Student Loans The "New Indentured Servitude": The Atlantic

The Atlantic Business Channel:

The Wall Street Journal ran a post over the weekend about a new credit crunch among low income borrowers, noting it is now 'payback time.' What they didn't go into is that their primary interviewee is drowning not on expensive cars loans but student loans. This former student's debt is far from extraordinary. It is, in fact, tragically ordinary, as student loans have become the 21st century version of indentured servitude.

Read the whole story: The Atlantic Business Channel

Comments

[zanzy]

07:36 AM on 10/15/2009

I really am in alot of student loan trouble too. Currently, I am working on my PHD. I went to the university that offered me the most money including a research stipend and a paid job too. I thought I was doing everything right. But they cancelled my stipend. And the university realized that a student would do my old job for free for good reference, so no more paid jobs. Then, I got sick and all i had was student health insurance, which covers nothing. Anyways, I am going into serious student loan debt and cannot find a job for the life of me. What can I do, I have to take another semester worth of loans to eat. I do not think people understand that students want to work, we do not want student loans. But we are left w/ no choices. If I had a job, I would have dropped out my now. The university/formal education system is broken. We are told one thing (to get us to come) and then we are stuck.
lower interest (3% max.)
no interest forebarence
total debt forgiveness in 10 years ( income under 100k)
total debt forgiveness for seniors (income under 100k)

YES, WE CAN.

[americanfabius]

09:59 AM on 10/14/2009

Here's a thought, attack the problem at it's source: the high price private (and public) universities are charging students. I go to a state university where I see extreme waste and opulence each day, which adds nothing to the value of my education.

Solution? Scale back, no grand and extravagant building projects to keep up with the Jonses (other universities) and no continued tuition hikes (+7% for me this year) to finance it. Most importantly, take a real good hard look at the "faculty" of universities (and I use the term loosely). I've had many professors who are abysmal, unqualified, and TENURED.

[hypnotoad72]

12:53 PM on 10/14/2009

OMG, going after problems instead of symptoms? It's like everybody except policy makers see what's really going on in this country... (cool!)

I especially agree; the college I go to has a high tuition, but their "management" definitely wants to do everything on the cheap -- I've even bought my own equipment, because theirs is so grossly underpowered (and their stuff isn't 18 months old. Being in IT, I could write a 3-page list of what's wrong, like they'd care. They only want money. )

Still, as the downward spiral continues, in the end nothing will make a difference if the true core issues are not addressed. Of which "costs" are one mere facet.

[The Meek]

05:42 PM on 10/14/2009

This a bit off topic, but I have got to say it. The best school I have ever attended was Navy electronics school. The instructors were terrific. The presentation was fast paced so you didn't lose your concentration. And they knew how to motivate you. [If you flunk out you will be peeling potatoes 14 hours a day for 3 months.]

[Stock market]

09:45 AM on 10/14/2009

The wealth gap will widen to levels never before imagined while the middle class ceases. Our politicians need to do more to ensure equality.

good articles; http://bit.ly/1NkbAn

that means no bank bailouts. no tax cuts except for those in the middle and lower income brackerts more heath reform. affordable tuition.

[getsit]

12:38 PM on 10/13/2009

Most of the college graduates who have debt are from low income families. They had to borrow because they wouldn't have been able to go to college otherwise.

The college education system is unfair. Not everyone wants to go into high paying jobs. We have to have some way of educating our children so we can have quality teachers, nurses, doctors, social workers, etc. A doctor might want to do his service in community clinics or rural areas where the pay would be low. We need educated workers in all levels of service.

More grants and scholarships need to be available and directed to the most needy.

[condor101]

11:53 AM on 10/13/2009

In Europe, universities are either Free or very low tuitions for their citizens.
Universities consider themselves a profit center here in the U.S. It's a total scam.
The young people here in the U.S. are screwed by student loan debts.
I'm glad that I completed college years ago and have no such debt.

[x004Ronin]

11:23 AM on 10/13/2009

You have to be smart about it. Don't attend a private university when you can attend a state school if you want to get a major that doesn't lead to a high paying job. I have absolutely nothing against philosophy or Women's studies majors. If those are your passions, you should pursue them. You just need to be realistic about it.
I have a philosophy-major friend graduating with the same amount of student loan debt as my friends who are engineering majors. The Chemical and mechanical engineering majors can look forward to $50,000 salaries within the first 2 to 3 years of entering the workforce (or even higher, if they're at a good firm). The philosophy major? Not so much. Meanwhile, the philosophy major is accumulating interest on that debt. My friend who is a Women's studies and English double major isn't in as much debt, but the job skills that you learn as a Women's studies major don't qualify you for high paying jobs. When you're an 18+ year old at college, you have to make adult decisions, which include cost-benefit analyses. Saying, "I like reading philosophy" is one thing. Saying, "I like reading philosophy and I'll graduate with $30,000 in debt so people can teach me how to read it well" is another thing entirely.

