Generation Debt

Here's your close-to-the-end-of-the-month round up of student loan stories that caught our eyes in January:

-Along with all the news about the mortgage loan crisis, we're starting to hear rumblings of the same regarding student loans, from American Public Media.

-Candidates talking about loan issues? Well, a little. From NASFAA.

-Tax advice from Kiplinger.

-Loan forgiveness for firefighters is proposed, as well as for lawyers in Florida and Illinois.

-A year ahead preview on student loan issues from Inside Higher Ed.

-An OpEd on the legacy of debt, and another piece on debt in general (and one on student loan worries).

-More on those free money offers borrowers get in the mail.

Student Loan Debt Clock = $472 billion.

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"What I was going to say," said the Dodo in an offended tone, "was, that the best thing to get us dry would be a Caucus-race."

"What is a Caucus-race?" said Alice; not that she wanted much to know, but the Dodo had paused as if it thought that somebody ought to speak, and no one else seemed inclined to say anything.

"Why," said the Dodo, "the best way to explain it is to do it."

-Alice in Wonderland, Lewis Carroll

Today it starts, the true kickoff to the 2008 presidential campaign: the Iowa Caucus. (For news and information regarding the Iowa Caucus, check out the Des Moines Register caucus section, Iowa Caucus 2008, and IowaCaucus.com. And for an overview on caucuses in general, check out this Wikipedia entry.)

To gauge the impact of the Iowa Caucus, check out this breakdown of past results from the Des Moines Register, which shows that a win tonight and a strong second place finish bodes well for those who end up in front. Now is the time to ask the candidates who come through your part of the country what they plan to do in terms of student loans. Do they care about those of us who are struggling to pay our loans under the yoke of usurious interest rates, or do they only care about future students? Are they for the citizen borrowers, or the corporate lenders? What are their stances on the reauthorization of the Higher Education Act, and will that reauthorization provide students and borrowers with much-needed relief?

Remember this quote from Sam Seaborn on the West Wing:

I worked in a State Assembly race in Manhattan in a district where Democrats outnumbered Republicans 16 to 1. But everywhere we went, there'd be one lone poster of a right-wing nutbar who wanted to to eliminate the income tax. And he was holding up signs and canvassing everywhere and bugging the local reporters until we had to comment on it. So I introduced myself to his campaign manager, and I said, "What are you doing? Your candidate doesn't have a chance and neither do your issues." He said, "This is what I believe. And no candidate gets to run in my district without speaking to my issue."

Make the candidates speak to your issue any way you can this year.

Student Loan Debt Clock: $ 470 billion.

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...and the holiday season is suddenly upon us. There are always plenty of stories about debt at this time of year, and this year is no exception:

-A Cornell student writes on the culture of debt.

-American Medical News writes on the student debt of physicians, as does CNN, while the Ledger Independent notes that public defenders have much student debt as well.

-NorthJersey.com has an article on graduates buried by debt, as does the News Advance.

-In Illinois, the Quincy Herald-Whig reports that "Gov. Rod Blagojevich announced last week $1.22 million in grant funding for Illinois Veterans Home nurses who are paying off student loans."

-GenDebt Commenter Joe has started a website called Advice On Time to provide free advice on all sorts of issues, including some debt issues.

-Meanwhile, Congress is still working on reining in student loan lenders' deceptive marketing practices.

Student Loan Debt Clock is at $465 billion.

Have lovely Thanksgiving from GenerationDebt.

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When October rolls around, my thoughts run to electoral politics, whether it's actually an election year, or, like this year, just feels like one (the presidential election is still well over a year away, I'm getting tired already). So check out some stories on the student loan positions of those jostling for the presidency in 2008 from The Chronicle of Higher Education (also here and here) and The Times and Democrat.

-More stories on Congessional student loan reform from The Seattle Times, The Chicago Sun-Times, The Coumbia Spectator, The New Paltz Oracle, The Sheboygan Press (this one is against government student loans), The Washington Post (letter to the editor), and The Toledo Blade.

-Stories on the student loan debt burden from The Contra Costa Times, The Columbia Tribune, CBS News, Daily Press, Business Week, The Buffalo News, The Daily Bruin, The Pepperdine Graphic, and The Winston-Salem Journal.

-In other news, D.C. has a program to help medical workers pay student loans in exchange for service in low income parts of the District, Scott Burns wonders if going to college pays, and Kiplinger discusses whether student loans affect a mortgage application.

Student Loan Debt Clock is at $462 billion - looks like we're back to a growth spurt.

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And away we go...

-Articles on recent student loan legislation from: AEI for Public Policy Research, The Village Voice, Reuters (also here), The New York Times, The San Francisco Gate, The Baltimore Sun, The Washington Post, PBS, USA Today and The Star-Telegram.

-Articles on student/graduate debt from: The Chicago Tribune, BusinessWire, NJ Voices, Time, The New Yorker, The UNLV Rebel Yell and The West Virginia Record.

-Alan Collinge thinks that the recent student loan legislation didn't go far enough. And here's an article from Anya Kamenetz on debt issues in the upcoming presidential election. USA Today advises consolidation "only if it's right for you".

-Finally, just for fun (er, sure, fun), check out this inflation calculator. Calculating what someone who graduated college in, say, the 70s or 80s paid in terms of today's dollars can be eye-opening.

Student Loan Debt Clock: $458 billion - is the new loan legislation helping to lower the clock?

Posted by Diana at 12:15 PM | Permalink

As the days of August swelter on, there's still plenty of student loan news to report. While many in the media are focused on those students just starting out on their debt journey, there are still some that remember the borrowers who are already stuck in it for the long haul. And so we trudge on...

-Not content with sticking it to college students, our friends at Sallie Mae now offer loans for parents for K-12 private schools. Just like the tobacco industry, the student loan lending industry likes to hook 'em young.

-Alan Collinge of Student Loan Justice writes about Sallie Mae's march toward monopolizing the student loan industry.

-More on the student loan scandals from ABC News, the Brandenton Herald, CBS News, Inside Higher Ed, The Daily, and the Washington Post.

-New legislation and potential legislation in Congress may help some or hurt some, reports Inside Higher Ed (also here), the New America Foundation, CQ, the Chicago Sun-Times (also here), the Washington Post letters page, MTV, the Earth Times, US News, NPR, AM New York, News and Tribune, the Post Crescent, the Cleveland Plain Dealer, the St. Petersburg Times, the Christian Science Monitor, and the Springfield News Leader.

-The stories on student debt in general are still coming out, too, such as these in The Nation, the San Francisco Gate, the Chicago Sun-Times, the Omaha World-Herald, and the Fort Worth Star-Telegram.

-One group, the Business and Media Institute, claims that the media are picking on the poor lenders in their news portrayals, mentioning the demonization of lenders and a victimization theme when it comes to borrowers.

Student Loan Debt Clock: $487 billion and ticking away more every second.

Pic via Pandagon.

Posted by Diana at 11:51 AM | Permalink | Comments (1)

The main story in student loan news these days is growing coverage of the student loan payola-style scandal. It basically breaks down into this: Lenders and schools have/had deals whereby schools would push students to a certain lender or lenders in exchange for kickbacks from the lenders.

For those of you wondering if this scandal has or had any impact on those of us with consolidation loans we're now stuck with, the answer is a resounding yes. I remember heading to the financial aid office as a first year law student, asking about financial aid, and being given paperwork from two lenders. I remember not being specifically advised that I could or should shop around (yes, I was naive, and yes, many students are, making them a ripe target for this sort of thing). I remember going with one of the two proffered lenders. I remember having to then consolidate with that lender when I consolidated in 2001, as the single lender rule was still in place then. And now I'm locked in a loveless marriage with a lender that takes my high interest payments and hands them over to a CEO who uses them to fuel a private jet to fly Congressmen to vacation spots. Yes, I can see a connection between this scandal and the way things are now.

More on the scandal from The Tomah Journal, Campus Progress, US News, Medill Reports, OnPoint Radio, Guardian UK, The Times-Gazette, Salon, Reuters, and Reuters again (Senate hearing on student loans is today, by the way).

It's also interesting to note that the Department of Education has now changed its rules regarding federal student loan programs, requiring "universities to include at least three lenders on any list recommended to students and that would ban many of the incentives loan companies have been offering colleges and university officials to win student business."

In more general loan news, here's an opinion on debt burden from the Asbury Park Press, a piece on candidate stances on student loans from the Yorktown Patriot and one from Inside Higher Ed, an article on Obama's loan stance from Reuters, a story on debt from the Patriot Ledger, a story on debt from Gloucester County Times, a column about previous consolidation from CNN, a story on rising debt from the Portland Press Herald/Maine Sunday Telegram, commentary on another way to pay back loans, a plea for loan relief from someone writing in to the LA Times, an analysis of Sallie Mae using racial politics from CNN, and a feature on being young and in debt from USA Today.

Finally, for all of you out there who have thought of filing an antitrust lawsuit against your lender, the Supreme Court just made it harder. "By a 7-2 vote in Bell Atlantic v. Twombly, the Court said 'a bare assertion of conspiracy will not suffice' to get beyond the summary judgment stage in claims under §1 of the Sherman Act." Which essentially means that plaintiffs will have to have proof of conspiracy in the pleading stage, not an easy thing to get early on in a case against a big corporation.

Student Loan Debt Clock: $477 billion - growing faster than a duck pouncing on a Junebug.

Posted by Diana at 11:30 AM | Permalink | Comments (4)

Hello all. Student loan news is heating up even as the weather does this spring, and we have a ton to report:

The New York Times discusses the plight of debt-ridden culinary school grads, and a whole lot of folks get in on the discussion in the blog/comment section. More on the lifelong debt burden of student loans comes from The Daily Southtown, Sys-Con Media, Buzzflash, The Arizona Republic, the ABA, the Temecula Valley News, the Chicago Sun Times, and the National Law Journal.

Kiplinger has a note on loan forgiveness for teachers.

Dealbreaker mentions the sale price of Sallie Mae, and The Independent reports the sale. Note also Saliie Mae's contributions to U.S. Representative Howard "Buck" McKeon.

Meanwhile, the New York Times reports that "JPMorgan Chase & Company invited more than 200 officials in town for the National Association of Student Financial Aid Administrators’ meeting two years ago on a July 4 dinner cruise up the East River", an event that cost over $70,000. That would never happen today, according to JPMorgan Chase, because of the increased attention being focused on the cozy relationship between lenders and schools. Yes, that's right, we've got ourselves a genuine student loan scandal, and just look at all the coverage it's getting:

-The New York investigation: Scripps, WNYC, the Indy Star, Inside Higher Ed, and Time.

-The Congressional investigation: ABC News, Inside Higher Ed, and the Concord Monitor.

-The fallout and commentary regardng both: The Washington Post reports that Theresa S. Shaw (a former sallie Mae excutive, natch), chief operating officer of the Office of Federal Student Aid, is stepping down in the wake of the widening investigations of student loan issues. Education Department official Matteo Fontana was found to hold $100,000 worth of stock in a student loan lender. Ellen Frishberg, student financial services director for Johns Hopkins University, has resigned her membership on "an Education Department committee that helps develop financial aid regulations." Columbia City Paper offers some extreme solutions. The Washington Times comments on both investigations and the industry in general. A Yahoo News opinion column calls for a revamp of the system. An economist's view is noted at the Bangor Daily News.

Student Loan Debt Clock: $473 billion and growing all the time.

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We slide into early spring with news about pending bills in Congress, debt loads in general, and even some (sort of) juicy investigations (as juicy as investigationsregarding student loans can be, at any rate).

