report. “But their first-time postsecondary students wind up with higher debt burdens, experience greater unemployment after leaving school and, if anything, have lower earnings six years after starting college than observationally similar students from public and non-profit institutions."
“Not surprisingly, for-profit students end up with higher student loan default rates and are less satisfied with their college experiences. The report also found for-profit students have substantially higher default rates even when comparing students across school types with similar cumulative debt burdens."
Michael Moore on Student Debt "Debtor's Prison"
"Michael Moore is talking about student loans,
and how students start their lives with a financial handicap."
EDU Debtors Union:
"Walk Away From Student Debt"
"Walk Away From Student Debt"
"Come together! And refuse to participate in a system
that is making it impossible to get out of debt."
The Debtor & The Union: Life After Education by Monica Johnson
"Presently, EDU Debtors Union is a proposition
and a website focused on this question:
“Who are student debtors and do they want to create a union?”
and a website focused on this question:
“Who are student debtors and do they want to create a union?”
"Further, what would that union do?
How might it benefit and support debtors?
What are the goals of that union?"
How might it benefit and support debtors?
What are the goals of that union?"
Arise, Students of California ! by Ralph Nader
"Students of California, arise, you have nothing to lose but a crushing debt!"
"The corporate state of California, ever ready to seize its ideological and commercial hour during a recession, has a chokehold on California’s public universities. With its tax-coddled plutocracy and a nod to further corporatization, the state government has taken the lid off tuition increases big time."
"The corporate state of California, ever ready to seize its ideological and commercial hour during a recession, has a chokehold on California’s public universities. With its tax-coddled plutocracy and a nod to further corporatization, the state government has taken the lid off tuition increases big time."
"Before and right after World War II the idea of a public university included a then-called “educational fee” close to zero, from city college of New York to UC Berkeley. Old timers now look back at those days as economic life-savers toward a degree and a productive life for them and the American economy."
"No more. Those gates of opportunity are crumbling at an accelerating pace. More street protests by students are focusing on relentless tuition hikes and years of repaying student debt loans while the rich get richer and the tax cuts for the rich are extended. As Mike Konzcal writes, “One of the Occupy movements’ major objectives is combating the privatization of public higher education and its replacement with a debt-fueled economy of indenture.”"
"But the students have a very powerful unused tool of direct democracy – they can qualify an initiative on the ballot that would set tuition at affordable levels or even become like some leading European countries where free schooling extends through the university years."
"There are other states where students can establish a legal protection for publically accessible universities by enacting statewide initiatives. All these tools of democracy should be obvious to any high school student were functional civics and democratic practices taught with the same fervor devoted to computer training."
"So let’s see if California’s deteriorating public university systems can be rescued by their undergraduate and graduate students who place the priority of accessible, adequate public higher education where it belongs for the longer run."
"But the students have a very powerful unused tool of direct democracy – they can qualify an initiative on the ballot that would set tuition at affordable levels or even become like some leading European countries where free schooling extends through the university years."
"There are other states where students can establish a legal protection for publically accessible universities by enacting statewide initiatives. All these tools of democracy should be obvious to any high school student were functional civics and democratic practices taught with the same fervor devoted to computer training."
"So let’s see if California’s deteriorating public university systems can be rescued by their undergraduate and graduate students who place the priority of accessible, adequate public higher education where it belongs for the longer run."
Occupy Student Debt #1
"We are the 99%! We could not all be mythical bootstraps college students. Tuition costs have risen 600% between 1980 and 2010. Wages, of course, did not keep up. The predatory for-profit student loan industry has lobbied Congress to strip away necessary consumer protections, allowing our debt to snowball out of control."
College Debt? Where is your Sugar Daddy?
"Back in 2006, when the website first started, 25 percent of the sugar babies were college students, we have seen that number increase to about 35-40 percent just in the last few years alone"
"An anonymous Ivy League college grad RT spoke with, is facing tens of thousands of dollars worth of debt. With no job and financial aid, she wants a sugar daddy."
“Given hikes in tuition, and the current state of the economy, more and more people are looking for alternative ways to finance their educations. There are plenty of young men looking to date older women."
