Student loan | State AG to combat poor <b>student loan</b> customer service | Minnesota <b>...</b> |
- State AG to combat poor <b>student loan</b> customer service | Minnesota <b>...</b>
- Are <b>Student Loans</b> Bringing Back Indentured Labor? | Crooks and <b>...</b>
- Burdened with Record Amount of Debt, Graduates Delay Marriage <b>...</b>
- Michigan College Guarantees Graduates Make $37,000 A Year, Or <b>...</b>
| State AG to combat poor <b>student loan</b> customer service | Minnesota <b>...</b> Posted: 30 Dec 2014 10:35 AM PST Minnesota Attorney General Lori Swanson Jim Mone / AP file Minnesota Attorney General Lori Swanson has drafted legislation that would combat poor customer service around student loans. Swanson said students and their parents often can't get straight answers from banks and loan-servicing companies about the terms of their borrowing. "They try to call the servicing companies and get basic information like: What do I owe? What's the interest? How do I consolidate my loans? If I don't have a job afterward, what kind of payment plans do I have to avoid dinging my credit?" Swanson said. "And they can't even get basic answers like a copy of their contract." Tom Kosel, legislative chairman of the Minnesota Career College Association, says he personally finds it fair. "As long as our goal is to provide students with the information they need, it's good policy, and it's good procedure." Swanson's office has drafted legislation that would require student loan companies to provide such information clearly and in a timely manner. The law would not affect national banks or federally guaranteed student loans. Swanson said she's talking with lawmakers who are interested in sponsoring the bill this session.  |
| Are <b>Student Loans</b> Bringing Back Indentured Labor? | Crooks and <b>...</b> Posted: 30 Dec 2014 04:10 PM PST By Ryan McNamara The American system of financing higher education is broken. Instead of freeing students to use their talents in creative ways, it saddles them with a form of oppressive debt—to the detriment of themselves and of society. Indentured servants made up a large part of the workforce in colonial America. These were typically young people from Europe who paid for their passage to North America by working for a set number of years (usually between four to seven) as virtual slaves. This form of indentured labor disappeared from American society in the early 1900s. But the staggering burden of debt incurred by today's college students—in which young people pay huge fees for the opportunity to work for a living wage—has been compared to a modern form of indenture. In taking on such indebtedness, students are only trying to keep pace with the ever-rising cost of a college degree. Over the last 40 years, tuition and fees at U.S. schools have increased almost twelve-fold, far more than food, housing and even medical care. *** Public colleges, traditionally the educators of working-class students, no longer provide an affordable alternative to high-priced private institutions. Sharp cuts in state funding in recent years have shifted more and more of the costs to students in state and city schools, with an inevitable rise in student debt. The social costs of this relentless inflation in higher education are substantial. At a time when so many new jobs call for college-level skills, the percentage of high school graduates enrolling in college has actually been declining: from 70.1 percent in 2009 to 65.9 percent in 2013. An "investment" in a college education today will still pay off over the long run in terms of higher income. That's something upon which economists who do cost-benefit analyses generally agree. But borrowing to pay for college tuition isn't like borrowing money to start a business. It has a much greater effect on society because of the kind of career choices it influences people to make. And because of the choice they must make, before they can choose a career. ↓ Story continues below ↓ Debt You Can't Escape To start with, the price of a college education is the charge people have to pay to gain access to a labor market. That makes it essentially a "transportation fee"—in labor studies, that's a charge people have to pay to gain access to a labor market. And here's the rub: student debt cannot be discharged. Unlike most every other form of debt in the United States, such as credit cards and mortgage payments, you cannot declare bankruptcy to get rid of it. The hang-time of student loans is effectively limitless. An estimated two million Americans 60 years old and over are still paying off student loans. And given the continuing rise in college costs, this number is sure to skyrocket in the coming years. On top of this, collection agencies have extraordinary powers to collect on student loans—powers that far exceed their ability to extract payments from other kinds of debtors. They can garnish wages, take income tax returns, and demand a portion of Social Security checks. Such tactics can force those who fall behind on payments into a death spiral of inescapable debt. *** Andrew Ross, a professor of sociology at New York University who focuses on labor issues, sees a clear parallel to traditional forms of indenture: "We have reached the point, in the 21st century 'knowledge economy', where a majority of skilled employees must go into debt in order to labor. Practically speaking, indebtedness is the condition of entry into the workforce." There are modern parallels as well. In much of the Middle East a system of indentured labor, known as kafala, transports poor workers from countries like India, Bangladesh, and Pakistan, to rich Gulf countries like Qatar and the United Arab Emirates, where they perform manual labor. These workers pay exorbitant recruitment fees that take years of labor to pay off. Frequently deceived about the size of the transport fee and the wages owed them, they often find themselves unable to break free of debt. Like the kafala workers—or the Latin American migrants who pay large sums to be transported to work in the U.S.—the vast majority of American college students today must go into debt for a chance at decent employment, and then must spend years and even decades paying back the loans that afforded them entry into the labor market. Debt's For Sure, But Not A Job In some ways, says Professor Ross, today's students have a harder time than indentured laborers in the past. In traditional forms of indenture, employment was more or less guaranteed. "That is not the case with modern knowledge workers---which makes their condition even more precarious." In addition, the fear of defaulting keeps some workers from taking career chances that might benefit society but all but guarantee a lower income—think social worker, artist or teacher. Instead, people opt for the certainty of a bigger corporate paycheck to cover their student loan payments. The current economic trends of education are perverting the traditional role of a college degree. Rather than boosting upward mobility, the crushing weight of college loans may be forcing millions of students into a stultifying life-sentence of indebtedness, while depriving society of the benefits of a flexible and creative workforce. |
