President Obama recently signed into law a $787 billion stimulus package on top of Bush's grossly mismanaged $700 billion TARP bailout from last September. Several weeks ago, the Federal Reserve basically printed an additional $1,000,000,000,000 to inject more funds into the monetary system which will undoubtedly have the effect of diminishing the purchasing power of the dollar. Since last fall, the government has paid out trillions of dollars in bailouts, handouts, loans and giveaways, with no end in sight as our leaders try anything and everything to try and get our spiraling economy under control. While some of what Washington has already done may act to stimulate the economy, much of the trillions of dollars already spent will, no doubt, turn out to be just money wasted.
Tax rebate checks do not stimulate the economy - history shows that people either spend such rebates on paying off credit card debt, or they simply save them, doing little to nothing to stimulate the economy. Presumably, that is why they were removed from the final version of the stimulus bill. The tax cuts that were included, however, amount to a whopping $44 per month for the rest of 2009, decreasing to an even more staggering $33 per month in 2010. This is hardly "relief" as it is likely to help nobody.
The Wall Street financial institutions, auto manufacturers, insurance companies and countless other irresponsible actors have now received TRILLIONS of taxpayer dollars(as demonstrated above, that's a number with *12* zeros at the end of it) to bail them out of their self-created mess. This, too, does nothing to stimulate the economy. It merely rewards bad behavior and does nothing to encourage institutional change. There is a better way.
How many times have we heard from our leaders in Washington that education is the key to solving all of our underlying societal problems? The so-called "Silver Bullet." For decades, presidents, senators and members of Congress have touted themselves as champions of education, yet they've done nothing to actually encourage the pursuit of one on an individual level.
Some of us have taken advantage of Federal Stafford Loans and other programs, including private loans, to finance higher education, presumably with the understanding that an advanced degree equates with higher earning power in the future. Many of us go into public service after attaining such degrees, something that's also repeatedly proclaimed as something society should encourage. Yet, the debt we've accrued to obtain such degrees have crippled our ability to reap the benefits of our educations, causing many to make the unfortunate choice of leaving public service so as to earn enough money to pay off that debt.
Our economy is in the tank. There isn't a reasonable economist alive who doesn't believe that the economy needs stimulating immediately. The only debate now centers on how to go about doing it. While the new stimulus plan contains some worthy provisions, very little of it will have a significant and immediate stimulating effect on the economy. The Obama Administration itself doesn't expect to see an upsurge in the economy until mid-to-late 2010.
Instead of funneling billions, if not trillions of additional dollars to banks, financial institutions, insurance companies and other institutions of greed that are responsible for the current economic crisis, why not allow educated, hardworking, middle-class Americans to get something in return? After all, they're our tax dollars too!
Forgiving student loan debt would have an immediate stimulating effect on the economy. Responsible people who did nothing other than pursue a higher education would have hundreds, if not thousands of extra dollars per month to spend, fueling the economy now. Those extra dollars being pumped into the economy would have a multiplying effect, unlike many of the provisions of the new stimulus package. As a result, tax revenues would go up, the credit markets will unfreeze and jobs will be created. Consumer spending accounts for over two thirds of the entire U.S. economy and in recent months, consumer spending has declined at alarming, unprecedented rates. Therefore, it stands to reason that the fastest way to revive our ailing economy is to do something drastic to get consumers to spend.
This proposal would quickly revitalize the housing market, the ailing automobile industry, travel and tourism, durable goods and countless other sectors of the economy because the very people who sustain those sectors will automatically have hundreds or, in some cases, thousands of extra dollars per month to spend. The driving factor in today's economy is fear. Unless and until the middle class feels comfortable enough that they'll have their jobs, health insurance and extra money to spend not only next month, but the month after that, etc., the economy will not, indeed, cannot grow fast enough to stop the hemorrhaging.
Let me be clear. This is not about a free ride. This is about a new approach to economic stimulus, nothing more. To those who would argue that this proposal would cause the banking system to collapse or make student loans unavailable to future borrowers, please allow me to respond. I am in no way suggesting that the lending institutions who carry such debts on their balance sheets get legislatively shafted by having them wiped from their books. The banks and other financial institutions are going to get their money regardless because, in addition to the $700 TARP bailout, more bailout money is coming their way. This proposal merely suggests that in return for the trillions of dollars that has been and will continue to be handed over to the banks, educated, hardworking Americans who are saddled with student loan debt should get some relief as well, rather than sending those institutions another enormous blank check. Because the banks are being handed Trillions of dollars anyway, there would be no danger of making funds unavailable to future borrowers.
