Generation Debt

MSNBC reports some ideas for paying off student loans for those of us who are stuck with high interest rate consolidation loans. The article suggests looking into the following options:

-Taking out a home equity line of credit with a lower (but variable) interest rate.

-If refinancing a mortgage, to do a cash-out refinancing. ("That's when you refinance your mortgage for more than you currently owe, in this case the amount of the higher-cost student debt, and use those proceeds to pay it off.")

-If we've consolidated with the Federal Direct Loan Program, to switch to the Federal Family Education Loan program.

-Pay off federal loans with private education loans. ("This strategy makes sense only if you have a pretty high interest rate, in the 8 percent to 9 percent range, and plan to pay off the loan in three to five years...")

-Take out new student loans (clearly, this one only works if you're going back to school). However, taking out a new loan will pull the average interest rate down only slightly.

There's no mention of the legislation pending in Congress to address the issue of one-time consolidation in the article.

Posted by Diana at 10:08 AM | Permalink | Comments (5)

A Jackson Clarion Ledger article discusses debt myths and facts, including the following (that most of us know, but it bears repeating):

"Money Myth: Student loans are dischargeable through bankruptcy.

Financial Fact: Student loan debt (either private or government-backed) for the most part is not dischargeable in bankruptcy. There is a provision that allows student loan debt to be wiped out, but only in hardship cases. A hardship discharge is a near impossible standard to meet. You have to prove you can't maintain a minimum standard of living for yourself or any dependent if forced to pay the debt, and that you can't pay the debt at the time of your bankruptcy filing or in the future."

Posted by Diana at 10:23 AM | Permalink | Comments (0)

Here's a news story about Student Loan Eliminators, a non-profit that has put together a program to allow graduates to pay off at least some of their student loans (up to $5000), by volunteering at local participating non-profit organizations.

I've also gotten some email from you guys asking me about Right Rate Reconsolidation. (Some people have also gotten the same offer from FinancialAid.com, but I couldn't find information about it on that website.) Looks to me as if this only works if you consolidated with the Department of Education, or if you have new student loans to add to a previously consolidated loan with a private bank. So this might work for some of us, but not all of us.

Posted by Diana at 10:08 AM | Permalink | Comments (8)

Once again, Michelle Singletary is thinking of student loan problems (those of future generations, anyway).

She outlines an idea propounded by former Secretary of Labor Robert Reich: "What would you think of a program in which people attending graduate school would pay back a small percentage of their annual salary over a 10- or 15-year period? Everyone would pay the same percentage regardless of his or her income.

All the money would go into a general student loan fund and then be loaned to others going to graduate school. Private lenders could provide the loans, which would be guaranteed by the federal government." What do you think? Would something like that have helped us?

Oh, and here's another article on our indebted generation from the Christian Science Monitor:

"Trying to get by. Those four little words echo plaintively around the country as young adults struggle to get established and stay afloat. Saddled with record-high college loans and credit-card debts at a time when wages are stagnant and the job market is tight, they may be the most indebted generation of young Americans ever."

Interestingly, the article gives advice on negotiating lower interest rates with creditors, it fails to mention that you can't do this for student loans once you've consolidated.

Posted by Diana at 11:36 AM | Permalink | Comments (0)

Tomorrow's your chance to make your voice heard. Has your representative ignored your issues or paid attention to them? Has he or she taken action on student loan issues or let them fall by the wayside? Now's the time to take action. Not sure how your representatives have voted in the past? Check out Project Vote Smart and look at their records. Then head out to the polls tomorrow and make your choice, keeping in mind our crucial issue of student loan consolidation refinancing.

Posted by Diana at 11:11 AM | Permalink | Comments (0)

Students Get Creative to Pay Off Loans, an article from the Miami Herald.

"If you've already used your one-time ticket to consolidate your student loans and you're now stuck with a less than attractive rate, it pays to get creative." The article suggests using a home equity line of credit to pay off student loans, as well as suggesting switching federal loan programs, paying loans off with private education loans, or taking out new student loans. Unfortunately, it does not mention any of the current consolidation refinancing legislation before Congress.

Posted by Diana at 11:37 AM | Permalink | Comments (0)

Found a short story from Scripps Howard News Service outlining generally both presidential candidates' stances on higher education. The story noted that "[h]igher education experts are resigned to the fact that neither candidate considers higher education a front-burner issue in this campaign."

As we inch closer to Election Day, let's write our candidates, local and national, and ask them their position on the issue of student loan consolidation refinancing. If a candidate is speaking in your area, try to go see him or her speak, and ask him or her questions. These people want your vote, so they need to speak to your issues.

