AltNet: College Loan Slavery (there is never a good time to borrow money for college)

[doeriver]

You know, borrowing money to enroll in a college or university is making a whole lot less sense over the past two decades and I am getting the feeling that the siren call "of a better life/career through higher education" is simply a scam to get mass numbers of under-employed young Americans or dis-employed middle-aged Americans off of the streets while keeping their bellies full and their times and minds occupied...

College Loan Slavery: Student Debt Is Getting Way Out of Hand
The quest for a college degree is dumping millions of young people deep into a pit of debt from which many will never recover.
http://www.alternet.org/workplace/106445/?page=entire
By Nan Mooney, AlterNet. Posted November 12, 2008.

(...)

The economy these days looks frightening for just about everyone. Who would want to be a retiree with little to no earning potential, or a young family grappling with mortgage and child care payments while facing the possibility, or reality, of job loss? But imagine trying to enter the labor force right now, making career choices that could affect your entire earning future. How are college graduates supposed to juggle student loan payments with the realities of an imploding job market and family members too caught up in their own financial turmoil to help out? With all the attention focused on failing banks and government bailouts, the very legitimate panic felt by such graduates risks getting lost in the shuffle.

"Most of the recent graduates I hear from are petrified," says Alan Collinge, founder of Student Loan Justice, an organization that fights for student loan reform, and author of an upcoming book about the student loan industry. "They have yet to find real jobs in their field, so they're out there slinging hash to make ends meet. And then their loan payments come due."

Graduates like Golden are right to feel petrified. According to a recent College Board report, about 60 percent of 2007 college graduates had student debt, each taking out an average of $22,700 in loans. Graduates are expected to begin repaying within six months, healthy job market or no. Loans can be deferred, but never erased (unless you die or are permanently disabled). And when those payments do come due, many will face the prospect of paying back not only fixed-rate federal loans but also high-interest private loans. The private loan industry is now responsible for 24 percent of student lending. Before the economic crisis hit, it was the fastest-growing sector of the student loan industry. And though the $700 billion bailout bill includes provisions to enable the U.S. Treasury to buy troubled assets, including private loans, from student loan providers, it provides no relief for the students who have taken out such high-interest loans.

Collinge sees the proliferation of costly private loans and the abysmal job market as a potentially toxic mix, one that could result in a wave of bad loans echoing what has already happened in the housing industry.

"Attention needs to shift from welfare of the banks to welfare of the students," he offers. "Otherwise, I wouldn't be at all surprised to see a dramatic spike in the number of people defaulting on their private loans."

Student LoanJustice.org
http://www.studentloanjustice.org/

Due to Congressional action over the past decade, student loans are the ONLY type of loan in our nation's history to be specifically exempted from standard bankruptcy protections, have statutes of limitations removed, be exempt from truth in lending requirements, and also exempt state agencies from the Fair Debt Collection Practices Act. At the same time, law allows for draconian penalties and fees to be attached to student loan debt, allows for wage, tax return, Social Security and Disability to be garnished without a court order.

As a result, student loans have become the most profitable, uncompetitive, oppressive, and predatory type of debt of any in the nation. This has occurred due to legislation- championed by the student loan industry- that took nearly every standard consumer protection away from student loans. Vast personal fortunes are being made by student loan company executives who lobbied for this legislation, at the expense of decent citizens who were not able to capitalize on their education. This has effectively crippled MILLIONS of decent citizens.

We are banding together. If you are a student borrower hurt by your student loans, welcome. Do not be intimidated or ashamed. Please start by telling your story. It needs to be told. From there, you can support our Political Action Committee (PAC), and also find others in your local area who are facing similar situations. Above all, please help spread the word about this site.

If you or someone that you know is thinking about borrowing money to enroll or re-enter college during the Bush Recession, you might want to have them to visit the aforementioned web sites