[bramapanzer]

04:04 PM on 10/14/2009

How many 18 year olds even KNOW cost benefit analysis, return on investment, or opportunity costs? Civics and economics are no longer part of our curriculum in public schools.

[ApolloniaCreed]

10:58 AM on 10/13/2009

As a student who is not exactly a young person (well not 18/19 young), I can see how a young person can get caught up in large amounts in student loans. It's very easy to borrow, and your financial situation is not assessed as closely as it should be IMHO.

Fortunately I currently make more than I will ever need to take out in student loans, and work for a company that reimbursts a significant portion of my tuition. I couldn't imagine graduation with debt that is 2 time or more my starting salary.

[ApolloniaCreed]

11:24 AM on 10/13/2009

Excuse me. Reimburses.

[BernankeMadoff]

10:45 AM on 10/13/2009

The government has put the same punch bowl out that got us into the mess in the first place. More debt and consumption and don't worry about paying it back. (Berbnanke= Greenspan II)

Good articles: http://pie.im/af30

If this is change we can believe in, count me out in 2012. Obama should not have reappointed bernanke.

[KoolAidAmerica]

02:51 AM on 10/13/2009

federal loan guarantees are the problem.

without it colleges would be forced to reduce costs for tenured professors instead of raising tuition fees every time. most students don't realize till they actually have to pay for the loan. getting into dbt for english honors or womens studies etc is stupidity.

[bluevase]

11:00 AM on 10/13/2009

Most of the professors at most colleges are part-time adjuncts, not tenured faculty

[AnotherMcIntosh]

02:08 AM on 10/13/2009

One proposed solution:
If you have crushing student-loan debt, find and work with other like-minded individuals to change the bankrkuptcy laws.

A second proposed solution:
Find and work with other like-minded individuals to change the tax laws so that the billionaires and the churches begin paying their fair share of the taxes.

A third proposed solution:
Immediately begin taking action to challenge the incumbents in your district (your Congressional Representative as well as local politicians) who will not take an active interest in dealing with this problem. The time for planning to challenge the incumbents in the next primary is now, now when the primaries are held.

A fourth proposed solution:
If you cannot organize with others to change the bankruptcy laws, if you cannot change the tax laws, and if you will not take action to challenge the indifferent incumbents, then forget about it. Merely complaining about something when you cannot or will not take action will simply make you unhappy.


Crushed by student debt? Get off your butt. Take action. Organize. Do it now. Work at least a little every day towards your goal.

[Squeezer55]

12:21 AM on 10/13/2009

When I went to College in the early 70's , a student could apply for a receive a student loan and also receive a matching grant .I took liberal studies courses and my only salvageable experience was learning how to run a student pub. When it was time for my boys to go on, I steered them away from College and into trades programs. My youngest son finished his apprenticeship as an electrician and now makes $36/hour, which is pretty good for a 22 year old. Post secondary schools are just businesses who want to put bums in their seats and don't give a sh*t what happens to its graduates.
If you have any young people , steer them away from colleges and universities and towards a trade . It will save them a lifetime of regret.

[jrsmee]

11:29 PM on 10/12/2009

it's a vicios but self inflicted circle just like mortgages. in both cases cheap and easy credit allowed people to buy what they couldn't afford (the guy destined to work at a call center shouldn't have either the 500k house or the 50k a year fourth rate private degree). taking out the loan on both the house and college drives up the price. if you're smart enough for harvard an want to practice big law, prices are still a bargain. if you can't get into state u/ don't want to work for the man, etc... go with something more affordable

[sixyfivepercentwater]

11:23 PM on 10/12/2009

Say what you want about the policy of indenture, but indentured servants at least worked. That was kind of all they did. So in what way are unemployed students like indentured servants?

[The Albany Kid]

11:22 PM on 10/12/2009

This dark side of the "American Dream" has been in the closet for way too long! It's good to finally see it come into the daylight!

[psybab]

11:09 PM on 10/12/2009

I'm finishing up a PhD with $125k in student loan debt, for a job with a starting salary of 50k. Think about that.

[njb5112]

11:46 PM on 10/12/2009

I hear ya...I'm wondering why I bothered with grad school now. Seriously, I would make more money as an associate degreed RN.