Posted by Diana at 11:08 AM | Permalink | Comments (0)

If you check this site regularly, it probably seems like we never update. I just wanted to let you, our loyal readers, know that we comb the web daily to try to find news, any news, that's relevant to our goal of getting relief in the form of refinancing or reconsolidation passed. There just isn't much out there right now.

The bill we'd love to see passed, H.R. 2711, is sitting in committee, along with all of the other higher education bills. Congress seems focused on bills that deal with prospective and current students, not bills that help graduates. It's my humble opinion that our issue won't be dealt with in the Higher Education Act reauthorization (which I think is due to happen by August 31, 2004). It's further my opinion that nothing at all will happen on our issue until after the election, and even then we'll have to push it again.

I'm one of those stuck with an 8.25% interest rate, I feel the pinch every month when I write the checks, just like you do. So what can we do? Let's turn some of this election year campaigning to our advantage. Write your candidates, ask them their stance on this issue. Show up at campaign events and try to get a question in, or carry a sign or flyer. Call in to your local media, tell reporters that this is an important issue to you. What's the one message to make clear when you do all this? "I'm a registered voter, I'm going to vote in this election, and this issue influences my vote."

Posted by Diana at 10:09 AM | Permalink | Comments (2)

The Campaign for America's Future and MoveOn have organized a new site called Send Bush Your Student Loan Bill. The site (which is supported by ClickBack America, PunkVoter, United States Student Association and ACORN) has you send an email to the President as an invoice for the extra $5,500 that it will cost per student on their student loans under the rules of HR. 4283. They have additional links to facts on the growing cost of higher education and the pitfalls of the College Access and Opportunity Act. Definitely go check it out!

Posted by Liz at 12:32 PM | Permalink | Comments (0)

Student Loan XPress has a $50k sweepstakes to pay off student loans. "Borrowers may enter the sweepstakes once daily, and they do not need to apply for a consolidation loan to enter." This is the entry site. What the heck, here's hoping one of us wins! If you do win, use a little of your fabulous publicity to draw attention to the issue of student loan consolidation refinancing, ok? ;)

Posted by Diana at 09:57 AM | Permalink | Comments (2)

Found a random website on college courses with a page on reconsolidation. They recommend that borrowers take a few credit hours of coursework in order to be able to reconsolidate. I've actually thought about doing this... :)

Posted by Diana at 04:19 PM | Permalink | Comments (9)

Even Generation Debt has to have a spot of fun sometimes, so we bring you this Canadian assessment of the worldwide student debt problem by Matthew Mernagh of Canada. Written in the grand satirical tradition of Jonathan Swift's "A Modest Proposal," the author proposes a creative solution to student debt problems. Enjoy.

Posted by Diana at 02:24 PM | Permalink | Comments (0)

Here's to South Carolina! If what's been going on in South Carolina and the petition is indicative of our strength, then the South indeed will rise again!

South Carolina is DOMINATING the petition drive, and leaving the other 49 states in the DUST! Here's to the "Smiling Faces and Beautiful Places" down in SC!

South Carolina wants to reduce its graduate student loan debt ... do YOU? It's very simple: participate, sign, spread the word and we have a chance to win. Don't, and you and the millions of others like you won't.

And guess what ... we're 52 shy of 1000. Just 3 days ago, we were at 800. South Carolina and others are putting in some GREAT work!

Think we can hit 1100 by the end of the weekend? Think we can become that much stronger in sending Congress a message by the end of this holiday weekend? I think we can!

FYI: I'm not only a cheerleader. Today, I sent my college fraternity an e-mail asking everyone to sign, and I also sent my b-school alumni associatiation information on our efforts. I'm good for some new signatures. Are you?

Sign the petition if you haven't, get our notifications, then send information on our collective efforts to your networks. Let's get serious and send a strong message to Congress!

South Carolina is serious. We've got 49 more states to go!

Posted by Gerry at 04:08 PM | Permalink | Comments (0)

Any comments welcome here...

Posted by Liz at 10:42 AM | Permalink | Comments (23)

Have something to tell us? Any leads we should follow or things we should all talk about? Feel free to comment here about anything and everything you have to say regarding Generation Debt. This is your open forum until I can get the message board working correctly.

Posted by Liz at 10:19 AM | Permalink | Comments (9)

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Posted by Liz at 12:49 PM | Permalink | Comments (1)

One of the ways that you can help spread the word is to contact your local alumni association. Most of them put out quarterly newsletters where this information should be talked about. Student loan refinancing affects nearly all recent alumni and that's a great way to get the information to a wide range of people quickly.

Think about it... most of the people that put together alumni newsletters and bulletins probably have to search long and hard for news stories. Most of them will be more than willing to hear you out and help spread the word. If your local associations are in need of any further information, feel free to have them contact us.

Posted by Liz at 08:09 PM | Permalink | Comments (0)