Can you imagine a country where education is not a human right but a commodity to be bought and sold using debt?  Yes, well America is one such country; there are many, many others (http://sinche.uom.gr/sites/default/files/proj15_ziderman.pdf).

With for profit prisons, for profit medical care and for profit, well, for-profit everything when it comes to declaring independence from student debt, a lot of working people are under the thumb of the same dictator: student loans.  This debt-despot is really the handiwork of the financial markets that peddle debt like they were selling street drugs.

In fact, not surprisingly, according to a recent report from the Urban Institute, one in five adults over the age of 20 are carrying student loan debt.  Take a household with $53,000 in outstanding student debt — which is the average college loan balance for a family headed by two people with 4-year degrees – they will be about $208,000 poorer over a lifetime than a similar household with no debt. This, according to a study released this month by a public policy research organization, Demos (http://www.huffingtonpost.com/2013/08/04/student-loan-debt-lost-wealth_n_3701087.html).

Yes, according to Demos the average student loan debt could cost a household $208,000 over a lifetime!  That’s money that could have gone into the economy, increased consumer demand, created jobs, provided funds that students must divert away from retirement savings, parent borrowing, or credit card debt.

Young workers with college loans are much less likely to buy houses, cars, or other consumer goods unlike their unburdened counterparts, according to an April study from the Federal Reserve Bank of New York.  And the amount of student loan money owed is owed in part to the for-profit colleges and drive-by disaster universities who snort federal cash like it was Columbian cocaine.

In fact, Demos noted that:

“Extrapolating the data, Demos found that the nation’s $1 trillion in outstanding student debt would amount to an aggregate wealth loss of about $4 trillion over the lifetime of the borrowers. The calculation assumes that the average amount of debt held by bachelor’s degree recipients represents the median amount of college debt held by borrowers overall” (ibid).
With the federal debt at $16.7 trillion, student loan debts weigh in at 6% of the overall national debt (http://www.forbes.com/sites/specialfeatures/2013/08/07/how-the-college-debt-is-crippling-students-parents-and-the-economy/)

Disgracefully, most advice on student loan debt, such as the disgraceful corporate created Suzie Ormans of the world, wag a disciplinary finger at those wanting an education and focus on how to avoid getting stuck in debt in the first place. This reactionary nonsense acquiesces to a situation where people must suffer debt to go to a college or university or eschew education completely.  The proffered ‘useful tips’ to avoid student debt assure the criminal activity is institutionally accepted and that you, the current or former student, must now look for tricks, gimmicks, magic mirrors and the lot to assure you are not trapped in the web of debt servitude for life.  Good luck.

 

Loan ‘forgiveness’

Well put on a sundress and sing me a show song!  A government’s consumer advocate says more than 33 million workers qualify to have their student loans forgiven because they work at schools and hospitals, in military and police departments.

‘Forgiven’?  The sophistic language makes one think that the culprit is the student who wants an education and now, crumpled hat in hand must cry to their patron for ‘forgiveness and pity’.

This is how the sock puppet press, working for the corporate board rooms of Wall Street conjure up language to inculcate guilt on the part of those wishing an education who now find themselves tied to massive debt servitude.  The real criminals and the ones who should be before the criminal court pleading for forgiveness are Wall Street and the government that enables them.

Alas, this is not the case so if you have student loans you want ‘forgiven’ better lace up your camouflage boots for the next imperialist war, shine your police boots and go to the firing range for the next crackdown on the Occupy movement, sharpen your clerical skills for work in seedy private charter schools and get ready to do double shifts if you are a nurse or doctor, at for-profit hospitals.  Then, maybe you shall be ‘forgiven’.

However, what is not well known is that the underemployment of college graduates is running rampant and student loan debt is a quandary that will cripple economic possibilities for the near and distant future. And by the way, what about other working people who bought degrees with debt whom are not hospital workers, teachers or police and military?  Guess they are out of luck.

But even more questionable is what about those who never graduated or dropped out after they realized they were buying a phony degree from the drive-by schools they call for-profit colleges and now endure massive student loans they never could have imagined?  How will they or will they be forgiven?

And of course, the ‘forgiveness’ is designed for government loans for student debt, not private loans.  Now passing the $1.2 trillion mark — $1 trillion of that in federal student loan debt, the rest is private debt and this will never be forgiven by the deacons of finance (http://www.forbes.com/sites/specialfeatures/2013/08/07/how-the-college-debt-is-crippling-students-parents-and-the-economy/).

In the case of the government student loan debt, this of course means that when a government student loan is ‘forgiven’ or ‘defaulted on’, you the taxpayer (and this means the ‘forgiven and the defaulters as well’ for they pay taxes) will foot the bill for you have subsidized the transfer of federal monies to the prison of student debt servitude.

Dailyfinance.com on-line actually asked:

“If you’re already packing a BA in English and five figures worth of student loans, what can you do to get on top of your debt, and get on track to a healthy economic life?” (http://www.dailyfinance.com/2013/07/03/declare-independence-student-loans/)

A “healthy economic life” in a failing Empire built on corruption, violence and war?  Who’s kidding whom?

Look closely:  According to Dailyfinance.com roughly a quarter of the U.S. workforce stands to take advantage of federal rules that give favorable loan repayment options for those who work in public service fields.  Right, ‘favorable repayments’ means debt servitude for life, drop by drop, but you will never hear this from the sophists who report on this garbage.  And ‘public service’ is restrained to those professions listed above.