Michael Moore on Student Debt: 'The Boot on Your Neck'
"Filmmaker Michael Moore argues in support of Occupy Wall Street protestors angry about high student loan payments. "What a wonderful thing to do to twenty-two-year-olds," says Moore, sarcastically. "Send them out into the world with crushing debt.""
BBC: Students turning to prostitution to fund studies
"Greater numbers of students in England are turning to prostitution to fund their education, the National Union of Students (NUS) claims. The NUS also says students are turning to gambling and taking part in medical experiments to fund their studies."
"In an economic climate where there are very few jobs, where student support has been massively cut, people are taking more work in the informal economy, such as sex work. It's all dangerous unregulated work, simply so people can stay in education."
"The English Collective of Prostitutes, which runs a helpline from its base in London, says the number of calls it receives from students had at least doubled in the past year. "They [ministers] know that the cuts they're making are driving women into things like sex work. It's a survival strategy so we would hold the government responsible for that.""
"Eighteen-year-old Clare - not her real name - turned to escorting during her A-levels when she found out her education maintenance allowance (EMA) was in danger of being cut. "I had a friend who'd been trying to get me to join his escort agency since I was 16. He was telling me stories about how much I could earn, how the hours would fit around me, that I could control who I saw, when I saw them and how often. It just sounded more desirable. I couldn't see any other option. Clare, who has now left the adult industry to continue her studies, warns against working in the sex industry. "I did this so I could go to college, go to university, for it to have a positive effect on the rest of my life.
"But I'm a different person to how I was when I started out. I've lost a lot of my confidence and I've lost trust in a lot of people.
"In an economic climate where there are very few jobs, where student support has been massively cut, people are taking more work in the informal economy, such as sex work. It's all dangerous unregulated work, simply so people can stay in education."
"The English Collective of Prostitutes, which runs a helpline from its base in London, says the number of calls it receives from students had at least doubled in the past year. "They [ministers] know that the cuts they're making are driving women into things like sex work. It's a survival strategy so we would hold the government responsible for that.""
"Eighteen-year-old Clare - not her real name - turned to escorting during her A-levels when she found out her education maintenance allowance (EMA) was in danger of being cut. "I had a friend who'd been trying to get me to join his escort agency since I was 16. He was telling me stories about how much I could earn, how the hours would fit around me, that I could control who I saw, when I saw them and how often. It just sounded more desirable. I couldn't see any other option. Clare, who has now left the adult industry to continue her studies, warns against working in the sex industry. "I did this so I could go to college, go to university, for it to have a positive effect on the rest of my life.
"But I'm a different person to how I was when I started out. I've lost a lot of my confidence and I've lost trust in a lot of people.
Who's Most Likely To Be In Debt In 2012?
"There can be little doubt that the U.S. is hovering on the edge of a recession as we head into 2012. This is forcing many social demographics to grapple with significant levels of debt, but who is most likely to suffer financial hardship as we head into a brand new year?"
"Household debt burdens have continued to fall through the last financial quarter. That said, there remains a significant level of household debt within the U.S., and this situation is unlikely to improve with unemployment expected to remain high throughout 2012."
"The issue facing families and homeowners in the U.S. is one of multiple debts and the prospect of having to prioritize what gets paid as a matter of urgency. When you consider that the average debt per household in the U.S. (not including mortgage repayments) stands at approximately $14,500, then you begin to understand the amount of repayments that may be missed in order to maintain a family home."
"It is all too easy to forget about student debt as the year draws to a close, but the fact remains that this is potentially even more of a threat to the U.S. economy in 2012. Mortgages can be sourced with an interest rate of as little as 5% in some instances. However, student loans are often available at rates of anywhere between 6.8% and 7.9%. This makes them considerably more expensive in comparison, especially given the fact that they do not secure a tangible assets or boast a specific value."
"This is not to say that education is not valuable. It is just that it does not offer the same level of financial security that a house or an automobile does. Student loans can live with graduates for an entire lifetime, and certainly hinder them as they enter an economy where unemployment is high and job creation is low. With student loans set to top the $1,000 billion mark for 2011, it is clear that an increasing number of students are attending college and therefore taking on an enormous amount of debt and financial liability. Considering the rising cost of loans bills and exaggerated rates of repayment, 2012 could be a worrying year for graduates and college students."