-Congress has been hard at work targeting the student loan industry for reform, but will it help those of us who've been out of school for awhile and are dealing with usurious interest rates? The College Student Relief Act looks like it helps undergrads only. Or how about the Married Student Debt Relief Act? It "would double the student loan interest tax deduction to $5,000 for married couples who file a joint tax return when both spouses hold student debt." (No help for me, there, I'm afraid, since I'm single and "make too much money" to deduct student loan interest on my taxes - a "fact" which makes April quite cruel, to me.) Folks in Iowa might be getting some student loan help soon, though, with the introduction of a bill that would give employers a tax break for helping employees with student loans.

-A helpful reminder from the Scripps Debt Advisor: student loans are loans you can only get rid of by paying them or dying. No discharge in bankruptcy, and no real help if you're disabled. For more on how debt sticks with the borrower for a looooong time, check out articles from Red and Black, the Daily Texan, the Cornell Sun, the Shield, the Chicago Tribune, and the Toledo Blade. Bob Herbert has weighed in on student debt recently, as well. Note also that Georgetown Law recently held a roundtable discussion on student debt, and you can check out a webcast of that discussion. And here's a little advice on trying to get lower interest rates for private loans.

-You might have heard that New York is investigating banks and universities for getting too cozy over student loans. You might also have heard that the cases settled. So much for a nice, loud soapbox on the industry.

-Poor Sallie Mae, the embattled underdog (that'd be sarcasm) of the student loan world. Al Lord must be crying into his $18.3 billion stock sale profit over his troubles. More on the student loan lobby (and Sallie Mae) here and here.

-Here's a random opinion column link that we thought you might want to weigh in on from the Yorktown Patriot: "higher education gives little return to society for the enormous resources it sops up." Thoughts?

-For your reading pleasure: Make Love, Not Debt, the blog of a couple trying to work out their debt issues.

National Student Loan Debt Clock: $467 billion - when it rains, it pours.

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Ah yes, that's how March comes in, roaring with student loan news:

-There are quite a few stories about Generation Debt lately, bemoaning the fact that students are stuck in debt for life, but not particularly calling for any specific action or relief: Carolina News 14 ("with some students in for the long haul, financial experts say we may see a generation that is perpetually in debt"), the Globe Gazette ("[t]hirty-four percent of those graduating from college with debt have sold possessions to make ends meet, according to a recent survey conducted by AllianceBernstein Investments, Inc. Forty-two percent of those surveyed said they live paycheck to paycheck, and 27 percent reported they delayed getting a medical or dental procedure done because of their debt"), the Kansas City Star ("it’s time for older generations to realize that things are different. School costs are rising quicker than salaries can keep up. Social Security will be dried up when we need it. Pensions will be read about in history books. The retirement age is creeping toward never"), WFIR 23 News, and the Harvard Crimson ("What concerns us is that not enough of you, at Harvard and elsewhere, will spend your twenties and thirties doing the vibrant and vital work required of every rising generation to advance civilization—be it teaching, producing great works of art, challenging injustice, or defending our nation—simply because these jobs do not pay enough").

-Congress has started moving on legislation to "require banks and other lenders to compete for the right to make federally guaranteed student loans, with the goal of identifying those who could offer the loans at rates that would cost the government the least, and using the savings for other efforts to make college more affordable for students." More here, here, and here. Inside Higher Ed brings up the problem (at least from our point of view) with the legislation: "the House-passed legislation provides no help for the millions of borrowers who are currently having trouble repaying their loans because of high debt levels and/or low incomes. It would have been much better if the House had sought to help these borrowers, for example, by allowing them to consolidate all their federal student loans into a single loan repayment schedule when they leave school and begin repayment. This expansion of existing consolidation provisions would greatly simplify the student loan system by allowing borrowers to refinance their student loans once they leave school." Some people don't want to help graduates, though, or students.

-Possible student loan relief for Kentucky public interest lawyers and Arizona teachers. But the Roanoke Times advises against using home equity to pay of college debt.

-Some folks are suspicious of the relationships between schools and lenders, according to the Business Week.

-Alan Collinge of Student Loan Justice editorializes on student loan abuses, mostly by Sallie Mae, and Today's TMJ 4 investigates predatory student lenders, including Sallie Mae. Check out more interesting Sallie Mae news here, here, here, and here (after reading some of that, I think Al Lord might want to have a chat with Martha Stewart about his stock practices).

-The United Graduate Debt Program offers some different solutions to the problem of student debt.

National Student Loan Debt Clock: $462 billion - just keeps springing forward.

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Now that the first 100 hours of the new Congress has passed (quite a few more hours than that, in fact), there's more news than ever regarding student loan issues, if not particularly our issue. Let's get to it:

-Inside Higher Ed writes (and writes and writes) about the new student loan bill pending in Congress that will cut interest rates (for current students, mind, not graduates), but will the Bush administration oppose it? More on the bill here, here, and here.

-More on the debt problems of graduates from The Denver Post, American Public Media, CNN, and Tuscon Weekly.

-The Student Loan Justice Political Action Committee and a TPM blog from Student Loan Justice.

-Prosecutors and public defenders in South Carolina may get help with their loans.

-And finally, some voices from the other side of the debate, arguing that education shouldn't be subsidized by the government at all, and that a Republican has a more progressive student loan plan than the Democrats.

National Student Loan Debt Clock: $458 billion - feel the love, eh?

Posted by Diana at 3:16 PM | Permalink

The 110th Congress got going yesterday, making history by providing the nation with its first female Speaker of the House, San Francisco, California Representative Nancy Pelosi. The House got started by voting in new ethics rules yesterday, and in upcoming weeks plans to tackle issues such as increasing the minimum wage, implementing the 9/11 commission’s recommendations, easing restrictions on federal funding for stem cell research, authorizing negotiations for lower drug prices under Medicare, cutting interest rates for student loans, and repealing tax breaks for the oil industry. The Senate, led by Nevada Senator Harry Reid, is to deal with immigration reform, expanded stem cell research, and Iraq policy.

There have been quite a few stories in the last few months on the plans of the Democratic majority to lower student loan interest rates, including these in the Lawrence Journal-World, the Mercury News, the San Francisco Gate, and the Ledger.

But not so many articles have discussed refinancing and reconsolidation of student loans, which would ease the financial burden of high interest rates on borrowers who have already graduated. A blog entry on TPM Cafe exhorts the new members of the House and Senate Education Committees to "decline campaign and PAC contributions from Student Loan interests during your term on the Education Committee" in the interest of promoting the welfare of student borrowers as opposed to that of lenders.

Now is the time to renew efforts to apprise our representatives of our problem. Write letters (I have updated sample letters in our Resources section), make phone calls, and write to the media. With all the buzz about the new Congress and its interest in student loan issues, let's make sure our issue doesn't get lost in the shuffle.

Tangentially, check out this article from Kiplinger's on Sallie Mae's profits, an article about couples registering for student loan payments instead of china as wedding gifts, and an article advising that buying a home is not the best step to take to get out of student loan debt.

National Student Loan Debt Clock: $453 billion - happy new year!

Posted by Diana at 2:02 PM | Permalink

Along with snow and holiday things, December brings us more student loan news.

-The Buffalo News notes that lenders are wary of the shift in power in Washington: "Within the student loan industry, the impending transfer of party control is producing waves of anxiety - in part because Democrats have promised that one of their first acts will be to cut interest rates on student loans." More stories on changes in student loan policy along with the change in Congress can be found in the Concord Monitor, CNN, Inside Higher Ed, and the Washington Post. TPM Cafe even calls for an investigation of the Department of Education regarding student loans. Note also that rumor has it that California Representative George Miller will be the new head of the House Committee on Education and the Workforce, with former Chair John Boehner tapped to be Minority Leader.

-The Chicago Sun Times discusses the loan difficulties of young public interest lawyers, noting that "while their salary is a fraction of their private-sector peers, their law school debt may be equally crushing. And that has created a situation in which the offices of prosecutors and public defenders are finding it increasingly hard to hire and retain lawyers." More on student debt consequences: the Orlando Sentinel and USA Today.

-The University of Maryland Baltimore County opines that student loans are barriers to higher education.

-Kiplinger offers general advice on getting out of debt faster. More general student loan advice can be found in this USA Today article, as well as this Newsday article and this Roanoke Times article.

National Student Loan Debt Clock: $449 billion and growing all the time.

Happy holidays to all from GenerationDebt.

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Sorry folks, I just can't help but commandeer that Morrissey song title when I post in November. Lots of links to pass on, so let's get to it.

-The Washington Times has commentary on student loans, including the cash cow they are for Sallie Mae. On a similar tangent, note that one private loan company is holding an all expenses paid meeting for financial aid administrators at the Four Seasons Resort on a Caribbean island.

-USA Today notes median debt levels of graduating students have increased in recent years.

-The Checkout blog at The Washington Post discusses student loans, and asks the key questions: "Are you better off for having taken on student loan debt? Or is the cost of higher ed and the terms and conditions of student loans creating a new type of indentured servitude?"

-The Pittsburgh Post-Gazette discusses graduate student loans, noting that a "financial aid administrators' 2003 survey said that among those who left school in that year, average repayments ranged from 7.4 percent of starting salary for some master's recipients to 16.3 percent for some law graduates." The Post-Gazette further notes that student loan burdens can affect job, family and housing choices.

-A Letter to the Editor in the Fredericksburg Free Lance-Star laments the gain of student loan lenders at the expense of student borrowers.

-The Independent Florida Alligator notes that no one's talking about student debt in this election season.

-One group is lobbying for changes in the Department of Education's loan program, including "limiting student loan payments to 15 percent of any income above 150 percent of the poverty level after graduation ... instead of the standard set rate repayment option, which ignores varying salaries."

This postcard from Post Secret hit home for me, so I thought I'd share:

National Student Loan Debt Clock: $443 billion and ticking higher.

Posted by Diana at 3:46 PM | Permalink

The back-to-school slew of student loan articles has tapered off over the last few weeks, but I do have a couple of pertinent notes/links as we head into the end of October:

-Stanford is planning to forgive student loans for those students who teach. "The loan-forgiveness program applies to graduates of the Stanford Teacher Education Program, a yearlong master's program for K-12 teachers at the university's School of Education. Under the program, STEP graduates will have half of their student loans forgiven after they teach for two years; the remainder will be forgiven after they complete four years of teaching."

-Out in Oklahoma, a similar idea is percolating, with buzz regarding "creating legislation to reduce a student’s college debt if he or she practices [as a veterinarian] in a rural area for a certain length of time."

-Meanwhile, some students and graduates who don't happen to be teachers from Stanford or rural Oklahoma veterinarians recently testified at a hearing at the U.S. Education Department that they (we, I should say) are "drowning in debt" and it's affecting many aspects of their lives: "Some students say they will have to forgo lower-paying careers in favor of jobs that guarantee big bucks to pay off their loans. Others say they are picking graduate schools based on where they'll get the best deal, not necessarily where they'd get the best training."

National Student Loan Debt Clock: $441.7 billion and growing all the time - that is a truly chilling fact for this Halloween season.

Posted by Diana at 11:02 AM | Permalink

Here's a round up of links I've been skimming recently:

-Another article on Anya Kamenetz's Generation Debt book.

-An article on how debt sends grads home to live with the parents, and one on long-term student debt in general.

-One on how student debt burdens futures, including causing some students to drop out or forego college altogether.

-Another Michelle Singletary column on student debt (you can read it here, too), where she notes, "The rising student loan levels are so troubling, it's time we stop saying this is good debt. 'Having over $100,000 in student loan debt is not fun,' wrote one reader, a new lawyer who joined me during a recent online discussion. 'Do I regret going? No, but it certainly didn't pan out the way I thought it would. I am working like a fiend, not getting paid what most people think lawyers make, and struggling daily with money and budgeting. There are hundreds, from my class alone, who are in the same boat.'"

-An article on the rise of private student loans, noting, "In the past five years, tuition at public colleges has increased 57 percent, but the maximum amount students can borrow from the federal loan program hasn't risen a dime — it's stayed at $23,000."