To avoid the moral hazard that this plan could potentially create, going forward, the way higher education in this country is financed MUST be reformed. Requiring students to amass enormous debt just to receive an education is an untenable approach, as demonstrated by the ever-growing student loan default rates. Having a loan-based system rather than one based on grants and scholarships or, ideally, public funding, has, over time, begun to have the unintended consequence of discouraging people from seeking higher education at all. That is no way for America to reclaim the mantle of the land of opportunity.
A well-educated workforce benefits society as a whole, not just the students who receive a higher education. It is often said that an undergraduate degree today is the equivalent of a high school diploma 30 or 40 years ago. Accepting the premise as true that society does, in fact, place the same value on an undergraduate degree today as it did on a HS diploma 30 or 40 years ago, then what is the rationale for cutting off public funding of education after the 12th grade? It seems to me that there is some dissonance in our values that needs to be reconciled. That, however, cannot come to pass until the millions of us already shackled with student loan debt are freed from the enormous economic burdens we're presently carrying.
Many of the vocal nay-sayers to this proposal seem intent on ignoring the fact that Washington IS going to spend trillions of dollars, likely in the form of handing blank checks over to more and more banks, as a way of getting the economy under control. Normative assessments of how things should be are fine, but they don't reflect reality. Accepting the premise that Washington will spend Trillions of dollars in unprecedented ways (a good portion of which will just be trial and error, since we're in uncharted waters), what is the argument against directly helping middle class people who are struggling, rather than focusing solely on the banks and other financial institutions responsible for crisis to begin with?
Further accepting that there is an aggregate amount of outstanding student loan debt totaling approximately $550 Billion, (that's Billion with a B, not a T), one is forced to ask again, what is the objection to helping real people with real hardships when all we're talking about is a relative drop in the bucket as compared with what will be spent to dig us out of this hole?
In a perfect world, I share these biases towards personal responsibility and having people pay back what they owe and making good on the commitments they've made. But we don't live in a perfect world and the global economy, not just the U.S. economy, is in a downward spiral, the likes of which nobody truly knows how to fix.
This proposal will immediately free up money for hardworking, educated Americans, giving them more money in their pockets every month, addressing the very real psychological aspects of the recession as much as the financial ones. Is it the only answer? No, of course not. But could it help millions of hardworking people who struggle every month to get by? Absolutely. Given the current economic climate, as well as the plans to spend trillions of additional dollars that are in the works, one must wonder what is so objectionable about giving a real helping hand to real people with real struggles.
2009 and the new Obama Administration is supposed to be about change. Nothing in the new economic stimulus package represents a significant departure from the way Washington has always operated - it's merely a different set of priorities on a higher scale, but it's certainly not materially different from any other economic stimulus package passed during the past few decades. Washington cannot simply print and borrow money to get us out of this crisis. We The People, however, can get this economy moving NOW. All we need is relief from debt that was accrued under the now-false promise that higher education equates with higher earnings.
Free us of our obligations to repay our out-of-control student loan debt and we, the hardworking, middle-class Americans who drive this economy will spend those extra dollars now.
If you believe that there's a better way of climbing out of this economic crisis, one that empowers us to directly spend money, start businesses, free up credit and create jobs, then please join this group and encourage others to do so as well. There's strength in numbers - the more people to join this group, the louder our voices and the greater the chances of being heard by President Obama and Congress.
Support real change we can believe in!
I was never a dumb kid and & I never went to a school where I couldn't justify the price of tuition. I am so sick & tired of old idiots who went to college in the 1970s telling me I should have worked my way through school & not gone to a school I couldn't afford. Really? Well I did work through school, ever since I was 16 years old I started working and I never stopped. But it doesn't take a rocket scientist to figure out if you're making minimum wage, or even waiting tables, like I was, you can't afford $20k + a year for tuition.