"An increasing number of U.S. citizens aged 60 and over are approaching retirement age heavily burdened by debt. Mortgages remain the most significant problem for this demographic. Thirty-nine percent of home-owners aged between 60 and 64 held primary mortgages in 2010, with a further 20% owning secondary mortgages. These figures had nearly doubled those recorded in 1994, revealing that an increasing number of citizens were still burdened with significant repayments well into their twilight years. This problem has only been exacerbated by the steep drop in housing value, which has left many with negative equity and facing difficult times ahead in 2012 and beyond."
"Household debt burdens have continued to fall through the last financial quarter. That said, there remains a significant level of household debt within the U.S., and this situation is unlikely to improve with unemployment expected to remain high throughout 2012."
"The issue facing families and homeowners in the U.S. is one of multiple debts and the prospect of having to prioritize what gets paid as a matter of urgency. When you consider that the average debt per household in the U.S. (not including mortgage repayments) stands at approximately $14,500, then you begin to understand the amount of repayments that may be missed in order to maintain a family home."
"It is all too easy to forget about student debt as the year draws to a close, but the fact remains that this is potentially even more of a threat to the U.S. economy in 2012. Mortgages can be sourced with an interest rate of as little as 5% in some instances. However, student loans are often available at rates of anywhere between 6.8% and 7.9%. This makes them considerably more expensive in comparison, especially given the fact that they do not secure a tangible assets or boast a specific value."
"This is not to say that education is not valuable. It is just that it does not offer the same level of financial security that a house or an automobile does. Student loans can live with graduates for an entire lifetime, and certainly hinder them as they enter an economy where unemployment is high and job creation is low. With student loans set to top the $1,000 billion mark for 2011, it is clear that an increasing number of students are attending college and therefore taking on an enormous amount of debt and financial liability. Considering the rising cost of loans bills and exaggerated rates of repayment, 2012 could be a worrying year for graduates and college students."
"An increasing number of U.S. citizens aged 60 and over are approaching retirement age heavily burdened by debt. Mortgages remain the most significant problem for this demographic. Thirty-nine percent of home-owners aged between 60 and 64 held primary mortgages in 2010, with a further 20% owning secondary mortgages. These figures had nearly doubled those recorded in 1994, revealing that an increasing number of citizens were still burdened with significant repayments well into their twilight years. This problem has only been exacerbated by the steep drop in housing value, which has left many with negative equity and facing difficult times ahead in 2012 and beyond."
Richard Wolff on the Euro Crisis with Thom Hartmann
"Professor Richard Wolff, New School University NYC joins Thom Hartmann. The Eurozone is creeping closer and closer to spiraling into an economic abyss. And the biggest economy in Europe has reservations about riding in on a white horse to save the day."
Sex workers in higher education
“I started stripping when I was 19 because I had huge debt. I was in a private college and I had student loan and credit card debt, and I decided that what was going on was ridiculous,” said Jane Doe, 32, a doctoral student at USC. Doe’s story is not atypical; according to a recent study on discussing sex work by Widener University’s Sarah Elspeth Patterson, M.Ed. The study notes that “10 percent of students know of students who engage in sex work in order to promote themselves financially, with 16.5 percent indicating that they might be willing to engage in sex work to pay for their education.”
"Sex workers, as defined by the Sex Worker Outreach Project (SWOP), are those who earn money by providing sexual services. This includes prostitution, erotic dancing, pornography, phone sex operators, fetish modeling and any other “transactional erotic labor.”
"For Jessie Nicole, 25, sex work was the only employment option that allowed her to make ends meet and remain a full-time student. “I was broke,” Nicole said. “I had a scholarship that paid my tuition and 70 percent of my books, but that doesn’t pay your rent, that doesn’t give you food, and you still have 30 percent of your books.” Nicole, now the director of SWOP’s Los Angeles chapter, began dating “sugar daddies” when she was a 19-year-old undergraduate at Florida State University, but turned to escorting when she moved to Chicago for graduate school."
"Though sex work helped pay for both Doe and Nicole’s schooling, the cost of education left each of them in an incredible amount of debt." Nicole said, "I’m still using sex work to pay off my student loans." Doe, who took a break between earning each of her degrees added, “(Sex work) was about school debt, even when I wasn’t in school. My student loans were $800 a month.”