-Finally, some possible good news: information on loan forgiveness for certain professions.

National Student Loan Debt Clock: $438.5 billion.

Posted by Diana at 11:07 AM | Permalink

Fall is arriving (my own personal favorite time of year), and there are even more articles about lingering student debt out there:

-The Detroit Metro Times reports on Generation Debt:"As more and more young people get in too deep, students, parents, educators and lawmakers are proposing solutions. The seeds of a grassroots activist movement against debt are being sown. But is it too little, too late?"

-Meredith McGhan at Nevada Today checks out books on student debt (namechecking us in the process), and exhorts people to get up and do something: "But no excuses — time crunch or no, young people need to become much more proactive for social change, even if it’s just to join an online group and send a ready-made email to one’s representative or senator."

-A Denver CBS affiliate reports on the crush of student loan debt:"Some graduates will be discouraged from going into education and public-service fields because their salaries won't be high enough to offset their loan payments. Some will still be paying off their debt when they should be saving for their children's education. Others won't be able to afford to buy a house or car. There are several factors driving the student-debt dilemma. But simply put, experts say the cost of higher education has continued to climb and financial aid isn't keeping pace."

-More on mounting student debt from the Durango Herald Online, the Youth Policy Action Center, and the Atlanta Journal-Constitution.

-On the potential solution side of things, Alternet offers a solution of debt relief for national service, and looks at other reasons and solutions. The Commission on the Future of Higher Education recently dropped language from a report which would have recommended tha families look to private loans for money for students.

National Student Loan Debt Clock: $434 billion.

Posted by Diana at 1:18 PM | Permalink

Ah, the late-summer days of August. Time for barbeques, going to the beach, getting in last-minute time off, and, of course, a slew of articles about student loan debt just in time for back-to-school.

-The Boca Raton News reports on student loan debt being a "major worry of recent grads.".

-Alternet has an article on "The Real Tragedy of Student Debt", looking at one woman's personal story, one that discusses the arguments of many that students without money for college should not go to prestigious schools or should not go at all: "To be fair, I made the choices that put me in this situation. I attended an expensive university 3,000 miles from home. I stayed at that school, even though I could get a cheaper education elsewhere. I studied an impractical subject that I loved, then continued my studies at an obscure foreign university. I wasn't always aware of financial consequences.

Yet I made my choices based on the values I had been taught -- that helping others is more important than making money for yourself, meaningful career is more important than net worth, and brains, determination, and charisma are the key ingredients of success. I realize now that I subscribed to the fantasy of an equal society, when in fact everyone's options arise from class, race, gender, and a thousand other subtle differences in our experiences, assumptions, and privileges."

-The Indianapolis Star asks if high school grads are being priced out of the college market.

Student Loan Debt Clock: has topped $430 billion.

Posted by Diana at 5:40 PM | Permalink

-More on the long-term consequences of student loan debt from the Herald of Bradenton, Florida and The Daily Aztec.

-This Cavalier Daily column calls student loans a racket and a scam.

-A Bloomberg opinion column on how college costs damage the futures of Americans, and it offers some solutions, as well.

-Campus Progress asks: What is the purpose of higher education in American society? "If part of the answer is to create opportunity and ensure that America remains a nation where anyone can build a better life for themselves, then we need public policy reflective of this goal."

Student Loan Debt Clock: over $427 billion and counting...

Posted by Diana at 5:32 PM | Permalink

A few things to think about in the realm of higher education and student loan news as you enjoy your summer:

-High student loan debt is steering doctors away from general medicine and towards more lucrative specialized practices.

-Another Michelle Singletary column referencing the ban on refinancing previously consolidated loans: " 'My daughter has some student loans as a result of going to law school,' one father wrote. 'She has told me that she cannot consolidate her loans at this time as she has already done this once. This sounds unusual as people refinance a number of loans more than once. Is it true that students are only allowed to consolidate one time?'

Sorry dad, your daughter is right.

If you've already consolidated your loans, you can't do it again unless you have a new federal student loan or a loan that was not included in the original consolidation. And don't write me about it. Write to Congress to complain about this ridiculous rule."

-The U.S. Department of Education has "declined to implement a recommendation by student groups and lenders to simplify its regulations on student loans and make them more fair."

-More on the high cost of higher education, and the consequences of student loan debt from San Francisco's Beyond Chron: "These debt-burdened graduates are forced to forgo internships, fellowships, alternative career opportunities and the general adventures of young adulthood because of ever-increasing debt and rising interest rates.
***
The bottom line, however, is that an alarming number of students cannot afford higher education—and are therefore either not going to college, leaving the country or struggling well into their thirties just to pay off their diploma, before they can even start their career. As ... [college] officials ... consider raising tuition prices for the betterment of their particular schools, they would do well to realize that the real issue in American higher education is not the renovation of buildings or throwing up a new recreation center. Rather, the real concern is that the high cost of higher education is on the verge of making a diploma in this so-called nation of dreams a nightmare to achieve—yet another blow to the hammer driving a wedge between America’s haves and have-nots."

-From progressive website Toward Freedom, a discussion regarding class privilege in higher education: "In the United States, access to a college education is still a privilege not available to everyone. As the tuition rates continue to climb through the roof and competition for financial aid increases, more and more people are shut out of this system."

*Student Debt Clock is over $425 billion.

Posted by Diana at 4:03 PM | Permalink

This morning on Good Morning America, resident financial guru Mellody Hobson did a spot on student loan consolidation. While the linked article on the GMA website mentions the one-time cosolidation rule in passing, Ms. Hobson mentioned it a bit more in her spot this morning, stating that it was a drawback that wasn't really a drawback, since it's so unlikely that rates will go down once a borrower consolidates. As we know, however, thousands of borrowers beg to differ.

More articles have come out regarding the effects of student loans on the lives of borrowers long after graduation, including one from The Arizona Republic, one in The Columbus Dispatch, one in the Times-Tribune of Scranton, PA, and one in USA Today.

There's some good news for first-time consolidators, however, in the form of the repeal of the single holder rule. This allows borrowers to shop around for the best deal on consolidation, instead of requiring them to consolidate with their original lender. A step in the right direction, to be sure.

In other legislative news, Senator Clinton has introduced S. 3255, The Student Loan Bill of Rights Act of 2006, which is another step in the right direction, but still seemingly doesn't address the issue of allowing refinancing of previously consolidated loans. One lender has decided to take matters into its own hands on this issue, and has filed a lawsuit in the U.S. District Court for the Southern District of New York against the Department of Education and Secretary Margaret Spellings: "The lawsuit requests a temporary injunction against a ruling that eliminated some consolidation options on March 31, three months before the July 1 deadline. The suit also challenges the constitutionally of the Higher Education Act, the congressional bill that brought about these changes, because the House and the Senate did not pass identical forms of the bill."

*National Student Debt Clock is up to over $422 billion.

Posted by Diana at 11:16 AM | Permalink

As graduation time approaches (or, er, is already here), articles about student loans are popping up all over. Aside from the usual advice-laden paragraphs advising college grads to consolidate now so they can lock in interest rates before July 1, and advising high school grads to be careful about borrowing for college, there are a couple of more interesting things out there to read:

-This article in the Northeast Mississippi Daily Journal, in addition to advising college-bound folks to avoid borrowing, also shines a little light on the for-profit monster that is Sallie Mae ("now a private corporation whose profits put Exxon to shame"): "The loans have been helpful to millions. They've also become a nightmare to tens of thousands. ... It's not unheard of for a student who has borrowed $25,000 to be facing double that much in arrearages - even after making sporadic payments for four or five years."

-The Christian Science Monitor reports on the "albatross" of student loans: "With hefty repayments in their future, however, many students...are walking away from low-paying government, nonprofit, and teaching jobs. ... Accumulating loan debt even pushes back many of life's milestones, according to a survey that Baum conducted in 2002 for Nellie Mae, a major student lender, which is now a subsidiary of Sallie Mae. The report found that 38 percent of graduates held off buying their first house because of student loans, 14 percent put off marriage, and 21 percent delayed having children.

'We are the first society in history to take our brightest and start them out in debt,' says Allan Carlson, president of the socially conservative Howard Center in Rockford, Ill. 'That's just stupid public policy. We should encourage them to grow, not hold them back.'"

-The Mercury News reports on a recent survey which shows that "[a]lmost seven out of ten respondents are paying off student loans or have spouses who are, and the average outstanding balance is greater than $29,000. Almost 40 percent of graduates with college debt expect to take more than 10 years to pay off their loans."

-Maybe some folks in Washington are paying attention, though, as is evidenced by this Letter to students from Senator Edward M. Kennedy: "Current law, for example, does not allow borrowers to "reconsolidate" - i.e., refinance - a consolidated student loan, but it should. Borrowers who consolidated their loans at higher interest rates in the past deserve to be able to refinance their loans again when interest rates go down, just as homeowners take advantage of lower rates by refinancing their mortgages. I'm also working to reduce interest rates for all student loan borrowers. Lenders are making record profits under the government's college loan program, and restricting student loan benefits is an unfair way to reduce the federal budget deficit."

*National Student Loan Debt Clock is at almost $420 billion and counting...

Posted by Diana at 3:06 PM | Permalink | Comments (1)

A Greensboro News-Record opinion column laments the state of student lending in the U.S., referencing a report from 60 Minutes which asks whether Sallie Mae's success comes at too steep a cost to students and taxpayers. The report noted that most of the loans from Sallie Mae are government guaranteed, and also reported that Sallie Mae owns some of the largest collection companies in the country. "Once a student borrower goes into default, the government pays Sallie Mae all the principle and compounded interest that have accrued. The loan then passes into the collection phase. If Sallie Mae is the collector, it gets to keep up to 25 percent of whatever is recovered. In 2005, nearly a fifth of its revenue came from its collection business."

As Harvard bankruptcy law professor Elizabeth Warren states, "We have to decide collectively as a country: do we want to encourage the young people who are trying to get college diplomas? And if the answer to that is yes, the way to encourage them is not to double and triple the amount that they owe when they get into financial troubles. ... It's a market in which the protection goes to the lender, [a]nd the students get served up like turkeys at the Thanksgiving dinner."

Such staggering debt prevents some people from working in Federal jobs, as well.

Education Finance Partners, a private loan company, is offering private consolidation loans. I'm not sure how they work, or what the criteria are, but such loans might work for some people.

And one last little note: Student Debt Alert's student debt clock shows the national student loan debt is up to well over $417 billion (up $2 billion since the last time I updated on May 2, 14 days ago).

Posted by Diana at 4:12 PM | Permalink | Comments (1)

More articles on the long-term effects of student loan debt, from the State Hornet and CNN Money, which has coined an interesting phrase to describe the problem: "Call it a reverse dowry: college debt diverts careers and delays or impedes graduates' plans to get married, buy a home or even to start a family. The effects can last years."

Central Michigan Life reports on a new online forum on college affordability hosted by the Democrats on the House Committee on Education and the Workforce. Head on over there and make your voice heard.

On a slightly positive note, EMaxHealth reports that student loan debt does not go on one's credit report.

And finally, for a look at the larger picture of student loan debt in this country, check out Student Debt Alert, which has a national student loan debt clock that was showing a national student loan debt of well over $415 billion at the time of this writing, and is rising steadily.

Posted by Diana at 11:02 AM | Permalink

Possible good news for physical therapists: a bill has been introduced "to make physical therapists who are practicing in areas where there are shortages of health professionals eligible for student loan repayment assistance under the National Health Service Corps Loan Repayment Program."

Also, for those in school now, the College Access and Opportunity Act was passed recently, which purports to eliminate the single holder rule (allowing students to shop around for the best interest rate when they consolidate) and increase Pell grants.

