Student Loans Are Set Up to Screw Students
We need to fix the system now, argue two op-ed writers
By John Johnson, Newser Staff
Posted Jun 5, 2013 1:21 PM CDT
   (Shutterstock)

(Newser) – One fundamental reason the nation's student debt problem is so awful is that these loans "aren't loans, at least in the traditional sense," writes David Dayen at Salon. Thanks to misguided laws, they can't be refinanced and the debt can't be shed through bankruptcy. To make matters worse, the government uses an "army of private debt collectors" to harass student borrowers without relief. "How do we quit loading up 18-year-olds with a risky gamble that could impact the rest of their lives?" Some interesting proposals are out there, including one to refinance student loans at 4% and another that would link the amount students have to pay back to their income.

"Ultimately, keeping college affordable is the answer," writes Dayen, and Katrina vanden Heuvel at the Washington Post hits on a similar theme today. "This isn’t complicated," she writes. "Washington should be moving boldly to make advanced education affordable for all. The federal government should be increasing grants to states for public colleges, on the condition that the states increase their own contributions and act to curb college costs." Cracking down on shady for-profit colleges also would help. Plenty can be done, and vanden Heuvel writes that she hopes "student loans may be to this generation what the draft was to the boomers—the government folly that afflicts them personally and rouses them to act." Click for her full column, or for Dayen's full column.

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jfarley
Jun 10, 2013 10:05 PM CDT
snafu
ranger1
Jun 7, 2013 3:34 PM CDT
David & Katrina/s article very clearly pointed out the huge problems that are already upon us and the future does not lok good. As a parent of a son who just graduated from graduate shoool and a daugher how is a senior in college I find the intrest rate usuary. The banks or government borrows at less than 1% then raises the intrest to more than 7% on people just starting out, no jobs or vastly underemployed a formula for disaster. The universities and colleges are also to blame; until recently there was little talk of the huge debt they concentrated on rasing fees; tution, services and room and board hell with our customers the students. Every generation in the past forty years have had student debt but manageable. All five of my daughters house mates will owe six figure amounts upon graduation. Unless they win the lottery; inherit a good deal of money ;these ladies will be living together ( I call it group living) ;or with parents because at best they will attain a job that pays 35 to 55 thousand dollars a year which means a college loan payment of approximately 1,200 a month; good luck in these educated critical people buying homes, furniture,, cars etc. Most will not be parents not because they do not want children they will not be able to afford children. The rates should be lowered immediately to more than 2 points above prime not to exceed 4%. This would lower monthly payments. Lastly if the 20's and 30 somethings along with the 40's, 50's who are the parents of these kids do not start pressuring their elected officals to immediately lower rates then good luck to these generations being able to afford the American drean of home ownership and raising a family. Write, speak; think and organize the only way to get this changed. Thanks Bob
kawahchan
Jun 6, 2013 10:05 AM CDT
(R) 2014 & 2016 Gov. RICK PERRY Report: The 2016 Gov. RICK PERRY presidential candidacy will DEBATE and INTRODUCE how to grant the federal loan interest-rate(s) to charge a new college student loan ranking, the student loan risks caused "Default", "Delinquency", and "Forbearance": We plan to discuss to calculate the 1) LOWEST student loan interest-rate to the GPA 4.0+ (A students); 2) LOWER interest-rate to the GPA 3.0-3.x (B students); 3) Average LOW interest-rate to GPA 2.0-2.xx (C students); 4) HIGHEST interest-rate to GPA 1.x - "F" (Scholastic Probation & Suspension Students).