According to the Huffington Post, few college graduates avail themselves of the loan forgiveness options and needlessly carry millions in debt (33 million people) (http://www.huffingtonpost.com/2013/08/04/student-loan-debt-lost-wealth_n_3701087.html).  Why?

Citing the Huffington Post:

“The Consumer Financial Protection Bureau says the system is overly complicated and often confusing” (ibid).

Really?  So, the government is not only promoting student debt as an opportunity for  student learning but when it comes to their own rules on ‘structured repayment’ and ‘forgiveness’, they are less than apt to notify students but instead have put into place a mystifying bureaucracy that fails to work.

Of course from the point of view of financial capitalism and their coin operated politicians this is logical, for the stock market depends on student debt payback, not debt forgiveness.  After all, pension funds, many of them teacher pension funds, and stock and hedge fund traders cannot win if there is a drop in student loan payback.  Even though they will run away with the federal monies as a result of their larceny this is all bad for their business image and could restrain their ability to snout in the trough of public funds.

So, while interest rates for student loans are tied to the ‘free market’, a monopolized entity owned and operated by transnational corporations and financial institutions, the corporate media pumps out false and partial information on student loan ‘forgiveness’, which is all hype.

What these corporate bulletins should be reporting is that student loan debt is unconscionable, thievery, buggery and part of a system that puts profits before people.  But don’t expect to hear or read this in the corporate media.  They know which side their bread is buttered on.

Rarely is the question asked by the supplicant corporate financial press:  “Why do students have to go into debt to get a higher education?”  That question would be blasphemy to both Dailyfinance.com and other similarly situated corporate media minions of despair who tether students to the carpet loom of debt for their own self aggrandizement and gains.  Why?  Well, it is called Wall Street and they love indentured servitude as long as the one percent profit from the well-loomed rugs labored on by American workers.  Ironically, buying American means buying debt.

The amount of money traded in stocks, pension funds, and hedge funds tied to student loans for higher education would make a billionaire blanche (http://cshe.berkeley.edu/publications/docs/ROPS.JAD.ForProfitsUS.2.15.2012.pdf).

What if you die and you have not paid your student loan debt?

With $200 billion now on the books as private student loan debt, what happens if you die before you pay?  Excluding federal student loans, for most private student loans, when you die the student loan lenders will first attempt to collect from the borrower’s estate as soon as they have a death certificate.  If there is no estate, they will then attempt to collect from any co-signer if one exists (this could be your mom, dad, wife, and friends).  In this occurrence the debt would fall to your spouse or loved ones — Rest in Peace.  However, the ‘Loan Arranger’ never dies.

In the case of spousal liability this will depend on the community property laws in a particular state.  Many community property states offer exceptions for government education debts so that the spouse isn’t held liable for the debt unless they co-signed the loan. Not so for friends, family and loved ones.  And of course they usually co-sign the loans, unknowingly.  This is how the loans are structured by clever lawyers who sell their legal services as commodities.

Default rates on student loans are widespread and growing. After $3.5 billion in government and private student loans went bad in the first three months of 2013, the total of federal student loan borrowers defaulting on their loans came to 6.8 million, setting a record high (http://thinkprogress.org/economy/2013/07/02/2245511/college-default-rates-higher/).

Moral Hazard for students but not for financial institutions

Never mind all of this, for the idea of debt forgiveness is rebuked by reactionaries like economist Julia Paxton of Ohio University, who states:

“One of the problems of debt forgiveness is that it sets a precedent that similar loans in the future will also be forgiven. Although the loans are allocated toward education, money is fungible and will have the net impact of increasing the spending ability of students in other areas of their lives. As the expectation of repayment obligation falls, borrowers may enter into a situation where they take on higher levels of debt and take more risks.  This will lead to a weakened ability to repay, creating a vicious cycle that hurts the financial sector and the credit ratings of the borrowers” (http://www.forbes.com/sites/specialfeatures/2013/08/07/how-the-college-debt-is-crippling-students-parents-and-the-economy/).

Paxton of course lives off of student loan debt.  Her check is the result of debt.  But this goes unstated.  As for a vicious cycle that hurts the financial sector?  Would the same criteria be applied to GM, bailed out banks, leverage buy-out artists and other hucksters and fraudsters that rely on bankruptcy and debt forgiveness to make a quick buck through mergers and acquisitions, to name one means of profit taking?  It’s doubtful.  “Moral hazard” is for working people, not the captains of finance or the ruling classes.

For-profit debt cancer colleges reap the largest rewards

But all this tells half the story for forty-four percent of for-profit private institutions have higher rates of students who default on loans than students who actually graduate college.  Of the schools analyzed by USA Today and think tank Education Sector, 37 percent of four-year for-profit institutions had more students defaulting on loans than graduating on time.  Do they qualify for any ‘forgiveness’?  Of course not; they can’t even use bankruptcy to dismiss their debt (http://www.studentloanborrowerassistance.org/bankruptcy/) — like banks, insurance companies, stock brokers, industry and other business entities who declare bankruptcy all the time.

So get your checkbook out, if you are lucky enough to have an account, for you will belly up the defaults and forgiveness to the corporate owned government while the profit takers book a vacation to the Caribbean, Aspen, the Swiss Alps or other sundry wealthy enclaves.  This we call ‘immoral forgiveness’ or better yet, insanity.