This is my story:
I was always an equally ambitious & suspicious child. I worked many part time jobs throughout high school, opened up a savings account and had my first credit card at age 17. I was always enrolled in all Ap/ honors classes and lead many after school clubs/ activities. I did a lot of community service. I graduated with over a 4.0 and 4th in my high school class of over 300 people. I wanted to go to Boston University and study business. I got accepted and did all my research. The school wouldn't give me enough financial aid and it was $40k per year in 2002! My parents wanted me to realize my dreams because they saw how hard I worked every minute of my young little life. They were ready to mortgage their house so I could get the education I wanted. I said no. Instead, I went to a great private school, the University of Richmond in VA, where the school gave me enough grant money so my out of pocket expense was very minimal. I was thrilled! I loved the school & I loved learning! I intently soaked up everything every professor ever said to me in class. Everyone was so kind, intelligent and cultured at my undergrad I was so proud to be a part of it. Of course, unlike my wealthier counterparts, I had three part time jobs during undergrad to pay for books and other ancillary expenses. I worked at a coffee shop, in a catering hall, and at a restaurant on campus. I worked with a smile on my face because I was given the opportunity to work & thus sustain this most amazing opportunity! Furthermore, every summer I worked full time in my home town and put away money for the next semester in the year to come. Of course to be more marketable (and because I thoroughly loved school !) I took on two majors- (1) Business Administration and (2) Communications. I also had a minor in Marketing. I studied abroad for a semester, volunteered, and took part in many on campus groups. By the time I graduated, I was $12,000 in debt. However, I knew how to command the attention of a room, speak eloquently, I knew accounting, finance, I could do calculus with ease, I was in touch with the most recent technological advances in the workplace, I could analyze the stock market and the health of publicly traded companies, I could form an educated opinion on a myriad of controversial topics ect. ect. ect.
Unbeknownst to me, however, none of this mattered. I applied up and down the East Coast, West Coast, Internationally, and the only place that offered me a non-commission based sales job door to door offered me $32,000/year. Given the hours I had to put in, it came to under $12/ hour. I moved in with my parents, I purchased an extremely cheap/ old vehicle and I saved every pay check. Within a year, I paid off my undergraduate loan. But this all taught me a great lesson. There were no decent jobs with a mere bachelors degree, it doesn't matter that I went to a REAL school and knew how to do a lot of USEFUL things. I always wanted to save people from the injustices of modern society, so I enrolled in law school. Surely this would be an opportunity to learn so much more and finally qualify for a job where I can afford to live on my own. So, I applied and I went after carefully weighing every option & only going to the best logical choice of schools. I went to an accredited law school that had a very high bar passage rate & employment rate after 6 months of graduation. I studied for my LSATS, I got a decent score & I had a scholarship while in law school. I went to the best option of schools. The area had the lowest standard of living, offered me the most money and would be my cheapest option. Besides law school, I thought, I have to be sure my time spent in school is worthwhile so at night, while most of my peers were doing their law school assignments I took MBA classes and concluded both of my graduate/professional courses of study in 2.5 years. Even with a scholarship and borrowing the most meager amount necessary to live in an impoverished area of town, my debt is $160,000. Now, despite graduating with honors and being a licensed attorney and an MBA graduate, there are no jobs. The economy went down the drain & there's no job security in any market for new grads. Many of my newly licensed peers get jobs only to be let go 2 months later after the firm doesn't need the extra help. Most of us work for temp agencies, just like everybody else. You never know how you're going to pay your bills for necessities, never mind this rigid, looming, overgrown debt. The positions that I qualify for aren't hiring. The state prosecutor's office is hiring at $38k/ year in the area, but even there you'll find a long line of people waiting to be given the opportunity to be interviewed most of whom have many more years experience in the field than myself. So how is it that after being painstakingly careful and doing all the "right" things and studying in all the "marketable" subject areas, I'm on the unemployment line just like everybody else??? I guess it's not that some people did it right and others did it wrong. I just think the system is broken & the youth of America is penalized for wanting to realize their potential. I'm not talking about students who were dumb as rocks going to a clown school part time wondering why they can't pay their loans and don't have jobs. I'm talking about every student who had the ability and potential and did everything in their power to excel. Why are we being punished? We are the modern day indentured servitude system.
I owe over 200k for private student loans. Windham professionals took over the account when I defaulted. I admit that I made all the wrong choices in life. I went to a school that I was not able to afford and took out Sallie Mae loans with cosigners (both my parents and my brother-in-law). I currently work full-time making $2,400 p/month after taxes but when you factor in my $1,000 p/month Windham obligation every month that does not leave enough for other things such as my car insurance ($300 p/month), gas (300 p/month), food (300 p/month), and other incidentals.
I live in one of the 5 boroughs of NYC but my job is located in Long Island which is an hour drive each way. Im 26 years old and cannot afford to move out of my parents house due to decisions I made when I was 17 years old. My girlfriend of over 5 years just left me because even she saw how hopeless my situation is. Cant blame her, she wanted a marriage and family, how can I provide that with my situation? I wouldve just been holding her back anyway.
One of the most depressing things about the situation of owning 200K plus in student loans is not so much the balance I owe but the fact that I have doomed my co-signers as collateral damage to my failures in life. My brother-in-law signed off on roughly 18k worth of the loans. He holds a security clearance for the federal government that cannot allow him to be in default. Windham offered to give him a co-signers release if I can come up with 12k but how can I possibly do this??? My parents are on the hook for over 100k as cosigners. Theyre both approaching 60 years old and having problems with their day-to-day expenses aswell, now theyre burdened with my student loans aswell.