On the flip side, check out this opinion column by Congressman Marty Meehan, lamenting the fact that many who want to attend college are financially unable to do so, or rack up crippling debt by attending.

And finally, this Fort Wayne article notes something I've personally witnessed in my profession, namely that "[c]ollege debt is pricing increasing numbers of graduates out of teaching, social work and other modestly paying public-service careers." I think a lot of people want to have service careers, but can't afford to with the student loan burden they carry.

Posted by Diana at 11:54 AM | Permalink

Happy Spring, all! (For those of you in places where Spring has arrived, that is, unlike where I am.) It's April, so that means tax time (time again to cringe at the amount of student loan interest you paid in the past year, and if you're like me, time again to be annoyed that Congress deems your salary to be "too high" to be able to deduct that interest). It's also time to pass on the links I've built up recently, so away we go...

-More stories on the long term consequences of student debt from CBS, the Lansing State Journal and the Mercury News. Some parents are willing to give up quite a bit so their children can avoid taking out student loans.

-An editorial asks why isn't the GOP favoring free market competition in the student loan arena? A letter to the editor asks the same question.

-And finally, more on Sallie Mae's political clout, and in particular, Sallie Mae Chairman Al Lord's connections.

Posted by Diana at 10:28 AM | Permalink

The Chicago Tribune recently ran a story on lifetime debt as a result of student loans: "The impact of big debt from education loans manifests itself in ways that cannot be easily measured. Career plans are altered. Lifestyles are restricted or changed. Home purchases are put on hold. Family plans are often delayed to allow for debt payments." Predictably, at least one letter to the editor regarding this article sings the "it's the students' own fault" refrain, highlighting a lack of understanding of the problem. I don't think most students and graduates are saying we are entitled to a free education, or we want taxpayers to foot the bill. I think most of us are saying that we just wish dealing with student loans was a bit easier in terms of interest and repayment, that we should be able to refinance to get better interest rates, and that lenders shouldn't be making profits and living in luxury off of our backs.

There are also more articles out on Anya Kamenetz's book from The Kentucky Kernel and the Diamondback Online.

Finally, the nonprofit Project on Student Debt is studying student loans and their implications on families, the economy and society. Check it out.

Posted by Diana at 10:14 AM | Permalink

First and foremost, let's get this out of the way: If you're here looking for a site about either recently published book titled Generation Debt, this isn't it, though we have posted about those books. Try here for Anya Kamenetz's book, or here for Carmen Wong Ulrich's book.

Onto the news...

-The American Chronicle examines the Single Holder Rule, reconsolidation, and recent changes to student loan laws.

-Sign On San Diego also looks into recent education law changes, and how those changes benefit lenders, not students or graduates.

-The Chicago Sun Times gives Congress an "F" for the recent changes to student loan laws, asking the eternal question, "If you can refinance your mortgage to take advantage of lower rates, why not your student loan?"

-The Free Market News also covers these student loan changes, asking the above question another way, "Can you imagine the uproar if homeowners were suddenly told that they could no longer refinance their home loans?"

-And finally, USA Today examines the consequences of such a large debt burden: "The weight of debt is forcing many to put off saving for retirement, getting married, buying homes and putting aside money for their own children's educations," as well as keeping them from starting businesses and securing any other type of loan.

Posted by Diana at 12:17 PM | Permalink

Here are a few links I've come across in recent days that may be of interest:

• A Gothamist interview with Anya Kamenetz, author of Generation Debt: Why Now Is A Terrible Time To Be Young.

• A National Law Journal article on law school debt.

• And finally, in light of Representative John A. Boehner's recent election as House Majority Leader (we're most familiar with Rep. Boehner as Chairman of the House Education and the Workforce Committee, in which many of the bills we back have languished), the Chronicle of Higher Education examines his ties to student loan providers. Certainly his ties to Sallie Mae and other lobbyists are well documented, one only has to look here, here, and here for evidence.

Posted by Diana at 10:43 AM | Permalink | Comments (1)

Nancy Fay of the Temecula Valley News asks, Are student loans a ticket to debtor's prison? Visions of a Dickens-era fate aside, it does seem more and more like this country punishes students for borrowing money to go to college and have a better life.

"Check the Web: More and more students are getting angrier and angrier about their student loans.

They don’t mind paying them back. They just don’t like it when people change the rules in the middle of the game.

'Congress enacted new rules that continue the so-called "Single Holder Rule," which says that once you take your student loans out from one lender, you cannot change that lender,' said Alan Collinge, founder of Student Loan Justice. 'And if you want to refinance to take advantage of historically low interest rates, you can only do that once, if at all. And you can no longer do it while in school. Imagine the outcry if America’s largest mortgage lenders tried to stifle competition by restricting the way we refinance our home loans.'

Yet America’s largest student loan banker did exactly that, and justified it by saying that competition for student loans would hurt its student loan portfolio."

"During a question-and-answer session with students at Kansas State University, sophomore Tiffany Cooper asked, 'Recently, $12.7 billion was cut from education, and I was just wondering, you know, how is that supposed to help our futures?'

'The education budget was cut?' Bush responded. 'Say it again. What was cut? At the federal level?'

She repeated the question and clarified that she was referring to student loans.

'Actually,' Bush finally said, 'I think what we did was reform the student-loan program.

'We're not cutting money out of it. In other words, people aren't going to be cut off the program. We're just making sure it works better.'

Becky Timmons, director of government relations for the American Council on Education, said the president had it half-right. 'When you take [$12.7 billion] out of the program, you can both hit the lenders and make students and parents pay a lot more when they repay their loans,' she said."

Posted by Diana at 10:05 AM | Permalink | Comments (2)

A few books (some I've mentioned in the past) have been released on the topic of debt among younger Americans these days:

1. Generation Debt: Why Now Is A Terrible Time To Be Young by Anya Kamenetz, contributor to the Village Voice. Here's the book site: GenDebt the book.

2. Gener@tion Debt:Take Control of Your Money--A How-to Guide by Carmen Wong Ulrich, former Money magazine editor. Here's the book site: GenDebt. (We're namechecked on page 18.)

3. Strapped: Why America's 20- and 30-Somethings Can't Get Ahead by Tamara Drout of Demos.

I haven't had a chance to check them out yet, but I plan to do so soon.

*-James Bryce

Posted by Diana at 10:23 AM | Permalink

• TPM Cafe has an article opining that "federal student loans do more to subsidize banks than help students."

• Rep. John Boehner, Chairman of the House Education and the Workforce Committee, is one of the candidates for House Majority Leader.

• An article from The Christian Science Monitor, via ABC News, on young adults trapped by debt.

• And finally, the GAO reports that consolidating student loans exclusively through the Department of Education’s direct-loan program could save the federal government billions.

So far none of our bills have been reintroduced under new bill numbers for 2006, but I'm keeping an eye on Thomas billfinder so I can check them out as soon as possible.

Posted by Diana at 4:03 PM | Permalink | Comments (3)

Writer Daniel Auld brought this story to our attention in a comment:

Ohio Congressman Boehner's "Tricks" Are Not For Kids
By Daniel Auld

When Ohio Congressman John Boehner recently told a gathering of student loan bankers that he had some "tricks up my sleeve to protect you," he wasn't talking about new tricks.

He was talking about the oldest trick in the book: "Protecting" business people from competition and innovation. Stopping consumers from getting lower rates and better terms for their student loans.

These tricks are not for kids.

The student loan business is now one of the most profitable in America, says Fortune Magazine. And it did not get that way because student loan bankers are smarter, better or less expensive than bankers in other industries.

It is more profitable because they have more protection from competition. And now Boehner, head of the House Committee that oversees student loan legislation, is promising them even more protection from the one force that drives down prices, improves service, and stimulates innovation: Competition, of course. Which in the student loan business in almost non-existent.

Thank you, Congressman Boehner.

That is the way it was until earlier this year, when in January, the Department of Education ruled that borrowers looking to reconsolidate their student loans could sidestep the longstanding anti-competitive rule against doing so.

It was cumbersome, but effective. Borrowers had to use a two-step process of reconsolidating into the federal governement's Direct Loan Program, then reconsolidating again with a private lender offering better rates. Before then, borrowers were locked in to their current lender no matter what other lenders offered them a better deal.

In May, the Department of Education set aside another longstanding anti-consumer policy by ruling that borrowers who are still in school could convert their variable rate student loans into fixed-rate consolidaton loans before rates increased in July. That way they could take advantage of historically low interest rates, much as millions of other borrowers do with their home loans.

While borrowers celebrated, consumer bankers plotted.

Enter Boehner. Buried deep in legislation to raise prices on student loans are provisions that will largely outlaw the reforms that introduced so much competition into student loans earlier this year.

If passed, student loans would once again be the only thing sold in America that cannot be freely refinanced.

Columnist Dick Morris calls the anti-refinancing scheme an "obnoxious .. ripoff." Terry Savage, the financial columnist of TheStreet.com, says there is "no way" borrowers should support this plan." The New York Times calls it "Robbing Joe College to Pay Sallie Mae," the country's largest student loan provider. The Times Union of New York, calls plans to outlaw refinancing a "student loan shame.'

Boehner's tricks are not for kids.

Posted by Liz at 12:21 PM | Permalink | Comments (2) | TrackBacks (1)

So much to cover, and so little time lately! Let's dive right in:

• The GSU Signal writes about student loan issues, and the article, in addition to mentioning the obvious idea that the "kind of anti-competitive practice" allowed in the student loan industry "would not be allowed in most business situations," also references the Wire article in which my own situation is mentioned.

• More than one book (and I've not yet read any of them) is out or coming out soon about the debt burden of post-college age Americans, including Strapped:Why America's 20- and 30-Somethings Can't Get Ahead by Tamara Draut, and Generation Debt: Why Now is a Terrible Time to be Young by Anya Kamenetz (Anya, an oft-linked Village Voice columnist here on GenerationDebt, also has a blog, and is the author of Robbing Joe College to Pay Sallie Mae, a recent New York Times Op-Ed column.)

• Former Clinton adviser Dick Morris weighs in on the student loan issue at the New Albany Tribune and Jeffersonville Evening News, stating, "Many students are locked into rates that approach 9 or 10 percent, reminders of the grim economic days of the early 1980s, and find themselves with no flexibility. Frequently, students use their once-only refinancing option shortly after graduation and find themselves helpless as the market interest rates drop ever lower. ... Student loans are the shackles that most young people take into the rest of their lives after leaving school. Keeping this debt hangover large and rendering it inflexible is about as anti- family a policy as you can get, forcing young people to postpone starting families because of the load of debt with which they begin life burdened."

• Many articles have come out recently analyzing the Congressional drive to cut student loans, in light of the large debt burden that many graduates carry for years after they are out of college, including articles at Alternet, the South Florida Sun-Sentinal, and Bloomberg.

• And finally, the recent Lockhart decision of the United States Supreme Court, ruling that the federal government can seize part of a person's monthly Social Security check to pay off outstanding student loans, has been the subject of student loan buzz, even prompting a little satire over at TPM Cafe.

That's all, folks, at least for the moment. We're still working out some site glitches, and I'll be back in legislation analysis mode come January, when I imagine many of the bills concerning issues of student loan consolidation will be reintroduced in the 110th Congress.

Have a wonderful holiday season, all.

Posted by Diana at 11:18 AM | Permalink

BusinessWeek covers debt issues, especially student loan debt issues, for those 30 years old and over:

"The cost of higher education, however, has increased so dramatically in the past decade and a half -- up by 63% at public schools and 47% at private -- that more students have to borrow tens of thousands of dollars to attend, ensuring that many of them are paying off those loans well into their 40s. The median debt-to-income ratio now is about 8%. But fully one-quarter of graduates are paying more than 12% of their income, a level many financial experts regard as worryingly high. That burden will only grow: Interest rates on student loans are going up for the first time in five years.

