We have our power in our numbers. What can we do, collectively, to help ourselves?
Why don't we all just stop paying them for a while, until this mess is straightened out? Whats the worst they can can do to us? Garnish our wages for 15% We are paying more than that now! If we ALL stopped paying for, say, 6 months, that would get their attention.
We have been like lemmings marching over the cliff by the thousands. We have got to stop the madness.
We CAN do something with the numbers that we have behind us.
Please contact us at Citizens for an Educated and Democratic Republic cedresq@gmail.com if you would like a copy of this BILL with the hopes you will contact your legislator. Congress goes home from June 27th-July 5th for district work.
We at CEDR (Citizens for an Educated and Democratic Republic) have contacted all Senators and Representatives with a BILL for student loan reform. In this 18 page BILL are facts and figures gathered from substantive information useful in our challenge to unconstitutional laws. We have also recommended 29 separate laws to support our reasoning.
The current bills being proposed to alleviate the problems in the area of student loan legislation are unsatisfactory and only help the student loan creditors. The present legislation has caused grave harm to many citizens and their families. For many, their struggles have continued for decades, taking a toll on their marriages, health, and an increasing inability to live and survive in a worsening economy.
At the present time, there is no relief. The present legislation provides for creditors making tremendous profits at the expense of too many citizens. These citizens have spiraled down to poverty level and are under great stress because they do not see an end in sight to their student loan debt problem. Many have moved out of the country or gone off the grid. We want them to know we are pro-active and empathize in their expatriation.
Please contact us at Citizens for an Educated and Democratic Republic cedresq@gmail.com if you would like a copy of this BILL in Adobe pdf. We encourage you to share it and contact your legislator about it.
and unfortunately the honest truth is that if times were much better, none of us would be struggling to pay off our loans. I recall thinking that I could easily pay them off and refused to think about it when i would awaken in anxiety stricken attacks would creep into my sleep.
I have a few ideas that perhaps some may not have thought about:
1. Do you know someone with savings? Have you thought of selling your loan to them at a lower interest rate. This way you both win; they will likely get a much higher rate of return from you then if their money was in a bank - this is especially helpful to those ofyou in relationship that can't move forward due to this loan. Why not pay the interest back into your family?
2. Homeowners - are you able to remorgage your house getting enough money to pay off the debt? Granted easier said than done, but will simplfy things and if at the very worse case scenario, you do have to declare bankruptsy, the loan will be gone.
3. Have the payments taken from your salary, pre-tax. This means that your payments come from the gross amount you receive and will be from the untaxed portion. Thus, the IRS take less out in taxes as well.
4. Along the same lines, if your education is critical to your job, perhaps talk to your employer about a plan for which they can help you pay it off if you promise to remain there for a certain number of years without a raise. If they pay it off, you save on the interest whilst achieving job stability. Its very expensive to hire a new person than to retain them.
Ok I am not a financial adviser, but I find that if I think of an action plan at the very least I feel better and can move forward. And please understand, I am not wealthy either, I don't own a home, but whilst thinking of ways to get this loan paid off, these were a few I thought of and wanted to pass them along. I am sure everyone knows of these, but doesn't hurt posting for those that don't.
I think you have good intentions, lifestopped, but I think that most of us would "move on" if we could. We can't pay, and are out of options. Further, I find some of your advice troubling.
One thing I learned from the financial management course I had to complete recently is that you NEVER jeopardize your home to pay off another debt. Second (third, etc.) mortgages are a terrible, bad idea. Further, many states don't allow you to keep your home in bankruptcy, so relying on that as a strategy will just leave you homeless.
In addition, private loans from friends or family members will just result in trouble down the road, and is never advisable, but that's a personal decision. As far as I know, there is not an option currently to have existing student loan payments withheld from your income before taxes are taken out.
Finally, the idea of employers paying off loans is an interesting one. I'm not sure I'd want to see the contract for that one, however. It sounds fraught with peril, to me. But again, it would be a personal decision as to whether one would seek such an option. Regardless, the slim likelihood that an employer might occasionally go for such an arrangement isn't enough to address the systemic problem.
I don't agree with all of your comments, but am now going to stay quiet and not make comments - especially as you mentioned they were all bad.
By the way, I have tried at least one fo the ideas and contrary to what you have said, it worked out well.
Do you have any ideas - be forewarned, someone might smack you back telling you that your ideas are fraught with "peril".
If, for example, you stop paying you destroy your credit completely, your employers or future employers can receive notices, which doesn't bode well for your credibility, and it isn't a responsible solution on our part. Just because the government and dept of Ed and our representatives in general ( not all) are not being responsible about our situations doesn't mean we try to manage things irresponsibly. We need to do this in a responsible way, and use our power of numbers which I agree exists, and have a plan. We could get a group together and ask to speak to a Congressional Committee on Education and Mail a Letter to President Obama, and Chair of Dept of Education and be invited to the White House. Afterall, doesn't our new President, that many of us voted for, want us to be heard?? Lets really be heard. I suggest we take this approach. Would like to hear what others think about this. We have to focus on a solution, we have to focus on resolution, we need to talk directly to our representatives and our elected officials. We need to be heard by those in power who can make the changes. Would like to hear your thoughts on this approach or another solid solution. Thanks
As I've mentioned to Dona in a different post, intentionally defaulting on ones loans is the absolute wrong approach. I encourage everyone to continue to pay their loans, to the extent that they can, because, in the long run, willingly defaulting will only come back to hurt you. It's an ill-conceived and short-sighted suggestion and I hope Dona will stop suggesting it to others.
