The student loan system is propping up weak real estate markets in college towns by using guaranteed student funds from student loans to pay for outrageous rents. Many of these communities would not be able to afford their lifestyles (see. Davis, California vs. Woodland, California rental rates) if it was not for the fact they the student loan money is being laundered through attending students, and funneled directly into the local economy through increased rents and cost of services.<p>At this level it's a scam.<p>As anecdotal evidence, my father went to Berkeley when there was no student loan structure, and the community was considered a poor real estate investment, since it was commonly known as a 'Student Ghetto'. A term which has since disappeared as rents in Berkeley are among the highest in the East Bay. All on the back of the students financing their housing costs on student loans.<p>Again, it's a scam.<p>The students don't get a better education than my father, and while the housing might be nicer, it's debt that they have to pay well into their later years, as opposed to being able to graduate debt free.<p>My father thinks this is directly attributable to the death of the student free speech movement and other student political enterprises, since being forced to accommodate ones debt takes priority over trying to change the world, or fix the system. In short it becomes a type of indentured servitude, where lower and middle class people are unqualified for good paying jobs without the debt, and with the debt, they are forced into high level debt maintenance, and can't have any other discussions about where society is going, or how it is getting there.
"A report issued late last month by the Consumer Financial Protection Bureau supports this view. Even though the economy and labor market have improved, student loan borrowers are experiencing high distress levels compared with borrowers with other types of consumer debt, the government report found. More than one in four student loan borrowers are delinquent or in default on their obligations."<p>1 in 4 are delinquent or in default. Read that again.<p>This situation is a failure mode, and is only fail-safe for the lenders who forced it there. This means that on some level, the lenders knew their interest rates were impossible to keep up with, yet knowingly went forward anyway because they knew they could get away with it. The USA's system is utterly bought out against the common good. At this point, I think we'd be better off with a widespread boycott of student loan payments in order to bankrupt the lenders. They can't call collections on all of us, and there would be riots if they tried.<p>I know that a lot of people are jaded as a result of societal failure to address the student loan crisis. These intentional failures for the sake of profit have long term consequences, as nearly everyone can blatantly see.<p>"Some 41 million Americans owe $1.2 trillion in student loan debt. The median debt burden among borrowers was $20,000 in 2014, up from $13,000 in 2007."<p>This is an entire generation worth of people that have been cursed to start their adult lives with an anchor around their neck. As though the brutally competitive ultra-hostile economic depression they graduated into wasn't enough to weigh them down to begin with.<p>To top it off, the boomers find a way to hold us in contempt.
"It brought a case against Discover Bank last summer, saying it inflated the amounts it said borrowers owed on their loans.<p>Discover Bank paid $18.5 million without admitting or denying wrongdoing."<p>These fines are just a calculated cost of doing business for companies like Discover, Sallie Mae, etc. They take the likelihood of getting caught breaking the law, multiply it by how much they'll have to dish out when they get caught, and subtract that from what they'll make by extorting their "customers."<p>In this case, Discover made a good financial decision on their part. Hooray for creating value for the shareholders.
I'm in arrears on my student loans. I'm one of the millions that is.<p>The first few lines of this article sums it up completely as to why.<p>"Between misdirected payments by one of the companies servicing his loan and the abusive collection tactics he encountered when he fell behind ..."<p>These companies that bought the loans on cheap from the secondary market, make more money from penalties they they do from loan servicing. And they have as many tricks up their sleeves as they can discover to help make that fact true.<p>They are the true sharks in the whole equation, with guaranteed support from the government and the tax payers.<p>I recommend that every last student default as things are now. If I were in charge of writing new laws for new student loans, which I am definitely not, I would allow them with three additional conditions. 1. They qualify for personal bankruptcy like any other consumer or investment loan, 2. they could NOT be sold off but would be held in a public trust fund, initially funded by public money, and topped up as needed, and 3. (Scandinavia does this) make repayment a modest surcharge in one's income tax. Make a lot, pay a lot and pay off fast. Make a little, pay a little and maybe never pay it off.
Does the fact that you can't get rid of your student loans via bankruptcy mean that students should get the lowest rate possible? Since the creditors will get paid? It seems ridiculous that not only can you not get rid of the loands through bankruptcy, but also that you're not charged lowest-interest-rate deals for them.
Why is the face of these stories always someone who majored in something like "media arts"? Can the reporters not do better? Are they just mining their social circle? Does making it intentionally representative of the kind of person who makes poor life choices to begin with generate extra hate-links?
The companies I have to deal with for my loan for the most part are absolutely disgusting. Two out of three do not allow me to setup recurring payments and do not send email reminders before payment is due. They only let me set up scheduled payments two months in an advance. To keep a rhythm I try to pay every month at the same time, however the worst company does not count those monthly payments against what is owed every 3 months on a random day. Theres no email reminders but if I'm a day late I immediately get an email saying how much I owe and how much extra I have to pay now.