"Though Doe has the ability to set her own schedule as both a stripper and a “sugar baby,” between her schoolwork, and participation in Occupy Los Angeles – where she was arrested during the police raid – the money she makes when she works does not allow her the ability to save."
"According to Doe, there is a class and racial disparity between sex workers."
“(Student workers are) mostly white, as far as I know,” Doe said. “There’s a really disturbing class divide amongst women who do sex for pay, between indoor and outdoor workers, and between whose bodies are most criminalized. And we aren’t. Very rarely do we go to jail for it. Black women and Latina(s) in particular, a lot of them are not going to have stories like (ours).”
"Sex workers, as defined by the Sex Worker Outreach Project (SWOP), are those who earn money by providing sexual services. This includes prostitution, erotic dancing, pornography, phone sex operators, fetish modeling and any other “transactional erotic labor.”
"For Jessie Nicole, 25, sex work was the only employment option that allowed her to make ends meet and remain a full-time student. “I was broke,” Nicole said. “I had a scholarship that paid my tuition and 70 percent of my books, but that doesn’t pay your rent, that doesn’t give you food, and you still have 30 percent of your books.” Nicole, now the director of SWOP’s Los Angeles chapter, began dating “sugar daddies” when she was a 19-year-old undergraduate at Florida State University, but turned to escorting when she moved to Chicago for graduate school."
"Though sex work helped pay for both Doe and Nicole’s schooling, the cost of education left each of them in an incredible amount of debt." Nicole said, "I’m still using sex work to pay off my student loans." Doe, who took a break between earning each of her degrees added, “(Sex work) was about school debt, even when I wasn’t in school. My student loans were $800 a month.”
"Though Doe has the ability to set her own schedule as both a stripper and a “sugar baby,” between her schoolwork, and participation in Occupy Los Angeles – where she was arrested during the police raid – the money she makes when she works does not allow her the ability to save."
"According to Doe, there is a class and racial disparity between sex workers."
“(Student workers are) mostly white, as far as I know,” Doe said. “There’s a really disturbing class divide amongst women who do sex for pay, between indoor and outdoor workers, and between whose bodies are most criminalized. And we aren’t. Very rarely do we go to jail for it. Black women and Latina(s) in particular, a lot of them are not going to have stories like (ours).”
Surging student loan debt threatens homeownership
"Student loans are going to be yet another hurdle for the housing market to overcome," Palacios said. "Faced with mounting student loan debt, poor job prospects and stagnant wages, an increasing number of people aged 25 to 34 have moved back in with their parents." According to John Burns, almost 6 million 25- to 34-year-olds now live with mom and dad. This number is up 26% from 2007."
"The current rate of homeownership rate for this demographic stands at a 10-year low for under 30s. The rate for 30- to 34-year-olds is even worse, at its lowest rate in 17 years. "The debt load is so high, and the job outlook so bleak, that student loan default rates have almost doubled," he wrote in a note to clients. "With the economy little improved since 2009 default rates are bound to rise further.""
"This number is greater than all credit card debt outstanding, and second only to mortgages in terms of total national debt."
"The current rate of homeownership rate for this demographic stands at a 10-year low for under 30s. The rate for 30- to 34-year-olds is even worse, at its lowest rate in 17 years. "The debt load is so high, and the job outlook so bleak, that student loan default rates have almost doubled," he wrote in a note to clients. "With the economy little improved since 2009 default rates are bound to rise further.""
"This number is greater than all credit card debt outstanding, and second only to mortgages in terms of total national debt."
White Americans Now Have 20 Times the Wealth of Black Americans
"The median wealth of white households in America is now 20 times that of black households and 18 times the wealth of Latino households, according to a new study from the Pew Research Center. And in case you're thinking that means whites have $1 million while blacks only have $50,000, think again: The typical net worth of a white household is $113,000 while the typical net worth for a black household is a paltry $5,600, not even the cost of a new car."
"This is the biggest wealth gulf between the three groups since the government started collecting the data 25 years ago. It's also two times the size the divide was for the 20 years that led up to the latest economic downturn. Why? Because when the housing market bubble burst, minorities, who had been preyed upon by unethical lenders, were disproportionately affected. From 2005 to 2009, inflation-adjusted median wealth for blacks and Latinos cratered 53 percent and 66 percent, respectively. Among whites, that drop was only 16 percent."
