Student loans add to angst at Occupy Wall Street

[ellisonz]

Student loans add to angst at Occupy Wall Street
Many of the twentysomethings protesting in Manhattan have racked up sizable debts, and some are left to wonder whether their diplomas may be worth less than their cardboard signs.



Nate Grant, 22, takes part in the Occupy Wall Street protest in New York. The New Jersey resident has $90,000 in student loan debt. (Carolyn Cole, Los Angeles Times / October 25, 2011)

By Geraldine Baum, Los Angeles Times

October 25, 2011, 8:11 p.m.
Reporting from New York—

For almost a week, Nate Grant has sat cross-legged on a wall at the Occupy Wall Street encampment, holding a cardboard sign that bears his scrawled grievance: "Students Ought Not Be a Means of Profit."

Strangers have harangued him: "Get a job, you commie." Tourists have photographed him. Others have stopped to engage in existential standoffs. "I have to pay interest on my car loan," a banker told Grant. "What's the difference between that and you paying off a student loan?"

This sparked a debate that lasted so long that the 22-year-old protester from New Jersey missed out on getting a free sleeping bag. He spent his first night at the protest sleeping on cold concrete.

With the nation's student loan debt approaching $1 trillion, the issue has also generated debate in Washington. The Obama administration announced plans Tuesday to expand a government program to help 1.2 million borrowers reduce their payments and consolidate their student debt.

http://www.latimes.com/news/nationworld/nation/la-na-occupy-student-loans-20111026,0,7388368.story

I'm waiting to see the particulars to figure out if this will help my Stafford loans perhaps. C'mon Obama. :shrug:

[Tx4obama]

1. Here's the statement from the White House

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=433x806033

[Skittles]

2. this is REALLY good

I believe President Obama HEARD those students :thumbsup:

next step - find out why, like medical costs, tuition has risen WAY PAST what could be considered normal

[ellisonz]

4. Gives me some options.

I'd still like to see a retroactive reduction in the interest rates from 6.8% but I'll take what basically amounts to income based deferment :shrug:

[bluestateguy]

3. I'm not for student loan amnesty, just allowing it to be dischargeable in bankruptcy

And that should not be easy to obtain. As it stands now you can't discharge loans unless you are permanently disabled and unable to work. I would change that such that loans could be discharged if jobs in your field simply do not exist, and you could prove that you worked very hard to look for a long period of time.

On the other side of the coin, I don't think student loans should just be given out like candy anymore either. Maybe a little bit of discretion by the lenders is called for here too. That could mean having a gentle conversation with a still wet behind the ears 18 year old who wants to take out massive student debt to attend a lowly ranked school and major in a field that has been proven to not be very lucrative.

Stopping federal backing for student loans for for profit universities should also come to an end.

[Selatius]

5. I think Obama's proposal is a step in the right direction, but we need to walk miles for this.

If we diverted the resources wasted in Iraq to public education and expended it on expanded Pell Grants for everybody, nobody would be graduating with 90,000 in student loans.

The long-term problem I see happening is that with student loan debt getting higher with each class graduating, we're going to see a workforce that is sapped of even more purchasing power the second they leave college. As anybody with a cursory understanding of economics should know, aggregate demand for products and services is the primary driver of the economy. If aggregate demand is sapped, the whole economy will suffer in the form of lay-offs and higher unemployment and greater underemployment. People who would otherwise be spending money on products and services are instead using it to pay off debt to banks or to the government. It doesn't really help employers if fewer customers can buy their products because the money is tied up paying off loans.

[ellisonz]

6. Agreed. This is a national crisis.