***

These trends have intersected before -- paying off college loans has never been easy, and earlier generations have had to contend with weak job markets -- but they are felt more keenly today. Almost two-thirds of students have to borrow money to get through school; as many as one-quarter may be accumulating credit-card debt to help pay for tuition. The median debt for college graduates in 2004 was $15,162, an increase of 66.5% since 1993. That may not seem like a crippling sum, but plenty of individuals owe much more. Back in 1993, only 4.2% of graduates had loans exceeding $25,000. A decade later, 17% did."

My comments to the article (should they be approved):

"Certainly we all should have been better about being more frugal while we were in college and/or grad school, but I wonder how many of the "it's your own fault" types of commenters have made mistakes or decisions based upon immature judgment in their past? Were we all supposed to be perfect adults, able to make informed decisions on any issue at age 18? At 22? The fact is, the student loan industry, aided by the current state of higher education law, sets many borrowers up for a life that indentures them to their debt. High interest rates on government-guaranteed loans (loans that can't be discharged in bankruptcy) insure that lenders make huge profit off the backs of student borrowers. The one-time consolidation rule alone is a boon to lenders and a bane to borrowers.

There are a few small, simple fixes that can be put in place to help ease the burden of debt for those who went to college to make a better life for themselves, only to find that they are now stuck with exorbitant interest payments to student loan companies. H.R. 1029, the Student Loan Fairness Act of 2005, was introduced in the House to permit refinancing of Federal student consolidation loans, and to permit students freedom to select a student loan consolidator. H.R. 1033, the Student Loan Interest Full Deductibility Act, was introduced in the House to amend the Internal Revenue Code of 1986 to repeal the limitations on the maximum amount of the deduction of interest on education loans. These small changes will ease the debt burden of thousands of citizens, yet the bills are stuck in committee, with no action in sight."

Posted by Diana at 10:27 AM | Permalink | Comments (1)

This article in the North County Times raises what should be common sense questions about the student loan industry, and you might just recognize one story mentioned:

"The key player here is the Student Loan Marketing Corp., commonly known as Sallie Mae, which is a government-sponsored enterprise created by the federal government, but owned by public investors. As a government-sponsored enterprise, if too many students defaulted on their loans, Uncle Sugar would come to the rescue. Sallie Mae was put together to help students obtain loans to attend college.

Today, Sallie Mae is growing in size, while attempting to raise costs of student loans and eliminate competition. Imagine the human outcry if the country's largest mortgage lenders tried to set up a monopoly that sought such unworthy goals.

***

The Wire magazine in New Hampshire recently reported how an attorney with more than $100,000 in debt learned that she was saddled with an 8.25 percent interest rate on that total because she had consolidated her loans earlier in her college career, and that under current education loan policies, she could only consolidate once. Today's loans carry 4.75 percent interest, but she's locked into the higher rate of interest."

Posted by Diana at 10:58 AM | Permalink | Comments (4)

USA Today notes a provision of bankruptcy law that will change on October 17 that's of interest to those of us with student loans:

"Even if you meet the means test, it will be harder to get rid of some types of debts after Oct. 17.

The change is particularly significant for borrowers with a lot of student loans.

Under current law, it's extremely difficult to wipe out student loans from the government or a non-profit organization, even under Chapter 7 bankruptcy. The new law expands that provision to include student loans from private lenders, says Henry Sommer, editor-in-chief of Collier on Bankruptcy."

Private lenders get more legislation to their liking, and borrowers struggling with debt get fewer options to relieve that burden. Way to go, Congress.

More on student loans and bankruptcy via The San Francisco Chronicle.

Posted by Diana at 10:07 AM | Permalink | Comments (3)

A report by the Educational Policy Institute compares student loan repayment conditions and debt management programs in eight countries: Austrialia, Canada, Germany, Holland, New Zealand, Sweden, the United Kingdom and the United States. The author of the report, Alex Usher, states in a press release:

"The key weakness of the American system is lack of protection for borrowers with low incomes...These borrowers pay far more in the US than they do anywhere else in the world, and it is largely because interest rates are too high and the income threshold for loan deferment is far too low. A rise in the threshold for eligibility for deferment would significantly improve Americaís student loan system." (Emphasis added.)

So would lowering interest rates, and allowing borrowers who've already consolidated to refinance their loans at those lower interest rates.

Posted by Diana at 9:50 AM | Permalink | Comments (1)

"Almost two thirds of Americans with outstanding student loans (64%) say these student loans prevent them from making other major purchases, such as a house, car or other large ticket items, according to the Cambridge Consumer Credit Index."

The Center for Economic and Policy Research reports that "High levels of student debt are the result of rapidly increasing college costs and policy choices that have made more loans -- and not grant aid -- available to students. ... Higher levels of student debt have implications for how students think about career and life-choices. Highly indebted college graduates may choose to postpone marriage, buy a house, or start a family in order to pay off their loans."

And that, of course, is the crux of our problem. Having student loans hanging over our heads makes us put our lives on hold. Allowing borrowers to refinance consolidation loans at lower interest rates would be a small way to help ease that burden.

Posted by Diana at 11:00 AM | Permalink | Comments (1)

The Wire (a weekly New Hampshire paper) writes about the post-college pinch of debt, and you just might recognize one person who's quoted. ;)
__________

Resources include Web sites like GenerationDebt.org, which co-creator Diana Lamphiere describes as an "information clearinghouse" for young adults struggling with debt problems. Lamphiere and friends Gerry Garcia and Liz Schwarz started the site in 2004 as a way to keep students updated on loan consolidation and refinancing regulations.

Lamphiere, an attorney, had over $100,000 in debt when she graduated from law school in 2001. When the time came to consolidate her loans and lock in a fixed interest rate, she did so, figuring that she could always refinance again when interest rates dropped. However, she didnít realize that education loans could only be consolidated once, and she has since been stuck with an 8.25 percent rate; the current rate for those currently consolidating their loans is 5.3 percent.

"I think all of us realize that we borrow this money and we have a responsibility to pay it back," she says. "But when the fact that your payment is going toward interest and the going interest rate is much lower than the interest that youíre paying, that seems fundamentally unfair."

GenerationDebt.org tracks current legislation relating to student loans and federal aid, and also provides tips on how to manage loan payments. The site also has a message board where new and current students can talk about their financial difficulties.

"Most of the time, the reaction is 'I thought I was the only one who had this problem,'" Lamphiere says of the posting. She also receives feedback on the site from representatives from student loan lenders who write in to say that not all loan companies are bad.

"We don't try to attack," she says, but sometimes it's difficult because "it seems like huge companies like Sallie Mae are making money off students' backs."

The debt burden has wide-reaching effects, according to Lamphiere, influencing everything from career choice to future financial opportunities.

"Most people I know Ö are in the same boat," she says. "They'd rather take public interest jobs Ö (but) you have to make X amount a month to make that loan payment every month. You're in grad school and you're idealistic and when you get out, you have this huge debt and you say, 'That corporate job is what I have to do, at least for a while.' And you kind of get sucked in."

For those who pursue advanced degrees, that debt burden can extend well beyond their student years.
"People have written me, saying 'We've always wanted to buy a house but we can't,'" Lamphiere says. "People who are paying off their own loans who have their own kids, they're worried about setting up a college fund. It hurts the future of students, not giving them flexibility about little things like interest rates."
__________

Well, I graduated law school in 2000, not 2001 (I consolidated my loans in 2001), and Liz spells her last name "Schwartz" not "Schwarz", but otherwise it's all good. :)

Posted by Diana at 1:49 PM | Permalink | Comments (6)

One columnist in the Cinncinnati Post advises students not to take out student loans at all, in response to this letter from a reader: "I consolidated at a high rate of interest with payments of $500 a month. I would need an income three times my highest-ever gross salary to afford to pay off my loan in 30 years. ... Now I have terminal cancer, but cannot have my consolidated loans discharged unless I give up the job that gives me the medical coverage to fight this disease. To qualify for Social Security and Medicare, I have to be on welfare for two years, which is past my life expectancy."

Posted by Diana at 5:18 PM | Permalink | Comments (3)

Anya Kamenetz at the Village Voice writes about H.R. 609, and mentions the following:

"Lenders and for-profit colleges contributed nearly four times as much to the leaders of the House education committee during this HEA reauthorization cycle as they did during the seventh reauthorization, in 1997-1998. As of 2003, Sallie Mae was both the largest student lender and the second most profitable company in the Fortune 500. They gave $185,000 to the members of the committee in 2003-2004, making the company the committee's single largest donor by far."

Note also that a recent 60 Minutes segment on career colleges mentioned this:

"Over the past two years, career colleges and lending institutions that benefit from government-backed student loans handed out more than a million dollars in campaign contributions to members of the House Education Committee. Half of that money went to the committee's two ranking members: Chairman John Boehner of Ohio and Buck McKeon of California."

Posted by Diana at 10:37 AM | Permalink | Comments (1)

This Inside Higher Ed article breaks down H.R. 609.

No mention of the defeat of Congressman Wu's amendment that would have allowed reconsolidation.

Of note, however: "With the House committee's work done for now, further action on the Higher Education Act is unlikely until after Congress's August recess, when the full House is expected to take up the legislation approved Friday and the Senate will draft its own version of the bill."

With the August recess coming up, representatives will be coming home to their districts, and it's a perfect time to stop by their offices to talk to them about our issues. Let's take advantage of it and let our representatives know our concerns, and also let them know how their response to our concerns affects our vote.

Posted by Diana at 9:54 AM | Permalink

Information promoted from comments to our last post:

Via Rob: "I checked with Congressman Wu's office and confirmed that the amendment accepted was related only to the single holder rule. I asked about what had happened with about the first part of congressman Wu's bill dealing with the eligible borrower rule and was told that that portion of his bill had not been allowed. I asked if a vote had been taken and was told that the eligible borrower portion of the bill had been voted down by a vote of 17-28. I had been hoping for a closer vote. The assistant said that the bill was not dead and was still out there."

Via Jillian Schoene, Congressman Wu's Communications Director: "H.R. 609 only includes the provision of Congressman Wu's Student Loan Fairness Act which repeals current law denying graduates with loans from a single lender the right to seek out the lowest cost consolidation loan (The Single Lender Rule). Congressman Wu did offer an amendment to allow reconsolidation for all borrowers during the full committee markup, but the committee voted down the amendment 17 to 28.

Sorry for the confusion."

I called Congressman Wu's office this morning, and received a call back this afternoon confirming the above.

Here is Friday's press release, with corrected language: "Just as families have saved money when refinancing their home mortgages, graduates will be able to consolidate their student loans with the lender of their choice, taking advantage of competitive interest rates and loan terms. H.R. 609 includes a core provision of Congressman Wu's Student Loan Fairness Act which repeals current law denying graduates with loans from a single lender the right to seek out the lowest cost consolidation loan."

So the amendment was, in fact, too good to be true. I apologize for getting everyone's hopes up (including my own). Let's keep contacting our representatives, though, and pushing for Congressman Wu's bill that would allow reconsolidation.

Posted by Diana at 1:31 PM | Permalink

Congressman David Wu (D-OR 1st) Successfully Amends H.R. 609.

"Congressman Wu succeeded in amending H.R. 609, the College Access and Opportunity Act of 2005, to include several of his higher education priorities. H.R. 609 amends and reauthorizes higher education programs receiving federal dollars. It was marked up today [July 14] in the Subcommittee on 21st Century Competitiveness.

***

The subcommittee adopted the core provision of H.R. 1029, Congressman Wu's Student Loan Fairness Act which repeals current law denying graduates with a loan from a single lender the right to seek out the lowest cost consolidation loan. Just as families have saved money by refinancing their home mortgages, graduates will be able to reconsolidate their student loans with the lender of their choice, taking advantage of historically low interest rates."

!!!