My life feels like im treading water in the middle of the ocean waiting for someone to save me. But what will most likely happen is that I will get to a point where I can no longer swim and drown. That would be fine with me except for the fact that I will be drowning my own family aswell because they loved me and decided to cosign on these loans.
Everyday I make that payment to Windham (which does not even cover the accrued monthly interest) I look back at my decisions when I was young and dumb and ponder . . . what if. What if I ignored my HS guidance counselor and not attend a college I was not able to afford? What if I didnt change my major 2 times? What if my family could see past their blind love for me and not sign off as cosigners? What if I never went to college at all?
I have been wanting to commit suicide for over a year now because of my student loan balance. The irony is that my student loans are keeping me alive. If I kill myself my co-signers will be left to pay off my debt and I cannot leave my parents with an insurmountable debt they cannot afford to cover. I took out a life insurance policy hoping that I will get killed sometime soon as my families only hope of clearing this cancer I have bestowed upon them. Everyday I wish some drunk slammed into my car on the highway or some thug randomly shoots me dead, anything for that policy to kick in and release my family from this debt (suicide is not covered in life insurance).
I accept my failures in life and I am willing to meet my maker at a young age. Just please dont burden my family when I pass. That's all I want.. . leave my family alone.
To the rest of you guys struggling with your own student loan crisis. I sincerely hope everything works out so that you may get to enjoy your lives and start families. Family is most important and I hope you all cherish every moment you have with them. In my situation, family is the only thing keeping me alive . . . whether I want to live or not.
God bless you all and good luck . . .
waiting for a miracle
hopeless guy,
i completely understand where you are coming from. i am in the exact same boat. fortunately i am in a profession to where hopefully i can move up and will be able pay my loans one day. i owe 200k as well and am in no financial state to pay back what is expected of private loan terms. i have made poor financial decisions, never truly paid attention to what i was signing with the private loans with sallie mae (i was young and for once had a money!!)... also had my mother to cosign. over time, an enormous amount of interest has accrued (from 2005)since i initially took out the loans. and now my loans have doubled and are headed toward tripling. i owe 1200 a month just in interest. sadly, sallie mae will not work with me. i am a new graduate and am asking for every option available and they will not work with me. i have(2) options - one i can pay interest only or forbearance up to two years in three month intervals paying $150 per loan... but...but the interest will continue to accrue, which will surely have my initial loan amount that I BORROWED tripled. i am sick. it's all i think about. i am a single mom... wanted an opportunity to get caught up, provide a good living for my child, and save money for retirement, and get married. however, those goals and my dreams look very grim when i owe what i owe to sallie mae. i have no clue what to do either other than to periodically cry and continually pray for a new beginning... or a break... or some sign of relief for my future.
so, i am sorry you are experiencing the same thing. keep your head up. it's only money... and i do believe sallie mae will get theirs. plus, time will handle things... you will likely get married. your parents don't deserve this (nor does my mom) but we will all make it.
I agree with your statement above, our tax dollars should go back into our pockets. I'm a college graduate with student debt with sallie Mae hounding me for money. They expect me to pay 1100 a month toward my private loans, and 879 of it is the interest it is pure robbery. I could not find a job anywhere, I ended up moving to china away from my family amd friends amd do a job that I'm not happy with to just survive. Luckily it is cheap here md I can love, but I am forced to go find work in another country, rather then home and yet alone I can't even afford housing in america, will sallie Mae wanting me to pay the debt back, which I plan to, but cut me some slack, I had to leave home because of sallie Mae and im now in china working to pay my debt off slowly and I still have barely enough to even buy myself groceries. I now shop on the local market to save amd can't afford health insurance,or anything. I'm 27, this is not what I expected after college working dead long hours for nothing, I cannot save it all goes to sallie Mae, our government in the united states robs us students of our education and our money, amd they tell us go get a future goto college, for what misery and a death sentence to death amd high interest rate while sallie Mae CEO buys a golf course to put in his house amd our government bails out everyone but it's own people, some great system we live in our future looks great and our kids future looks even better if we keep this rate up, we are doomed until a solid candidate gets in congress that is for the people and not for personal gain.
I agree, something has to change. we are doomed until something does. i dare say many are in the same state we are in. how can they rob our future forever...
