Robert Applebaum is like many of us. He's barely making a dent on paying off his student loan debt. He struggles to pay his bills on time because he's too busy spending his hard-earned pay on a hard-earned education he'll forever be paying for. Back in February, I told you about this 35-year-old attorney, and how he launched a Facebook group to promote student loan forgiveness for the "hard-working, educated middle class" making under $150,000 annually. His logic was if the government let the rich off the hook with a bailout, they should do the same for the common man.
More importantly, in doing so, Applebaum -- whose been fighting off his own loans since 1998 -- noted it'd stimulate the economy. "Knowing I'd have an extra $500 per month in my pocket will get me spending again. Multiply that across the country and the economy will start to move again," he told me at the time.
Zoom in nearly six months and Applebaum's idea is still just that: an idea. But, there's no mistaking the "movement" is rolling right along. "The idea has spread like wildfire," Applebaum said in a June 26 interview, noting how when the piece ran in February he had just a couple thousand signed up on his Facebook petition and now has (at press time) 213,291 and counting. He also said more and more news outlets are covering the topic, he's set up a blog on the topic, and he's hopeful his initiative will be -- at the very least -- considered.
In essence, what has happened since the initial story a few months back?
People from all walks of life have visited the Facebook group and the new website and shared their student loan horror stories. My intention when I originally wrote the essay was to advocate for a different method of stimulating the economy. Little did I realize that I'd hit such a nerve and unleash a flurry of stories from so many people regarding the hardships that their student loans pose in their lives. I wasn't even aware of all of the inequities in the system and, because I'm current in my student loan payments, didn't realize how much more burdensome they are to so many people.
Have any politicians joined your cause?
Councilman Jim Sano of the Albany City Council has introduced or is planning to introduce a resolution encouraging the U.S. Senate to consider student loan forgiveness as a means of economic stimulus. But so far, that's all I've heard. Nothing of any consequence... yet.
Did you ever think your idea would take you this far?
Never in a million years. I wrote what I thought was a pretty good essay arguing for a bottom-up approach to stimulating the economy. I never expected 100 people to read it, much less 200,000-plus. I certainly never sought attention or press -- all of the stories that have been written about it have been the result of the reporter contacting me, not the other way around.
You've incorporated your own non-profit organization -- what is the goal there?
To bring this budding grassroots movement to the next level through lobbying, education, awareness, continued publicity and to provide a forum where new ideas can be debated and student loan horror stories can be shared. I've also started to blog [about it] and I'm hopeful that people will continue to read my thoughts on not only issues pertaining to student loans, but a vast array of topics.
Are you still practicing law?
No. This has become my full-time, non-paying job. I'm still paying my loans though.
Most importantly, do you know if the president has heard of your campaign?
I suspect that he has because in a town hall forum a few months back, he responded to a question about student loan forgiveness and indicated that, in addition to the steps he's taken thus far to move towards a more direct lending program, his administration is looking into other avenues by which to help struggling middle class student loan debtors, including adjustments to the principals owed. I cannot say for certain that he's specifically heard of what I've proposed, but I'm fairly sure he's aware of the idea based on prior statements that he's given.
A big opposition to your idea is that students who have paid their loans in the past will resent people who get bailed out. Whats your thoughts on this?
I recognize that it's unfair. Nothing in a democracy is ever truly fair. I don't have children, yet my taxes pay for public schools. I don't collect Social Security or Medicare/Medicaid, yet I pay FICA taxes. The measure by which this proposal should be judged is not whether it's fair but whether it would work to turn the economy around. When the economy starts to grow again, everyone benefits. Desperate times call for desperate measures and the old Washington ways of doing business are no longer applicable to the 21st Century economy. New ideas need to be considered to help the middle class unshackle themselves from crushing debts that keep them from realizing the American dream. One should not have to be punished for the rest of his or her life simply for wanting to obtain a higher education. Society as a whole benefits from a well-educated citizenry. It's time we start recognizing the real value of an education to everybody and fund it accordingly.
Last logical question: What's next for you and the movement?
Continue to spread awareness about the benefits of student loan forgiveness, not only as a means of economic stimulus, but to expose the inequities that exist between student loans and all other types of debt. Starting on July 1, the Income-based Repayment and Public Service Loan Forgiveness programs go into effect and I'm afraid that people will just assume that the problem is solved. Those programs were passed through legislation in 2007 and do not reflect the current state of the U.S. economy.
With the lack of jobs for new graduates, as well as older borrowers, there is a looming student loan bubble about to burst. Default rates are going to soar because borrowers simply do not have the incomes to keep up with payments. I want to continue to educate the general public that we are not seeking a bailout, per se, but, rather, recognition that the way we fund higher education in this country has had the unintended consequence of indenturing an entire generation of students who now comprise the "educated poor." Tuition costs have skyrocketed at more than twice the rate of inflation and students are turning more and more to private loans where there are even fewer consumer protections than federal loans.