A webcast of today's continued markup session can be viewed.

Swing into action, folks! Write and call your Congressional Representatives and ask them to support H.R. 609 with Congressman Wu's amendment attached. This bill could go to the House floor as early as next week, so the time to act is now. Concentrate immediately on those representatives that are Committee Members, then contact all House members once the bill is out of Committee. Congressman Wu's H.R. 1029, the Student Loan Fairness Act, is the former H.R. 2711, the bill we've always supported. This is what we've been waiting for, so let's mobilize!

(Thanks to John Lysenko for the heads up on all of this activity on H.R. 609.)

Posted by Diana at 10:17 AM | Permalink | Comments (8)

In this video transcript from an ABC television affiliate, a mention is made of the fact that one can't refinance a consolidation loan (apologies for the caps, that's how it's typed on the website):

"CONSOLIDATING CAN SAVE YOU MONEY BUT ONCE YOU LOCK IN THE RATE, THAT'S IT.

Jevita de Freitas: so it's not like a mortgage most of the time depending on the lending institution where you can refinance every time the interest rates go down."

Note that today is the day the rates go up, so maybe now the media can focus on the problems of those who've already consolidated instead of just harping on those who haven't.

Happy Independence Day, all, and have a great holiday weekend from GenerationDebt!

Posted by Diana at 9:37 AM | Permalink

Via the Indianapolis Star:

"If you have a student loan, chances are you have earned a degree in confusion.

Many borrowers, who have already bundled their student loans into a single fixed-rate loan with one payment, are confused about letters they've been getting from lenders looking for business from them.

'These days I am bombarded with offers from financial institutions to refinance my loans,' wrote Myriam Contiguglia of Rochester, N.Y. 'What a fantastic opportunity. With a lower rate, I could start to think about buying a house.'

Contiguglia graduated in the early 1990s after six years of college. She couldn't afford the $700 student loan payment on a $19,000-a-year salary. So she consolidated her loans to reduce her monthly payment. Her interest rate at the time: 8.5 percent.

In recent years student loan rates have dropped to historically low levels, under 3 percent for many borrowers.

Contiguglia wanted to refinance her consolidated loan, but when she called the lenders who contacted her, she was turned down. And why?

Unlike home mortgages or even car loans, you can consolidate your federal loans only once, unless you have new loans that were not included in the original consolidation.

Contiguglia is stuck with that 8.5 percent rate."

I still get those letters just about every day. I just rip them up...

Posted by Diana at 10:08 AM | Permalink | Comments (2)

It isn't pretty:

"[T]his 26-year-old has an education -- and $180,547 in student loans to pay for it.

***

[he] graduated from the University of Illinois College of Medicine at Rockford this spring, an achievement that someday will earn him a low six-figure income as a doctor.

That's still a few years off. In the meantime, he'll be making $43,600 a year as a medical resident.

***

Unless he postpones his payments until after residency, he'll be expected to pay the loans off to the tune of $1,684 a month.

He's not unique."

No, he certainly isn't.

No mention of the one-consolidation rule in this article, though it does advise borrowers to consolidate.

*Site note: Still working out site glitches with links, names of bills, etc. We are working on it and hope to have everything smoothed out soon!

Posted by Diana at 10:22 AM | Permalink | Comments (1)

This morning Good Morning America did a quick spot on consolidating student loans, advising borrowers to consolidate by June 30 before interest rates go up. You may have noticed that the media has been reporting like mad on the July 1 interest rate hike, without mentioning the problems of people like us who are stuck with high interest rates with no option to refinance.

The spot mentioned the one-time consolidation rule:

"You can only consolidate once. It is not like refinancing a mortgage where you can keep locking in lower rates."

But as usual, there was no elaboration on that point.

Posted by Diana at 10:42 AM | Permalink

Unsurprisingly, Sallie Mae is lobbying Congress to ban consolidated fixed-rate loans, and require that all future student loans carry variable rates. Sallie Mae's rivals say that banning fixed-rate loans would hurt them.

It's interesting to note the lobbying money spent by Sallie Mae: $1.1 million in 2003, as well as "donations to lawmakers through a political action committee that ranked 25th among 1,368 corporate PACs in 2004."

This article does not mention the issue of refinancing consolidation loans, but we already know Sallie Mae is against that.

*Site note: We realize the bill numbers on the right of the main screen are the old ones from 2003. The content of the entries is updated, but we've been having some glitches with the site as far as getting the categories changed. Please be patient with us (we do all this in our spare time, remember), and email us with any questions.

Posted by Diana at 10:11 AM | Permalink | Comments (4)

This Chicago Tribune story (subscription) speaks in general terms about the amount of debt facing young adults these days, including student loan debt.

"America's youngest adults are joining the work force at salaries their parents never dreamed of, but their obligations are even bigger, several research efforts suggest.

In a briefing paper titled 'Generation Broke: The Growth of Debt Among Young Americans,' New York policy group Demos said adults younger than 25 who have debt spend 30 percent of their income making the payments, double the percentage for this age group in 1992.

In a sample budget for a recent college graduate earning a $36,000 starting salary, the group found average basic expenses for loan debt, taxes, rent, food and transportation eats up all but $34 a month. That has to cover child care, entertainment, clothing, furniture, Internet access and other items, the group said."

This article touches on something I find so difficult to explain to people sometimes: the fact that my salary may look pretty decent, but the debt payments I make (mainly the student loan debt, in my particular case) eat up so much of my paycheck that it's as if I'm making much less. The fact that most (if not all) of those payments are going to inflated interest and not my principal just pours salt and lemon into that particular wound.

Posted by Diana at 9:58 AM | Permalink | Comments (7)

Seacoast Online has a little story about student loan consolidation, with a small mention of the reconsolidation factor: "The drawbacks of consolidation? You only get one chance to consolidate student loans..."

This article also mentions the White House's 2006 Budget: "President Bush and his congressional allies propose ending fixed-rate consolidation loans.

The presidentís 2006 budget proposes raising the limit on the amount of federal loans that students can borrow. But to cover that $2.6 billion cost, the administration would end fixed-rate consolidation loans and replace them with variable-rate loans that fluctuate with market rates but could rise no higher than 8.25 percent."

That's not the provision that would allow for reconsolidation, which we've discussed here in the past, but the reconsolidation provision would allow for a variable rate as well. Opinions on switching from a fixed to variable rate?

Posted by Diana at 10:06 AM | Permalink | Comments (6)

An article about interest rates and consolidation in the Minneapolis Star Tribune that mentions our plight: "But unlike refinancing a mortgage, which you can do a gazillion times if you wish, you cannot refinance your consolidated student loans even once."

I suppose every small mention of this issue may help us, as more people read items like this one and realize the injustice of such a situation.

I'm hoping to get some legislative research done this week to update the status of all the bills we've mentioned here as well as searching for new ones that may have been introduced, so stay tuned...

Posted by Diana at 9:59 AM | Permalink | Comments (1)

Letters to Newsweek about Anna Marrian's article, one that criticizes her, and one that praises her:

"One Costly Education
While the inability to refinance her student loans to a lower rate is decidedly unfair, I still find it hard to sympathize with Anna Marrian's plight ("Struggling to Pay the Mortgage on My Mind," my turn, Feb. 7). She is in this predicament due to her own lack of responsibility. She could have cut down on her debt substantially by going to a cheaper university or even a community college, checking into scholarships and grants (many are merit based), and choosing a profession that pays more than $30,000 a year to start. Also, at 31, she was certainly old enough to understand that you never sign any document without reading it thoroughly–and that –includes that pesky fine print. I'm saving Marrian's column so I can show it to my daughter. In nine years she will be getting ready to go to college and the burden of funding it will fall upon her. Marrian's experience should serve as an excellent example of what not to do.
Judy Nichols
Wilmington, N.C.

Good for Anna Marrian for taking on America's deep dark secret: student loans. My husband and I worked hard so that our children wouldn't have to bear the burden of owing for their college educations. In law school my son took out about a third of the cost in loans. Foolishly, since they were government guaranteed, I thought they would be low interest and manageable. Not so: he came out owing more than $50,000 with an astronomical interest rate. Many of my children's friends are burdened with undergrad and graduate loans that put them well into the $100,000- debt range. The government should not make an exorbitant profit on the backs of the future of this country.
Lyla Fox
Kalamazoo, Mich."

Posted by Diana at 10:09 AM | Permalink | Comments (7)

According to the American Association of Collegiate Registrars and Admissions Officers while overall reducing the money allocated to the Department of Education... the Bush White House has taken a swipe at many "ineffective programs" including student loan consolidation.

"Consolidation loans allow students to turn multiple loans from one or more lenders into a single consolidated student loan. In his budget proposal, President Bush advocates elimination of the single holder rule, the fixed interest rate and rules banning reconsolidation. The budget request would replace the current fixed-rate interest formula for Consolidation Loans with the variable rate formula used for students loans and would allow borrowers to reconsolidate previous consolidations. A 1 percent origination fee would be imposed on borrowers that reconsolidate and the current one-time lender fee on all new Consolidation Loans would be increased from 0.5 percent to 1 percent."

Posted by Liz at 4:48 PM | Permalink | Comments (2)

Here we are: here's our story, as told by the author, Anna Marrian (a fellow sufferer), in this week's Newsweek.

So here's our chance, everybody. Write letters, send emails, DELUGE Newsweek with your stories. Make the response so huge they have to do follow up stories. Tell them about the bills pending in Congress to fix the issue. Make this an issue people are talking about. Here's where to write:

Newsweek Domestic Edition

Letters to the Editor for the U.S. print edition:
Letters@newsweek.com

Mailing Address:
Newsweek
251 W. 57th St.
New York, NY 10019

Posted by Diana at 10:13 AM | Permalink | Comments (3) | TrackBacks (0)

Here's a big shocker: Student loans drive Sallie Mae business higher. "Sallie Mae, which in December severed its last ties as a government-sponsored enterprise, says student loan originations rose 18 percent last year. Fourth-quarter profits more than doubled."

And another big shocker: Increasing college costs leave many with legacy of loans. "[One college grad] sometimes has trouble sleeping and often worries about how she will pay back her student loans."

While your elected officials are celebrating in D.C. today, write them letters and plan to call their offices to ask why it's OK for a college grad to struggle for years to payoff student loans while lenders rake in the cash from your interest payments. Then point them toward H.R. 2711.

Posted by Diana at 9:48 AM | Permalink | Comments (1) | TrackBacks (0)

From Fox News:

"Other sources at the [House Education and the Workforce] committee say NCLB [No Child Left Behind] will likely take a back seat in 2005 to the Higher Education Act reauthorization – something both Democrats and Republicans have been working on throughout 2004.

'It's a very complicated bill with many avenues,' David Schnittger, spokesman for Committee Chairman John Boehner, R-Ohio, said about the Higher Education Act. 'This January, it will be one of the top things on our agenda.'

After a year of disagreements regarding several aspects of higher-education spending, the House committee was unable to pass a reauthorization bill last year. The Senate Health, Education, Labor and Pensions Committee held hearings but also did not produce any legislation. Schnittger said Democratic opposition to how they were going to pay for financial aid increases was largely to blame. Little progress has been made on that front, he added."

It's time to gear up again. Give your representatives a call or write them a letter, and tell them that the ability to refinance loans that have already been consolidated should be a major part of the HEA reauthorization discussion. Point them to H.R. 2711 as a solution. Tell them your own stories, and ask them not to forget about yesterday's graduates while trying to help today's students. Contact your local media (and national media), and tell them your story, connect it to the broader impact of the HEA authorization.

The bottom line is this: We are becoming a nation of educated graduates who can't get out from under the yoke of crippling student loan debt, and that doesn't help us advance at home or in the world.