"This is the biggest wealth gulf between the three groups since the government started collecting the data 25 years ago. It's also two times the size the divide was for the 20 years that led up to the latest economic downturn. Why? Because when the housing market bubble burst, minorities, who had been preyed upon by unethical lenders, were disproportionately affected. From 2005 to 2009, inflation-adjusted median wealth for blacks and Latinos cratered 53 percent and 66 percent, respectively. Among whites, that drop was only 16 percent."
Plato’s Republic and Student Loan Debt Refusal by George Caffentzis
"The political problem posed by this moral attitude to debt repayment is that it touched a raw nerve in many student loan debtors who have been ashamed by their inability to pay off their loans. This shame has led many to try to cover up and not talk to others (even family members) about their plight. According to my research concerning previous student loan debt abolition efforts, one of the key reasons they have not been successful has been their inability to overcome debtors’ characteristic shamed silence that is profoundly anti-political because it turns the collective problem of debt repayment into an individual issue to be dealt with one person at a time. Consequently, this moral criticism had to be dealt with directly and decisively if the Occupy Student Debt effort was not to meet a similar fate, since this criticism not only makes it difficult to move the critics, but it has a problematic effect on many debtors who are already vulnerable to the mental blackmail implicit in the “debt moralists’” assertions."
"If Plato’s Republic marks the beginning of political philosophy, then debt payment refusal appears at the beginning of the beginning of political philosophy. Plato, the aristocratic darling of conservative thinkers, actually defends debt payment refusal in the Republic. Plato’s concern with debt should not be surprising, since indebtedness leading to debt slavery was the source of civil wars and revolutions throughout ancient Greek history from 600BC on. Solon, the famous Athenian law-giver, aimed to stop the endless turmoil caused by the cycle of debt-enslavement-revolution-debt and the ever reigniting class war between the poor debtors and the creditor plutocrats that was leading Athens to catastrophe. He did so by legislating the end of debt slavery, a move that led to the democratization of the Athenian state, and increasingly the remuneration of citizens for their public work (especially for their participation in the administration of justice and legislation, which required attending general assemblies and being part of juries, like the jury of 800+ that decided Socrates’ trial)."
"Universalizing the kernel of Socrates’ rejoiner to Kephalos’ definition, we come to the following maxim: one should refuse to repay a loan when the payment will lead to evil or unjust consequences that far outweigh what fairness would result from its payment."
"We too must respond to the categorical imperative of debt moralists in the same way that Socrates responded to Kephalos’ definition of justice, with an emphatic “it depends.”
"First, it depends on whether student loans are unjust in and of themselves qua loans. On this count, the actual mechanisms of student loan debt speak decisively."
"Second, it depends on whether the collective good is served by repayment. There is no doubt that restoring a tuition-free university system and avoiding a further polarization of society requires that we end the present student debt system."
"Third, it depends on whether the education and knowledge student loans are intended to pay for ought be commodities in the first place. If most universities are not supposed to profit from the education they provide and the knowledge they disseminate, why should ancillary financial institutions profit from them instead?"
"“Wouldn’t canceling all student loan debt be unfair to all those people who struggled to pay back their student loans?” For as David Graeber retorted in his important book, Debt: The First 5000 Years, this argument is as foolish as saying that it is unfair to a mugging victim that his/her neighbors were not mugged as well! (p. 389) Plato would agree."
"If Plato’s Republic marks the beginning of political philosophy, then debt payment refusal appears at the beginning of the beginning of political philosophy. Plato, the aristocratic darling of conservative thinkers, actually defends debt payment refusal in the Republic. Plato’s concern with debt should not be surprising, since indebtedness leading to debt slavery was the source of civil wars and revolutions throughout ancient Greek history from 600BC on. Solon, the famous Athenian law-giver, aimed to stop the endless turmoil caused by the cycle of debt-enslavement-revolution-debt and the ever reigniting class war between the poor debtors and the creditor plutocrats that was leading Athens to catastrophe. He did so by legislating the end of debt slavery, a move that led to the democratization of the Athenian state, and increasingly the remuneration of citizens for their public work (especially for their participation in the administration of justice and legislation, which required attending general assemblies and being part of juries, like the jury of 800+ that decided Socrates’ trial)."