| Burdened with Record Amount of Debt, Graduates Delay Marriage <b>...</b> Posted: 07 Oct 2014 06:04 AM PDT I now pronounce you in decades of debt. Student loans have hit a record high of $1.2 trillion, putting a crimp in The American Dream of owning a home and starting a family. And it's affecting the broader economy too. "People cannot participate in the American dream because of student debt," said Natalia Abrams, executive director and co-founder of StudentDebtCrisis.org. Cody Hounanian, 23, graduated from University of California, Los Angeles last year with about $30,000 in debt. He worked part-time at an In-N-Out Burger restaurant near campus throughout college and now works full-time as a manager at Whole Foods in his hometown of Santa Clarita, Calif. He is in the process of applying to law school. He's not married, doesn't expect to be anytime soon and puts part of the blame on the burden of student debt. "I'm sure there are people who say, 'I don't want to have a husband or a wife who is $100,000 in debt,' but I think the real problem is more indirect. There's almost not enough time to go out and start a family," he said. "It's an aspect that people forget. Planning and investing: forming relationships get in the way of that."
"I don't want to sound materialistic, but there's a financial aspect," he said. "In finding someone, there has to be a cash flow in order to take someone out." Abrams said that even people with decent-paying jobs are delaying that walk down the aisle because of debt. "If you owe $100,000 to $150,000 in student loans, you're paying $1,000 to $1,500 a month. It's cost-prohibitive," she said. "Everything from saving for a home to saving for retirement is completely off the table," Abrams said. Student debt isn't the only reason young people are putting off marriage, of course. Women are putting significantly more time into earning advanced degrees. And jobs for less-educated Americans have withered, causing a longer search for a career that can provide a middle-class lifestyle. While there is no specific data on student debt-related delays to marriage, a recent study by the Pew Research Center shows that a record number of Americans have never married. The study found the median age at first marriage is now 27 for women and 29 for men. In 1960, the median age was 20 for women and 23 for men. Student loan experts say indebtedness is weighing heavily in the young adults' decisions to get married, buy homes, and save for retirement, however. Heather Jarvis, an attorney in Wilmington, N.C., who specializes in student loans and student loan education, said she considered her student debt when getting married and merging finances with her husband. "Getting married actually reduced the loan payment assistance benefits from my law school. My debt became more squarely on my shoulders upon marriage," said Jarvis. According to the Internal Revenue Service student loan interest deduction regulations, graduates may not claim tax deductions on their qualified student loans if they are married and file separately from their spouse. If a married couple chooses to file jointly for a student loan interest deduction, they cannot be claimed as dependents on someone else's tax return. Debt burdens "do limit students and graduates' choices, influencing their timing," she said. Jarvis, who graduated from Duke University School of Law in 1998 with $125,000 in student debt, just recently finished repaying her private loans. She now has to pay off her federal loan debt from law school, which is about $30,000 – just above the current national average for undergraduate borrowers. "People are delaying marriage, looking for more fulfilling partners, delaying childbearing. This demographic is people in their late 20's, and most demographers would agree with that," said Dr. Robert Bozick, a sociologist at the RAND Corporation in Santa Monica, Calif. Bozick published a study in June that found student loan repayment affected marriage timing for women, though less so in men. As college tuition rises, Bozick said, it's likely that "we are going to see more non-traditional lifestyles" than in generations past, emphasizing the "greater levels of debt." He has found more young people have changed how they weigh whether or not they're going to disrupt their careers for marriage, when in previous years, it was often the reverse. Dr. Bozick himself earned his master's degree from the University of Maryland, College Park, in 2001, and his doctorate from Johns Hopkins University in 2005. He has not yet finished repaying his student loans. First published October 7 2014, 5:57 AM |
| Michigan College Guarantees Graduates Make $37,000 A Year, Or <b>...</b> Posted: 29 Dec 2014 10:26 AM PST Consumerist is currently testing a new user experience. If you received an invitation to participate in the beta test, please sign-in below. Interested in participating? Learn more here. {* #userInformationForm *} {* traditionalSignIn_displayName *} {* traditionalSignIn_password *}{* traditionalSignIn_signInButton *} {* /userInformationForm *} {* #forgotPasswordForm *} {* traditionalSignIn_emailAddress *} {* /forgotPasswordForm *} If you are part of the beta test group, you will receive a link that will allow you to create a new password. If you are not part of the test group, you can learn more here.  |
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