Click on WORD or PDF for full content
This blog has from its inception, pointed out the problems associated with the government sponsored explosion of student debt. In the last year Pickings has dealt with the problem here, here, and here. Just as the American left created a vast wasteland of wrecked lives with zero down payment home loans, it has continued its assault on the middle class with the siren song of an education financed by student loans. In the wake of the meddling do-goodism of left/liberals we find, yet again, millions of people with ruined credit.
In a blog post six years ago, Glenn Reynolds, Tennessee law prof, and Instapundit blogger coined Reynolds’ Law - “The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them.”
This from someone who is on the inside of the education establishment. An establishment that shows the hallmarks of a vast criminal conspiracy preying on those who fall into its grasp. Now that student debt is a 1.3 trillion dollar problem even the Volvo and arugula crowd has come to see the picture as one of their house organs - Consumer Reports devoted most of an issue to student debt.
Almost every American knows an adult burdened by a student loan. Fewer know that growing alongside 42 million indebted students is a formidable private industry that has been enriched by those very loans.
A generation ago, the federal government opened its student loan bank to profit-making corporations. Private-equity companies and Wall Street banks seized on the flow of federal loan dollars, peddling loans students sometimes could not afford and then collecting fees from the government to hound students when they defaulted.
Step by step, one law after another has been enacted by Congress to make student debt the worst kind of debt for Americans—and the best kind for banks and debt collectors.
Today, just about everyone involved in the student loan industry makes money off of the students—the banks, private investors, even the federal government. …
Consumer Reports continues with the “Faces of Student Loan Debt.”
“I feel I kind of ruined my life by going to college; I can’t plan for an actual future.”
Jackie Krowen, 32
In Debt: $152,000
LaneCommunity College, PortlandStateUniversity, University of Rochester
Student Loans: $128,000
Remaining Balance: $152,000
Monthly Payment: $1,200
Occupation: Nurse
When she was 19, Jackie Krowen took out her first student loan to attend a community college in Oregon. She borrowed more when she transferred to PortlandStateUniversity, and still more for nursing school at the University of Rochester in New York.
“You didn’t have to meet with anybody,” she says. “You just clicked some buttons on the computer and you had a huge check.” …
… VANESSA MCCLURG, 29
University of NorthTexas
Student Loans: $67,000
Remaining Balance: $73,000
Monthly Payment: $522
Occupation: Auto Shop Service Manager
McClurg’s father, a retired U.S. Navy officer, co-signed her loans. Then illness disrupted her education. She was hospitalized with pneumonia as a sophomore and later contracted a staph infection: “Unbeknownst to me,” she says, “I didn’t have a good immune system.” After missing more than a year of classes, she dropped out in 2010.
McClurg moved to Utah and got a $9-an-hour job in an auto repair shop, and says she couldn’t afford to pay her loans for a few years. Then debt collectors “really came after me,” she says, threatening to sue her. Then they said they would go after her father as well because he had co-signed her loans. “They would definitely take away his pension,” she says she was told. “They said they have every right.” Finally, she says, “my 84-year-old grandfather gave me every dime he had” so that she could get her loans current.
McClurg says she now earns $32,000 per year, enough to pay $522 each month for the education she never finished.
The NY Times reports on New Jersey’s killer collectors of student loan debts.
Amid a haze of grief after her son’s unsolved murder last year, Marcia DeOliveira-Longinetti faced an endless list of tasks — helping the police gain access to Kevin’s phone and email; canceling his subscriptions, credit cards and bank accounts; and arranging his burial in New Jersey.
And then there were the college loans.
When Ms. DeOliveira-Longinetti called about his federal loans, an administrator offered condolences and assured her the balance would be written off.
But she got a far different response from a New Jersey state agency that had also lent her son money.
“Please accept our condolences on your loss,” a letter from that agency, the Higher Education Student Assistance Authority, said. “After careful consideration of the information you provided, the authority has determined that your request does not meet the threshold for loan forgiveness. Monthly bill statements will continue to be sent to you.” …
The Boston Globe has more. The pictures of the students reported on here were such large files they could not be included. Follow the link to get them.
IT’S ONE OF THE MOST enduring selling points for the value of higher education: The best route out of poverty is through the college quad. Spend four years in college, and all that book learning, mind opening, and network expanding will help even the lowest-income student jump up several rungs on the economic ladder. Nowhere is that message preached as often or with as much evident authority as in Massachusetts, the nation’s historic capital of private, nonprofit higher education, where the concentration of colleges in some areas is surpassed only by the number of Dunkin’ Donuts franchises.
But just how true is this truism about college lifting low-income students out of their circumstances, Horatio Alger style? In fact, like the actual story of author Horatio Alger, who was born into a well-established family and graduated from Harvard, there’s more myth than truth. That’s been especially so in recent years, as nonselective private colleges from around the region have increasingly filled their freshman classes with low-income students — often the first generation in their families to go to college — from Boston and other urban areas. Quite a few of these small schools are former junior colleges and women’s colleges with rich histories of opening doors to students traditionally shut out from higher education, an admirable pursuit that officials refer to as “access.” Many of the colleges are also in tough financial straits, struggling with rising costs, stunted endowments, and declining enrollments.
So whether they are actively recruiting these low-income students for reasons of open-the-door altruism or keep-the-lights-on capitalism — or, more likely, some combination of the two — there has been a huge, largely hidden byproduct of this dramatic increase in access: These students are often being loaded up with staggering debt that is completely out of whack with the earnings boost they’ll likely get from a degree at a nonselective or less selective college. Already, average student loan debt is higher in Boston than any other metro area in the country, 44 percent above the national average, according to Credit Karma. But more troubling, many of these low-income students — and, at some colleges, most of them — are not graduating. That means these non-completers are leaving campus saddled with lots of debt but none of the salary gains that traditionally come with a bachelor’s degree. …