"Universalizing the kernel of Socrates’ rejoiner to Kephalos’ definition, we come to the following maxim: one should refuse to repay a loan when the payment will lead to evil or unjust consequences that far outweigh what fairness would result from its payment."
"We too must respond to the categorical imperative of debt moralists in the same way that Socrates responded to Kephalos’ definition of justice, with an emphatic “it depends.”
"First, it depends on whether student loans are unjust in and of themselves qua loans. On this count, the actual mechanisms of student loan debt speak decisively."
"Second, it depends on whether the collective good is served by repayment. There is no doubt that restoring a tuition-free university system and avoiding a further polarization of society requires that we end the present student debt system."
"Third, it depends on whether the education and knowledge student loans are intended to pay for ought be commodities in the first place. If most universities are not supposed to profit from the education they provide and the knowledge they disseminate, why should ancillary financial institutions profit from them instead?"
"“Wouldn’t canceling all student loan debt be unfair to all those people who struggled to pay back their student loans?” For as David Graeber retorted in his important book, Debt: The First 5000 Years, this argument is as foolish as saying that it is unfair to a mugging victim that his/her neighbors were not mugged as well! (p. 389) Plato would agree."
Government leaves some students stuck in default
December 9, 2011
The Chronicle of Higher Education
Department's New Debt-Management System Leaves Some Students Stuck in Default
By Kelly Field
Washington
Problems with the Education Department's online system for managing student debt have cost taxpayers millions of dollars and left thousands of borrowers in financial limbo, unable to put their defaults behind them.
The department acknowledges the problems and says it's working to fix them.
Under federal law, defaulted borrowers who make nine on-time repayments on their student loans can have their loans restored to good standing and their credit histories cleared. Borrowers with such "rehabilitated" loans are eligible for deferments, forbearances, and income-based repayment rates, and can also receive new federal student aid.
The new debt-management system, which tracks and manages more than $33-billion in defaulted student loans owed by more than three million people, is supposed to rehabilitate borrowers each month. It has not done so since August, and some frustrated debtors have stopped making payments on their loans, risking a second default.
Lori Wagner is among them. She took on a second job to cover the $1,350 monthly payment on her defaulted loan and made her ninth payment in October. But her collection agency told her she has to keep paying until the department issues her a new loan, and it can't tell her when that will be.
Ms. Wagner says can't keep working 60 hours a week—it has left her sick and overtired, she says, and it's jeopardizing her full-time job. At this point, she says, she's prepared to default again and let the government garnish her wages. At least, she says, the monthly payment would be lower. "I kept my end of the agreement," she wrote to the National Consumer Law Center. "I am tired, sick, uncaring, and done with this student-loan crap ... just simply done with the whole farce of rehabilitation."
Department's New Debt-Management System Leaves Some Students Stuck in Default
By Kelly Field
Washington
Problems with the Education Department's online system for managing student debt have cost taxpayers millions of dollars and left thousands of borrowers in financial limbo, unable to put their defaults behind them.
The department acknowledges the problems and says it's working to fix them.
Under federal law, defaulted borrowers who make nine on-time repayments on their student loans can have their loans restored to good standing and their credit histories cleared. Borrowers with such "rehabilitated" loans are eligible for deferments, forbearances, and income-based repayment rates, and can also receive new federal student aid.
The new debt-management system, which tracks and manages more than $33-billion in defaulted student loans owed by more than three million people, is supposed to rehabilitate borrowers each month. It has not done so since August, and some frustrated debtors have stopped making payments on their loans, risking a second default.
Lori Wagner is among them. She took on a second job to cover the $1,350 monthly payment on her defaulted loan and made her ninth payment in October. But her collection agency told her she has to keep paying until the department issues her a new loan, and it can't tell her when that will be.
Ms. Wagner says can't keep working 60 hours a week—it has left her sick and overtired, she says, and it's jeopardizing her full-time job. At this point, she says, she's prepared to default again and let the government garnish her wages. At least, she says, the monthly payment would be lower. "I kept my end of the agreement," she wrote to the National Consumer Law Center. "I am tired, sick, uncaring, and done with this student-loan crap ... just simply done with the whole farce of rehabilitation."