Posted by Diana at 10:37 AM | Permalink | Comments (2)

From an editorial in the Pittsburgh Post-Gazette:

"It didn't take long for the Pennsylvania Higher Education Assistance Agency to reject a $1 billion offer from rival SLM Corp., more commonly known as Sallie Mae. Reston, Va.-based Sallie Mae, which manages more than $98 billion in student loans, wants to take over most of PHEAA's operations.

***

'PHEAA is not now and never will be for sale, especially to a profit-driven corporation with a track record of overcharging borrowers, laying off workers and gobbling up any organization that stands between students and a quest for bigger profits,' says state Rep. Elinor Z. Taylor, the Chester Republican who serves as chairman of PHEAA's board."

!!!

Posted by Diana at 10:31 AM | Permalink

This editorial from The Fort-Wayne Journal Gazette is informative on a few issues. First, it notes that Congress has cut Pell Grants, and "about 85,000 of the 5.2 million students currently eligible to receive Pell grants will become ineligible with this latest congressional action. And 1.2 million others will get smaller awards under a new formula the government will use to determine how much families can afford to pay for college ñ a change that will take effect for students starting or returning to classes next summer or fall."

This editorial also answers some questions regarding the Higher Education Act reauthorization: "Signed into law in 1965 as a way of authorizing federal student-aid programs for colleges and universities, the Higher Education Act is subject to congressional reauthorization every five years, a process that reviews legislation affecting the ability of more than two-thirds of the nationís students to attend college. Now, after a two-year extension, the reauthorization of the Higher Education Act is again on the Congressional agenda, with the bulk of the discussion centering on institutional accountability, the challenge of keeping higher education affordable and access to the college of oneís choice."

So the HEA reauthorization is still ongoing.

Posted by Diana at 11:06 AM | Permalink

More from the Village Voice series on "Generation Debt", this time focusing more on the feelings young men get about being in debt way over their heads, and the feelings young women get.

From "I, Breadwinner?":

"Thus was a Matterhorn of debt created. But as I morphed from a twentysomething into a thirty-nothing, the realization began to dawn: Will the supersized student loans and maxed-out credit cards stay with me until the bitter end? Will I spend the rest of my life barely making rent, forever beholden to myriad creditors? Will I be able to purchase a home? Will I be solvent enough to provide, God help me, for a family? Will, in other words, there be consequences to an early life of profligate borrowing?

Well, yeah. 'As a group, young adults underestimate how long it will take to repay the debt,' said Jill Norvilitis, an associate professor of psychology at Buffalo State University, who has studied collegiate debt.

***

This wasn't what our parents had in mind for us. Many young men grew up hearing their fathers lecture on the importance of financial stability, business success, and home ownership. The thrust of these soliloquies was that if you make the right choices you won't have any problems. If I did it, so can you, son. But there was a caveat: Don't be stupid with your cash. (Also: You'll get none from me.) Implicit in all this was the suggestion that foolishness with money equals weakness. Debt was a moral deficiency. It's not the way a man conducts himself.

Easy for them to say, we thought. They didn't grow up in the age of easy credit. The credit card is just 40 years old, and it wasn't until the 1980s that a young person could get one without a signature from a parent. They didn't have to struggle to pay for an education. College is now hugely expensive–and a required step on the pathway of American citizenship. Avoid the university, we are told, and you'll wind up as a telemarketer. (You probably will anyway.) They didn't have to carry debt. We do. It's part of our life today.

***

'It's painful,' said Barry Glassman, a certified financial planner who counsels law students. 'If you don't make those monthly interest payments, you get a horrible credit rating and it goes on your permanent record. It's part of that anchor that is dragging you down. I see it with law students who I think would be great in the public sector. But they can't afford it. As a financial planner I can't see the numbers working. It forces people to take jobs they wouldn't normally take.

'It's tough to think long-term when there are so many pressing issues month to month,' he said."

"If you're a woman between the ages of, say, 18 and 30, then chances are good you were raised by a mother who aspired to be an '80s superwoman, a CEO-domestic goddess in shoulder pads–and so, minus the shoulder pads, do you. Creative satisfaction, along with money, romance, and gorgeous offspring, is part of our deluxe have-it-all package. And yet, in the years between college and settling down, we run smack into some harsh economic realities that can leave us sounding like women on the verge of a nervous breakdown.

***

A study conducted in 2002 by the Women's Institute for a Secure Retirement found that more than half the single young women in the United States are living paycheck to paycheck, compared to only 42 percent of single young men.

***

Young women today were raised with clear messages of achievement and self-reliance. They often outnumbered men at their colleges and graduate programs, and are making economic sacrifices for the fulfillment of their own dreams, without waiting for anyone else's permission. They have taken their equality for granted. Yet as they now struggle to establish themselves, they're realizing, for the first time, the betrayals of gender."

Posted by Diana at 9:52 AM | Permalink

This article in the Decatur Daily discusses the financial problems that graduates face after school's out, and also mentions reconsolidation:

"Companies flood young adults with mail about consolidating loans, extending repayment terms and locking in at a lower fixed interest rate to better manage debt. Consolidation can cut payments by half for recent graduates who do it within their 6-month grace period, but it doesn't help everyone.

Those who've already consolidated once can't consolidate again unless they go back to school and take out more loans, a federal stipulation companies don't advertise.

'What frequently isn't mentioned is that in order to expand the loan consolidation program to allow reconsolidation, the federal government would have to come up with billions of extra dollars,' said David Schnittger, communications director for the House of Representatives Education Committee.

'The money would have to come from other student aid programs such as Pell grants and Perkins loans, programs that exist to provide access to college for those in danger of not getting a degree.'

Legislators aren't going to give graduates struggling with loans subsidies at the expense of those who still need help going to college, Schnittger said, but they are in favor of switching to a variable interest rate instead of a fixed one on new consolidation loans, he said."

There you have it. The House Education Committee is basically saying that once we graduate, they don't really care about helping us anymore. Thanks a lot.

Posted by Diana at 10:10 AM | Permalink | Comments (1)

The Albuquerque Tribune reports that New Mexico District attorneys are planning to ask their legislature for salaries on par with other government attorneys, and to "ask legislators to approve a bill that would forgive part of the student loans of attorneys who become prosecutors."

Posted by Diana at 10:47 AM | Permalink

Just in time for Thanksgiving (ha ha), another article from the St. Petersburg Times on our drowning-in-debt generation.

"Fresh financial data show young adults are challenged as never before, certainly not since World War II, thanks to debt pressures today that did not exist a generation or two ago.

'This is as bad as it has been for young adults - absolutely,' says Tamara Draut, who works for the Demos USA think tank in New York and recently analyzed the financial plight of young Americans.

The impact goes beyond financial.

'The larger social implication is that we will have a whole generation of people for whom this country's social contract does not exist,' Draut says. The social contract means that if you work hard and play by the rules, you will get ahead.

That will not happen for this generation, warns Draut, if current trends continue.

***

Every politician and business leader bemoans the mediocre U.S. educational system and insists a better-educated population is key to keeping this country competitive in the future. Yet here we are, describing how college educations are getting so expensive that they undermine the financial stability of their own graduates.

***

By far the biggest concern is what happens to the young and in-debt if they enter middle age still struggling to pay off ancient loans. That could make the American Dream look more like the American Nightmare."

Posted by Diana at 11:08 AM | Permalink

The St. Paul Pioneer Press gives us another article lamenting the plight of the student who graduates college in the red from student loans, but fails to mention any of the bills pending before Congress to ease that burden after graduation (instead offering only advice to students and parents to think of the burdens before and during college).

Posted by Diana at 10:23 AM | Permalink | Comments (1)

Here's an interesting Village Voice piece on "trading bonds made up of thousands of loans like yours, profiting off your inability to pay for college."

Posted by Diana at 11:55 AM | Permalink

A non-profit public policy organization called Demos has released a report called Generation Broke: The Growth of Debt Among Young Americans, and you can read a press release about it as well.

The report details the pinch we're all feeling: "The economic security of younger Americans is eroding at an alarming pace as a result of slow wage growth, underemployment, rising costs and mounting student loan and credit card debt." It also notes specifically that rising student loan costs are partly to blame.

Posted by Diana at 12:08 PM | Permalink

Thought you guys might appreciate an update on the various bills we're interested in. Not exactly heartening.

From Thomas billfinder:

H.R. 2711 (our choice) = Latest Major Action: 7/28/2003 Referred to House subcommittee. Status: Referred to the Subcommittee on 21st Century Competitiveness.

H.R. 2504 = Latest Major Action: 7/21/2003 Referred to House subcommittee. Status: Referred to the Subcommittee on 21st Century Competitiveness.

H.R. 2505 = Latest Major Action: 7/21/2003 Referred to House subcommittee. Status: Referred to the Subcommittee on 21st Century Competitiveness.

H.R. 3180 = Latest Major Action: 10/20/2003 Referred to House subcommittee. Status: Referred to the Subcommittee on 21st Century Competitiveness.

H.R. 4283 (the one that doesn't even deal with our issue) = Latest Major Action: 7/13/2004 House committee/subcommittee actions. Status: Committee Hearings Held.

Posted by Diana at 2:59 PM | Permalink

Lawmakers head home while "[h]undreds of programs -- from highway building to welfare reform -- are being kept on life support through temporary measures because lawmakers failed to meet deadline after deadline for renewing them." And as we all know, H.R. 2711 languishes in committee.

Take this time while your representatives are home to call or visit them. As a constituent, you have every right to speak to and question your leaders, and they have a duty to speak to you about issues you find important.

Note also that the bill closing the loophole allowing student loan companies to collect subsidies from the government is being decried as inadequate. [Free registration required to view that story.]

Posted by Diana at 10:40 AM | Permalink

"The House ... unanimously passed a bill aimed at saving billions of dollars in future federal subsidies to commercial and nonprofit lenders of student loans." But does it do the job?

"Republicans pushed through the legislation to end a guaranteed return of 9.5 percent to lenders of student loans, which currently have interest rates of less than 3.4 percent. ... Democrats said they reluctantly supported the bill but wanted to go further by retroactively cutting the federally guaranteed 9.5 percent return for college loan lenders who recycled profits from current loans into new ones that capture more federal subsidies."

And what about H.R. 2711? That one still sitting in your committee, Congressman Boehner?

Posted by Diana at 2:46 PM | Permalink

From the Lexington Herald Leader:

"Congress is trying to end a practice that unintentionally has allowed banks to take in billions of dollars meant to help students pay for college.

Lenders are profiting from a promise the government made in 1980 to encourage college loans: a guaranteed return of 9.5 percent on those loans financed by tax-exempt bonds.

The government must pay lenders the interest that is not covered by students. With interest rates now below 3.4 percent, making up the difference has become a budget nightmare.

Republicans and Democrats have different ideas about how to end the big payments to lenders. Lawmakers on both sides hope to pass at least a temporary fix before Congress is done for the year.

Yesterday, the Republican chairmen of the House and Senate education committees offered legislation to erase the 9.5 percent guarantee and shift the savings to teachers.

Teachers who spend five years in poor schools and in the fields of math, science and special education would get as much as $17,500 in loan forgiveness, more than triple the current aid.

'This is obviously a much better use of these funds than simply lining the pockets of lenders,' said GOP Sen. Judd Gregg of New Hampshire, chairman of the Senate Health, Education, Labor and Pensions Committee.

The Republican plan would last for just one year. Sponsors say they would seek a permanent solution during the renewal of the higher education law next year.

The top Democrat on the House Education and the Workforce Committee, Rep. George Miller of California, said Dem-ocrats would support the bill if it were the only choice that Republican leaders offered before Congress adjourned.

Sen. Edward Kennedy of Massachusetts, the top Democrat on the Senate committee, said that if Republicans were serious, 'Congress will act immediately to end this rip-off once and for all.' "
__________________________________________

Note how quickly Congress got on top of this issue. How can we get them to take notice of OUR issue?

