Stafford Loan Justice

Archive for the ‘Right to education’ Category

Public Service Would Help Graduates Pay Back Debt

Written by Danny Bradlow (Centre for Human Rights) and  Edward Webster in the July 11, 2016 the Mail & Guardian (Johannesburg, South Africa).

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Written by S.

July 24, 2016 at 5:44 pm

New Jersey’s Student Loan Program

From ProPublica, co-published with The New York Times:

New Jersey’s loans, which currently total $1.9 billion, are unlike those of any other government lending program for students in the country. They come with extraordinarily stringent rules that can easily lead to financial ruin. Repayments cannot be adjusted based on income, and borrowers who are unemployed or facing other financial hardships are given few breaks.

New Jersey’s loans also carry higher interest rates than similar federal programs. Most significantly, the loans come with a cudgel that even the most predatory for-profit players cannot wield: the power of the state.

New Jersey can garnish wages, rescind state income tax refunds, revoke professional licenses, even take away lottery winnings — all without having to get court approval.

“It’s state-sanctioned loan sharking,” said Daniel Frischberg, a bankruptcy lawyer. “The New Jersey program is set up so that you fail.”

Read the rest of the article here.

 

Written by S.

July 6, 2016 at 2:31 am

Is Education A Right?

Russell Brand (The Trews, E194) on UK students demanding the end to university tuition fees:

Written by S.

November 22, 2014 at 4:20 am

Posted in Right to education

Germany & Tuition

Germany abolished tuition for in-country and international students.

It appears lawmakers in Germany came to the conclusion that loan servitude was not only an intergenerational problem striking at parents and students alike, and loan debt is a social (economic) justice issue.

Read more at The Times of London and Times Higher Education (UK).

 

 

 

 

Written by S.

October 2, 2014 at 11:49 pm

Bank on Students Loan Fairness Act

Senator Elizabeth Warren introduced the Bank on Students Loan Fairness Act (S. 897 and H. R. 1979) during the 113th Congress, first session. While the bill is important in terms of interest rate increases set for July 1 (on federal subsidized Stafford loans) from 3.4 to 6.8 percent – and this IS important –  those of us who have graduated face huge capitalization (compounded interest) on their existing student loans. As I’ve stated on this blog in multiple posts, the Secretary of Education has the power to determine policies regarding capitalization. A remedy must be found to help borrowers from this crippling debt.

In a Factsheet from Sen. Warren’s office,  the following claim is made; couldn’t the same be made that long term capitalization of loans has contributed to this $1 trillion debt?  And it hampers postgrads from actively participating in “buying homes, saving for retirement,” and so on?

Outstanding student loans now total more than $1 trillion, surpassing total credit card debt. Last month, the Federal Reserve identified this mounting debt as a risk to household spending. The burden of loans keeps borrowers from buying homes, saving for retirement, and engaging in consumption that will keep our economy on the road to recovery. (Factsheet)

The text of Sen. Warren’s proposed legislation is here. Other recent initiatives are in the news as well, but capitalization reform is not in the cards.

Written by S.

June 18, 2014 at 10:18 pm

Parents Saddled with Debt

I just ran across an October 7, 2012 article by Miriam Wang at Alternet on the “joint examination” by ProPublica and The Chronicle of Higher Education on the Plus Loan program. There’s some great reporting on the Plus program, but no mention in Wang’s article and the joint report on borrower’s right to know of capitalized interest, replete with formulas used to determine interest and infographics that educate borrowers as to how the loan will balloon over time due to capitalization.

These loan stories, so very reminiscent of a Charles Dickens novel, suggest to me that the real issue is just too taboo to discuss: the right to education and heaven forbid, a right to a free education. A right to education in the form of achieving universal primary education (Goal 2) has already been laid on in the Millennium Development Goals.

The recent protest of Cooper-Union students begs the discussion society-wide on the subject of free education as a societal good and long term form of “alternative” wealth (emphasis and links added):

NIKI LOGIS: My name is Niki Logis. I teach sculpture at the Cooper Union. I have been at the Cooper Union for 43 years. I am devoted to the Cooper Union because it is the only tuition-free undergraduate college in the United States that is prepared to take provincial American teenagers, and a sprinkling of others, and turn them into mature artists who are capable of critical thinking and original art making. You cannot have a contingent of students attending any aspect of an institute that had the name Cooper Union on it be the same if those people are paying tuition. The nature of your abstract and theoretical speculations would be different. The nature of where you recruited your students from would be different.

Written by S.

January 11, 2013 at 11:22 pm

Students as Producers of New Wealth

This week, Pew Social and Demographic Trends released A Record One-in-Five Households Now Owe Student Loan Debt. The Pew report does a good deed by situating student loan servitude “in the context of the debtor household’s other debts, assets and other measures of economic ability to handle the student debt” (p. 5). The study is based on government data from the Survey of Consumer Finances (SCF), “a triennial survey of the financial characteristics of U.S. households sponsored by the Board of Governors of the Federal Reserve with the cooperation of the U.S. Department of the Treasury ” (p.5). One of the most revealing findings by Pew:

While every income group had more total student loan debt in 2010 than in 2007, the increases were greatest at the two extremes of the income distribution—households in the lowest fifth of households by annual income and in the highest fifth—than in the middle three-fifths. (p.2)

Because outstanding student debt has been rising and household incomes have been falling since 2007, outstanding educational debt has risen as a share of household income for all. (p.2-3)

Carl Davidson has an interesting perspective on student loan debt, one that is worth sharing in relation to the dismal numbers contextualized by Pew.  Mr. Davidson, interviewed  June 4, 2012 on The Progressive Radio Show by The Progressive‘s editor Matthew Rothschild, discussed student loan debt and the need for free public education. Davidson believes a free college education “is very much in the American tradition” as evidenced by the GI Bill that assisted millions of U.S. servicmen and women in pursuing their education.  Around 5:40 into the interview, Mr. Davidson proposes that we collectively reconceive student debt in way that emphasizes intellect, knowledge production, and sharing of ideas as elements of social investment:

But somewhere along the line we started seeing students as consumers of wealth rather than as producers of new wealth. My view is that students are producers of new wealth mainly in the their own skills, their own human and social capital, and the country should subsidize it. You can make students pay something, small amount, more or less..

Davidson and Rothschild see the “new wealth” movement as a critical part of Occupy Wall Street; one need only look at student stories of debt servitude reported at Occupy Student Debt and Occupy Colleges to understand that further reform of the student loan repayment system is required. I’d only add to the Davidson-Rothschild discussion that adjunct and contingent faculty also create new wealth, often in spite of their working conditions. As such, this population must not be ignored in student loan debt discussions.  Perhaps Pew’s next step is a  study on the adjunct and contingent population?

Written by S.

September 27, 2012 at 6:37 pm