NASDAQ: Student loans, America's next financial crisis
Update: This article was removed from the NASDAQ site within 48 hours after its appearance. The cached copy of the complete article has been placed in the second half of this post.
"The problem of rising and unsustainable student loan debt remains largely unacknowledged by the powers that be, though it's a vital cause to many protesters in the Occupy movement."
"The standard argument is that student loans can't be dischargable, because there's nothing to secure them - you can't repossess someone's education. However, the financial industry has used its characteristic ingenuity to find a way around that - in effect, the collateral for student debt is now a lifetime of the debtor's labor, rendered via an unforgiving architecture of wage garnishings, penalties and a pervasive culture of shame. Perhaps the most worrying part of this burgeoning crisis is that it's now understood that many, perhaps most, current students won't be able to pay down their loans."
"And the financiers know exactly what's happening. In a Wall Street Journal article from last month, a hedge fund manager with expertise in the $242 billion student loan-backed bond market (sound familiar?) said he refused to get involved with assets backed by recent student loans because he "can't quantify the risk ." The historical average for default rates figured on a quarter to a third of loans going bust, but another trader said that will probably rise to 40 percent or higher, depending on economic conditions."
"Rising costs are one side of the coin. According to the College Board, tuition costs are set to continue shooting upwards. In-state tuition and fees at public four-year institutions were up by 8.3 percent at $8,244 per year in the 2011-12 year, while private tuition and fees rose 4.5 percent to $28,500."
"On the other side of the coin is unemployment. Among the 16-24 year-old cohort, that now stands at 18 percent; for those 16-19, it's above 25 percent, with a participation rate of less than half. Young people can't get jobs before college, can barely find work during their school years and then face a terrifying job market upon graduation - if they graduate at all."
"The ingredients: nearly a trillion dollars of debt on the books, rising tuition costs, a youth employment market in crisis, undischargeable debt, government-guaranteed loans and an asset -backed bond market worth a quarter of a trillion dollars."
"The problem of rising and unsustainable student loan debt remains largely unacknowledged by the powers that be, though it's a vital cause to many protesters in the Occupy movement."
"The standard argument is that student loans can't be dischargable, because there's nothing to secure them - you can't repossess someone's education. However, the financial industry has used its characteristic ingenuity to find a way around that - in effect, the collateral for student debt is now a lifetime of the debtor's labor, rendered via an unforgiving architecture of wage garnishings, penalties and a pervasive culture of shame. Perhaps the most worrying part of this burgeoning crisis is that it's now understood that many, perhaps most, current students won't be able to pay down their loans."
"And the financiers know exactly what's happening. In a Wall Street Journal article from last month, a hedge fund manager with expertise in the $242 billion student loan-backed bond market (sound familiar?) said he refused to get involved with assets backed by recent student loans because he "can't quantify the risk ." The historical average for default rates figured on a quarter to a third of loans going bust, but another trader said that will probably rise to 40 percent or higher, depending on economic conditions."
"Rising costs are one side of the coin. According to the College Board, tuition costs are set to continue shooting upwards. In-state tuition and fees at public four-year institutions were up by 8.3 percent at $8,244 per year in the 2011-12 year, while private tuition and fees rose 4.5 percent to $28,500."
"On the other side of the coin is unemployment. Among the 16-24 year-old cohort, that now stands at 18 percent; for those 16-19, it's above 25 percent, with a participation rate of less than half. Young people can't get jobs before college, can barely find work during their school years and then face a terrifying job market upon graduation - if they graduate at all."
"The ingredients: nearly a trillion dollars of debt on the books, rising tuition costs, a youth employment market in crisis, undischargeable debt, government-guaranteed loans and an asset -backed bond market worth a quarter of a trillion dollars."
Student Debt: Colleges, or Country Clubs?
"Over the past thirty years, the cost of attending college has risen steadily at a rate of about six percent each year. College tuition costs have outpaced inflation and health care spending, even in periods of recession. But as student debt grows, the money that many colleges spend on administration has risen faster than the amount that goes directly to education, and colleges continue to spend money on unnecessary amenities."