I sympathize with your particular case, Dona. Don't misunderstand me - I think your grievances are real and legitimate. All I'm saying is that those who can afford to continue to make payments on their student loans should do so unless and until we're able to effect some real change.
You may have been battling your own student loan horrors for more than a decade, but the country at large is just starting to learn about what you and others are going through. 6 months ago, nobody was talking about the looming student loan bubble. Today, hardly a day goes by without a story about it. We're making progress and the more people to join this movement, the louder our voices will be.
thats more or less what I was advocating in my little essay on embracing economic ruin. Do you know why bankruptcy was changed in 2005 to make student loans non-discharge upon chap 7 bankruptcy? So that student fees could continue to increase, without risk to the creditors. See, if you are 150K in debt and your prospects are to pay 20% of your net income to student loans for the next 20 years, then it makes ALL the sense in the world to say screw it, file chapter 7, get out from under that debt and start fresh. Sure your credit would be ruined for 8 years, but its better than paying 250K in loans and interest for 20 years! The lenders saw this reality, and so they intervened in the system, lobbying for change in our laws to make this kind of scenario impossible.
So lets be real. The purpose of this website will never be achieved. Students are not a big enough constituency to where politicians care about us, and we dont have the money to bribe (lobby) congress either (thats why we are in debt to begin with). So the real solution if any to most students distress will be a change to the bankruptcy laws that would allow the total discharge of student debt upon chap 7 bankruptcy.
I agree that the bankruptcy laws need to change. The catch here is how can we who are powerless accomplish this??? My Senators from Maine won't even answer my letters -- and all I get is form letters -- when I ask, request feedback and inform them of the corruption and what I have been through and others. My question to all is how can we as a collective group get the Senators to listen??? and to respond?? That is the key issue here. Yes, we need to be real. How are we going to get them to understand. I highly doubt many were watching PBS special last evening??? Why should they??? How do we identify the Senators who are willing to address this issue??? This is what we as a cohesive group need to do. Find a solution to how we can get our representatives that supposedly work for us to hear our plight and look at the facts ( which many don't want to do at this time) obviously, because nothing is being done. Obama has noted student loans being monitored by the oversight committee he intends to create, but that is future-tense.... what about us, now that have to endure this corrupted, fraudulent loan balance we have incurred without any resolution possible at this time due to stagnant and ineffective legislation. The Dept of Ed is a front for our own governments inactions. They acted for the Banks, but they aren't acting for us, the victims of the system. How can we get them to hear us and listen?? Any ideas. This is key to our success. Thanks
I think you misunderstood what I wrote. I did say that there is no discharge based on the change in the law in the mid 2000s, which means that you cannot reduce the balance of the loan amount unless you show "undue hardship", which most people cannot prove. (just for reasons of disclosure, I am an attorney).
Bankruptcy was not "taken away", you can still file, you just cant discharge or even reduce your loan balance in most cases when it comes to student loans.
The solution is to change bankruptcy law to allow students to go bankrupt. Sure its not the most brilliant or even the best solution to student debt, but it is the most practical one and it actually has a chance of success. The alternative is as I said in my article, to wait for hyperinflation to kick in. Of course in that eventuality you had best hope that your loan has a fixed interest rate. No amount of inflation is helpful when the lender can just adjust interest rates everytime the dollar gets devalued.
I don't think the solution is to stop paying. Your level of indebtedness depends on your income. For an attorney or doctor making $100K per year, a $50K loan is not a big deal. For you, a loan that size is a big deal. However, attorneys and doctors have loans well into six figures, which comprise the largest amount of student loan debt.
If you stop paying your loans, you will just accumulate significantly more fees. The Supreme Court is going to hear a case about student loan bankruptcy, whether or not an undue hardship is required.
The solution lies in lower interest rates. As many of this message board write, it is the interest, not the principle that is daunting. I also think it is unfair for these companies to tack on 25%- 40% collection costs, which makes the loan unpayable.
I wouldn't go so far as to say there is a conspiracy to keep people down, but obviously the loan companies do not mind when people default because they can tack on another 25% of the loan and the government will pay them back for it.
Once you go into real default (i.e. when the loan company knows you will not repay another dime), the government often buys the loan to try and force you to pay. The government wants their money. The problem lies in the way the laws were written that the government backs these loans at such high interest rates.
My advice would be to have your loan sold to the government because at least then you can have a Congressman or Senator intervene.
Congress and the Dept.of Education are NOT your friends. THEY are the ones who are doing this to you.