There are economic incentives for lenders to let a borrower default rather than coming to a compromise payment plan and the options that do exist for struggling borrowers, like forbearance and deferments, border on usury.
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It will be much cheaper for students to study a profession overseas and come back to the US to practice than to study here. Some will stay overseas, causing a brain drain. The ones that return will have the big advantage over US students of not having much in the way of student loans to repay. Some US students are becoming doctors in Cuba for free.
The "free market" is only free for banks and corporations that can afford to pay lobbyists and political bribes. Enriching them at our children's expense is bad for everyone.
1) restore the statute of limitations; and/or
2) restore Chapter 7 bankruptcy protection with no exceptions; and/or
3) restore Chapter 13 bankruptcy protection with no exceptions; and/or
4) eliminate the Department of Education's right to Administrative Wage Garnishment.
The free market can begin to deflate this toxic bubble gradually if any one of these approaches is taken. Otherwise, when this bubble pops, we could end up like Iran and Tiananmen's Square: the students protest and get supported by the rest of the population that has already been angered, resulting in a disruption of our governmental functions. We can't continue to ignore this problem because education is our backbone, we've broken it, and the middle class is paralyzed and drowning in debt.
Myself and all my co-workers got into our field (counseling/social work) to help others who are unfortunate, and too often the loan repayments put us closer to those we work with than our actual peers.
That is, you get an undergraduate BA degree, 4 years, you spend 4 years working to help your community, another underprivileged one, or go to the armed services. Go on for an MA (2 more years) that´s 6 years to serve. A PhD or an MD would require the same. That would ensure our armed services are full, and guarantee every one all the education they desire free, on the condition they give back to their country what they got out of it. One could choose to work in an Indian reservation, or an inner city school, or spend 8-10 years serving in the military. No draft ever needed. No kid denied a full-blown college education.
I would agree to this in a heartbeat. While I´m too old to do military service, I´d readily agree to help out an underserved community to pay back the mountain of educational debt I´ve amassed which I know will cripple me once I reenter the workforce.
Thoughts?
The funding for college through military service already exists with the GI Bil, however it is not as comprehensive as your proposal.
The problem is, how will schools make up for the loss of revenue if the government does not make up the difference, but merely requires schools to accept these students regardless of their ability to pay tuition and help cover their costs.?
I think that some kind of reduction in student debt is in line with this president's priorities. It is genuinely stimulative and since Sallie Mae would take the biggest hit, it could be paid for through deficit spending. I love the fact that this idea is getting exposure and support.
At one point, it was possible to write off student loan debt through declaring bankruptcy. That is, however, no longer the case. Moreover, that's not the point of this movement.
You are wrong, dear. Student loans CAN be written off in bankruptcies if there is no substantial probability that the individual will ever be able to repay them. Which means permanent disability or impairment.
It is uncommon, but they CAN be erased if they will constitute what is seen as an insurmountable burden.
They cannot be wipe dou tif there is reason to believe that the loanholder WILL be ale to eventually repay some or all of the loans.
Between my husband's student loans and the student loans that we took for our kids (so they wouldn't use the "but I can't afford to go to/finish college" excuse) we are teetering on a fine line. Our kids have taken out their own loans as well.
It took my oldest son nearly a YEAR to find a job in his field of study, and it doesn't pay enough for him to live on his own! He was over-educated and was turned down for jobs at gas stations, deli's and grocery stores, so he had NOTHING.
Our youngest two haven't finished yet.
Getting an education in this country was supposed to be a blessing- but it has truly turned into a curse.
Thank you Mr. Applebaum, for taking the initiative and having the courage to bring this into the spotlight.
Being too young and naïve to understand that we were being told fairy tales, we bought it - hook, line, and sinker. Now we're in the worst recession since the Great Depression. People with "practical" degrees can't get the wonderful jobs and salaries we were told would be ours for the taking thanks to outsourcing, delayed retirements, downsizing, rightsizing, layoffs, underemployment...etc. Meanwhile, we've had shortages of nurses and accountants - I think it's because those jobs weren't glamorous enough, or maybe because society didn't put enough value on those professions. We were also supposed to have a shortage of librarians, but society has "fixed" that problem by simply closing libraries or hiring paraprofessionals. And let's not get started on the ridiculous and widening gap in wages and standards of living between the rich and the so-called "middle" class.
BTW I'm a baby boomer (age 62) still paying on student loans for Grad School and with little hope of retiring before I'm 75 (thanks to doing away with fixed pensions and tying retirement funds to the stock market). But can't complain when I compare my lot to that of many others who have been screwed far more. I still have a job, am in relative good health, and have fairly good health benefits (at least at the moment).