"Scripps Assistant Professor of Economics Sean Flynn thinks that the increasing costs are a result of simple economics. “What I think happened is the actual costs of delivering education—the real costs like time of teachers in the classroom and renting square footage of space—really haven’t gone up that much over time. What has really gone up is the demand,” Flynn said. A college education has become increasingly important for success, so more people are demanding seats in the nation’s classrooms. This extreme demand creates a system in which colleges have zero incentive to decrease costs to students."
"Additionally, Flynn thinks that the competition engendered by the extra high demand for a college education creates an incentive to inundate a campus with what he calls “massive layers of bureaucracy.” “The scariest number I’ve seen is that in the Cal State system between 1970 and 2008 … the number of faculty only went up three percent, but the number of administrators went up 237 percent,” Flynn explains. “The entire educational system has had massive amounts of money thrown at it and most of it has gone to things that have not improved the actual educational outcomes.”
"The high-cost system has created an environment in which high levels of loans and debt are the norm. This debt brings with it two problems: First, it traps those most interested in improving their standard of living and working hard with mountains of debt. Being tied to a loan that must be repaid makes it hard for students to take jobs at non-profit organizations or go to graduate school. Instead, students are locked into unfulfilling jobs that help to pay the bills, if they can find a job at all. Second, because student loans are implicitly required for many middle class students to attend expensive schools, students from backgrounds or cultures that admonish debt are less likely to attend the most expensive — and sometimes best – schools. “The debt is definitely discouraging a lot of people from going to college,” explains Flynn. “People in society – even if they know nothing else about college – now think of it as hideously expensive. That’s got to discourage kids [who are considering college].”
"As the cost of college rises and more and more students from middle class, poor, and minority backgrounds choose not to attend elite and expensive universities, we lose out on an important part of a liberal arts education. Class diversity decreases with the rising costs of college, and students sacrifice a variety of opinions and worldviews in the classroom that can provide invaluable perspectives on class material. As we allow costs to rise and take out loans to support the extravagant luxury resorts we call schools, we simultaneously exclude huge portions of the United States from participating in our discussions, from living in our dorms, and from reaping the benefits of education."
"Scripps Assistant Professor of Economics Sean Flynn thinks that the increasing costs are a result of simple economics. “What I think happened is the actual costs of delivering education—the real costs like time of teachers in the classroom and renting square footage of space—really haven’t gone up that much over time. What has really gone up is the demand,” Flynn said. A college education has become increasingly important for success, so more people are demanding seats in the nation’s classrooms. This extreme demand creates a system in which colleges have zero incentive to decrease costs to students."
"Additionally, Flynn thinks that the competition engendered by the extra high demand for a college education creates an incentive to inundate a campus with what he calls “massive layers of bureaucracy.” “The scariest number I’ve seen is that in the Cal State system between 1970 and 2008 … the number of faculty only went up three percent, but the number of administrators went up 237 percent,” Flynn explains. “The entire educational system has had massive amounts of money thrown at it and most of it has gone to things that have not improved the actual educational outcomes.”
"The high-cost system has created an environment in which high levels of loans and debt are the norm. This debt brings with it two problems: First, it traps those most interested in improving their standard of living and working hard with mountains of debt. Being tied to a loan that must be repaid makes it hard for students to take jobs at non-profit organizations or go to graduate school. Instead, students are locked into unfulfilling jobs that help to pay the bills, if they can find a job at all. Second, because student loans are implicitly required for many middle class students to attend expensive schools, students from backgrounds or cultures that admonish debt are less likely to attend the most expensive — and sometimes best – schools. “The debt is definitely discouraging a lot of people from going to college,” explains Flynn. “People in society – even if they know nothing else about college – now think of it as hideously expensive. That’s got to discourage kids [who are considering college].”
"As the cost of college rises and more and more students from middle class, poor, and minority backgrounds choose not to attend elite and expensive universities, we lose out on an important part of a liberal arts education. Class diversity decreases with the rising costs of college, and students sacrifice a variety of opinions and worldviews in the classroom that can provide invaluable perspectives on class material. As we allow costs to rise and take out loans to support the extravagant luxury resorts we call schools, we simultaneously exclude huge portions of the United States from participating in our discussions, from living in our dorms, and from reaping the benefits of education."
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