I went to a technical school, one of those ones that in six months you got a degree in a field of choice for me it was Medical Assisting. I was excited I always loved the medical field, and this was my way to get into it. my total loans were a lot less than many people that have posted here but now a 7K loan has increased to over 20K due to interest and my inability to pay. Why was I unable to pay you ask? When I graduated from the school, and received my licensing, my school was not accredited. I found this out after I had done a free three month externship for a doctor, and began looking for a full time job. When I contacted my job placement councilor she said she could not help me because I was not truly licensed. I tried to pay back the loans, having a child and very rarely being able to find work, I spoke to the loan company and was told that due to my situation the loan would be forgiven, I have even had a lawyer try and find it during a bankruptcy proceeding and he did not find it on my records, but now over 20 years later, they are docking my wages ( that amount to less than 10K a year) and taking my tax returns.
This is putting me in an extreme financial hardship I have contacted the department of education, as well as sent back the documents that they have requested to see if I can get a forgiveness on this debt. When contacting them I have gotten told they never received my paperwork and to send it again. I asked for another copy of the paperwork and never did get it in the mail. So tell me how it is that this is right or just. I support this action and hope with all my heart it goes through.
Thank you I have sent you an e-mail in reguards to your offer for a refferal.
Is there a way the government can control the price of colleges and institutions? Or should there be restrictions on how much it costs ? I purpose that there should be a cap of how much it can cost, and however far over the cap the government must pick up the rest? Easier said then done, but most colleges I assume are in a variety of categories, for instance, Ivy league vs. community college just to give the juxtaposition. So set a limit for each category and then however far over the amount is picked up by the government. To add numbers to this to maybe clarify, if a school was limited to 50 thousand a year, but the school wanted to charge 55, the government would pay the extra 5 thousand, or something of this nature. thoughts?
This was originally written in reply to Eve White, and it's buried down there someplace. I thought it would be prudent to make it a new post, because I know there are others out there with a similar circumstance.
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I took off to aim at medical school in 1998. In 2000, my husband decided to take off with a photographer. My major was Neuroscience (not some BS degree, and we all know they're out there. I went to a state university) .
Since I no longer had a shot at medical school, I graduated with a BS in Psychology, and 42K in loans in 2002.
I did have skills to fall back on, but finding and keeping a job was difficult. I was layed off four times in 2003 (two of the companies simply closed their doors), and was underemployed - making at most $12 an hour, part time, which amounted to about 16K a year at the most.
2010, I caught a break. Two months into a decent job, I phoned "the student loan people". I say that because the loans when into collections, and about twelve calls later, I found the agency who now holds my loans. *I* made the choice to call them and work out a payment plan. They refused to accept the $200 a month I offered (while my income was $1500 a month) and demanded $375.
Ten days after accepting my new job, I was pulled over at a traffic stop. I did not have insurance at the time, and found out at that time my license had been suspended (due to no insurance, it's the law here). To make a *very* long story short, I caved into the demands of the collection agency, and paid them, instead of meeting my responsibilities so I could drive to work. Two days later, an officer was behind me in traffic, ran my tag, found out I was driving on a suspended license, and arrested me. After all THAT was done (after having borrowed another $4000 from family and friends and having every payday consumed with this legal matter), I found my wages garnished.
The collection agency wouldn't listen. In fact, when I told them that I made a payment to them that I could not afford, that resulted in my being arrested, they seemed to escalate their garnishment proceedings, which took less than six months from the initial payment.
I know I should pay back the amount I borrowed, no matter what the circumstances were that kept me from attaining the degree I was pursuing. However, after the collectors were told that I had just barely been working for seven years, made threats for garnishment after I had been at a full time job less than 90 days. However, I had no legal recourse, because the law states that I had to have been involuntarily terminated from a full time job within two years prior. I don't qualify because I hadn't had a full time job (one that put me over the income threshold) since 1996.
This has resulted in embarrassment (I run my name through Google and a mugshot appears!), and financial hardship, all for the sake of their "all or nothing" attitude.
Also, my 42K loan is now stated at 60K... with 10K of fees for the collection agency. Would you believe the SAME COLLECTION AGENCY calls me, at least twice a week? They tell me they have no record of a garnishment.
Those are the facts, ma'am. Their snotty attitudes and snide remarks are a completely DIFFERENT story.
You might ask, "What took you so long to find a decent job?" It was luck. An old friend who knows my skills and work ethic just happened to have a opening (after two years of asking). I am an anomaly. I know people who have been out of work for five or more years that don't have such opportunities, and a similar story. What about them?
Contact me at applebaum@forgivestudentloandebt.com if you'd like me to refer you to a specialist in Student Loan Law. There are statutory provisions for forgiveness of loans taken out to attend schools that are subsequently unaccredited or shut-down.