Posted by Diana at 10:39 AM | Permalink

This Washington Post opinion column (free registration required) outlines the latest student loan company swindle:

"Thanks to loopholes in the student loan system, financial institutions that lend to students will earn an unprecedented $1 billion over the next year. None of that money will go to students. All of it will go to the lenders, and all of it will come from you, the American taxpayer. It would be a scandal -- if, that is, anybody were upset about it."

The column also notes that "the student loan industry has contributed about $750,000 to the 49 Republican and Democratic members of the House education committee in the past 18 months."

Read more about the loophole issue in this Daily Nebraskan article, which deals specifically with the lender Nelnet. "By dusting off old student loans and repackaging them as new, the loan agency has collected more than $124 million in loose change from the pockets of taxpayers. Old loans become new when Nelnet augments a portfolio of old loans with new student loans ñ utilizing government loopholes that have some industry watchdogs questioning the companyís ethics."

Will any of these journalists notice that the student loan industry is fleecing those of us who consolidated at high interest rates as well?

Posted by Diana at 11:17 AM | Permalink | Comments (1) | TrackBacks (0)

I found an interesting commentary in the Christian Science Monitor regarding the money the student loan industry donates to Congressional Representatives.

"Federal Election Commission (FEC) records show that student loan and related industry officials contributed mightily (almost $1 million) to many of the 49 members serving on the House Committee on Education and the Workforce. ... Sallie Mae, no surprise, was the largest donor to those members, giving some $185,000 over the past 18 months.

***
Whose dollars will hold sway? Stay tuned. The bill [H.R. 4283] is stalled over partisan bickering. But when the money flow to politicians can be so clearly connected to the development of this education bill, the need for voters to better hold politicians accountable - and for politicians to avoid even the appearance of being bought off - is plain."

Posted by Diana at 11:23 AM | Permalink | Comments (6) | TrackBacks (6)

While this doesn't deal directly with the issue of refinancing consolidation loans, it seems important to note this article from PR Web that notes: "A petition by Congressman John Boucher (R-Ohio), seeks to eliminate consolidated fixed interest rates entirely. With the federal cap on student loans as high as 8.25%, Rep. Boucher's proposal could equate to higher monthly payments and thousands of dollars in unnecessarily paid interest for student borrowers."

The article also mentions Presidential candidate John Kerry's take: "'This proposal would leave thousands of struggling students with thousands of dollars in higher interest payments on their student loans. This will do a great service to lenders, but cause great harm to students.'"

Nice to see the media and Kerry noticing that a proposed bill would hurt students when they're trying to pay back their loans after graduation. Now, how about noticing that little lack of refinancing options for graduates who've consolidated?

Posted by Diana at 11:52 AM | Permalink | Comments (2) | TrackBacks (0)

The Minneapolis Star Tribune (free subscription) ran an editorial this week about the continued need for student loan consolidation. Citing the Republican backed legislation in the works the newspaper is arguing the needs of loan consolidation to help recent grads manage the growing cost of higher education.

"Now, in the face of tightening fiscal pressure, congressional Republicans instead are portraying fixed-rate student loan consolidation as a federal subsidy for well-heeled young professionals. They say it is consuming tax money that might otherwise be used to provide more help to needy students.

A skeptical view of that argument is warranted, given how little eagerness Congress has been displaying for helping students. Texas Democratic Rep. Silvestre Reyes voiced an alternative theory about GOP thinking: "The White House is again resorting to penalties against the most vulnerable Americans in order to finance the war in Iraq," he told the El Paso Times. Other critics say the change is being sold to Congress by big players in the student loan industry, which stand to gain financially if fixed-rate consolidation disappears. Besides, the Bush administration has never shown a reluctance to finance tax-cut benefits for really well-heeled Americans that reduce government's ability to finance program benefits for the poor.

Whether the real goal is more money for the military, the lenders or needy college students, the way to get it should not be to add to the repayment cost of student loans. Congress had it right in 1986: The nation has an interest in helping recent college grads establish their careers. Loan consolidations fixed at today's low rate levels will give those careers important financial breathing room. Providing that opportunity is the least the federal government can and should do for debt-burdened college students."

Posted by Liz at 2:05 PM | Permalink | TrackBacks (0)

Last week we told you about a collection of Education Lobbyists who were not satisfied with the recent Congressional efforts. The group sent letters to the Committee on Higher Education about issues they found with H.R. 4283. Today the Chronicle of Higher Education reports that two House Republicans have fired back at the Lobbyists. (Sorry, the story will only be available for 5 days without subscription.) Stephen Burd of the Chronicle writes:

"In a sharply written letter that they mailed to the college groups on Monday, the representatives -- John A. Boehner, the Ohio Republican who heads the House Committee on Education and the Workforce, and Howard P. (Buck) McKeon, the California Republican who leads the panel's subcommittee on higher education -- expressed outrage that the lobbyists called for "billions in new federal spending" on higher education at the same time that they "oppose reforms that would give more power to higher-education consumers and encourage federally subsidized colleges and universities to be more accountable."
...
"College lobbyists who had seen the congressmen's letter said they found it disheartening. "While their letter is high on rhetoric, they refuse to acknowledge the many problems in the bill and pointedly ignore the dozens of proposed solutions we offered," said Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education, which had written to the lawmakers on behalf of itself and 44 other college groups."
...
"Mr. Hartle said that colleges would take them up on that offer. "The letter's rhetoric is pretty harsh, and that's probably in response to some of the rhetoric in the letters they received from us," he said. "But their bottom line is that they want concrete proposals with legislative language to make changes. So the onus is on us to provide them with that."

Posted by Liz at 1:58 PM | Permalink

The Daily Iowan (the University of Iowa's newspaper) editorial board wrote a piece today on the plus' and minus' of student loan consolidation. The story mostly focus' on their recommendation of changing the consolidation program to a variable interest rate as a compromise between Republican and Democratic lawmakers.

"Currently, graduating students can consolidate their loans and lock in an interest rate for as long as 30 years. That interest rate is determined by the interest rate when the students graduate. Graduating now? You'd pay off your college loans at a 35-year low. Graduated five years ago? You'd still be paying off college at a much higher interest rate for the exact same degree. This system pushes students to graduate based on the market, rather than their academic career."

"A variable interest rate, however, would vary payments based on the contemporary interest rate. That would put students who graduated five years ago - but lost their jobs when the economy took a nosedive - in the same position as a student graduating now. When the economy recovers, both graduates would be in a better position to pay back their loans."
...
"Critics point to the difficulties of those entering public-service careers to pay of their loans at even these small interest rates. A difference of a few thousand dollars a year, which would happen if the economy grew and interest rates shot up, would be a crushing blow to such people, because their salaries do not tend to rise with the economy. This is a crucial problem that must be addressed by the reauthorization of this bill. Particularly for those who graduate when the economy is strong, paying back student loans is already a hardship. This bill must include a provision for loan forgiveness. Often available to teachers by both state and local agencies, loan forgiveness for an expanded number of careers would turn these vital jobs into fiscally viable options for students graduating with loans."

"The Higher Education Act is designed to offer education to a larger slice of the American public. It is also designed so we can learn from our mistakes; the law is not set in stone. We need to take advantage of this chance to help more incoming students get the funds they need to go to school, rather than keeping the money tied up subsidizing bank profit."

Posted by Liz at 1:06 PM | Permalink | TrackBacks (0)

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 | TrackBacks (0)

The Houston Chronicle is running an article (that appears to be reprinted from the Albany Times Union) about the pitfalls of consolidation... specifically the one-time consolidation rule.

"It was never meant to be a refinancing bonanza," said Tom Joyce, a spokesman for student loan giant Sallie Mae.

While a handful of laws have been proposed that would allow borrowers to refinance more than once, there appears to be little political impetus in Washington to adopt any of them. Rep. JohnBoehner, the Ohio Republican who is chairman of the House of Representatives' Education and the Workforce Committee, said in March that reconsolidation is "dead as a doornail," according to a higher education newsletter.
...
There are conflicting reports on whether that proposal would wind up hurting or helping students. Some wonder why students are being asked to shoulder any of this burden.

"Student loans shouldn't be a profit-making means," said Miriam Kramer, higher education coordinator for the New York Public Interest Research Group, which is partly supported by student money. The group backs reconsolidation legislation.

Variable-rate proponents argue that the switch will take away the inequity many face by consolidating at the wrong time. But that's of little comfort to those who consolidated when rates were at their apex.

Posted by Liz at 4:12 PM | Permalink | Comments (3) | TrackBacks (1)

Another story on H.R. 4283. After a cursory review of H.R. 4283, I've not seen anything in it that helps us on the refinancing front. As far as I can see, it contains no provisions on that issue. But the stories on the bill are interesting, if only for the dialogue they raise, and the almost anti-graduate sentiments that come out, like the following:

"Said Jim Boyle, College Parents of America's president: 'In a situation where there's a zero-sum game going on when it comes to budgets for higher education, our group wants to see money allocated to current and future college students, not to those who have already graduated.' "

Also note this MSN article urging borrowers to consolidate. As a nice change, the author actually talks about the one-time consolidation rule and how it screws us:

The bad news for the already-consolidated

Many borrowers locked in what seemed like great deals in 2000 -- only to see the prevailing rate drop by more than four percentage points since then.

'My daughter consolidated her $45,000 in debt just before (Federal Reserve Chairman Alan) Greenspan started lowering interest rates,' fumed Steve Lustig of Greenwood Village, Colo. 'Iíve called, written and e-mailed my congressional delegation (asking them to change the one-consolidation rule) . . . to no avail.'

Lustig said his daughter could save over $9,000 if she could refinance her loans at current rates, but chances for change are slim.

As Michael OíBrien of FinancialAid.com explains, major lenders have billions of dollars of loans in their portfolios that were consolidated at higher rates. Changing those rules would cost them a fortune and, some say, could even require a federal bailout, since the lenders count those loans as rock-solid assets.

The only way you can consolidate again under current rules is if you have another loan to wrap into the package. Even in that case, you wonít be able to lower the rate on the loans youíve already consolidated. Remember, the consolidated rate is based on a weighted average of the rates on the underlying loans.

Your best bet: pay your loans off as quickly as possible. An extra $100 a month could pay off that $20,000 loan in half the time and save you over $12,000 in interest.

Posted by Diana at 9:51 AM | Permalink | TrackBacks (0)

In today's Progress Report from the Center for American Progress there's an "Under The Radar" alert about H.R. 4283 (although not specifically name-checked). According to the Progress Report, "Figures released last week by the Department of Education "show the share of full-time college students who borrowed to pay for college rose from 30% in 1990 to 45% in 2000" I haven't come across this study so if anyone finds it please let us know.
If highly trafficked sources like the Progress Report keep up the Higher Education discussion, hopefully talk we can get a serious debate on the table in the upcoming election.

Posted by Liz at 10:52 AM | Permalink | TrackBacks (0)

Michelle Singletary's Washington Post article grades The College Access & Opportunity Act. (The Washinton Post site requires registration to read the article, but it's free.)

ï Thumbs down (way down) for a move that would change from fixed to variable the interest rate for consolidation loans. This is probably the most controversial issue in the bill. Anyone who has taken out student loans should be paying attention to this proposal. Right now, student borrowers can bundle their various loans into one low, fixed-rate loan that can be stretched out as long as 30 years. But we all know that interest rates are not likely to stay as low as they have been recently. If the provision passes and the loan rate is changed to variable, a lot of people will pay thousands of dollars more on their consolidated student loans.

A big thanks to Michelle Singletary for tirelessly talking about student loan consolidation (in particular the one-time consolidation rule) to so many different media sources. In addition to the Washington Post and syndicated columns around the country, she can now also be heard on NPR's Tuesday show "Day to Day".

Posted by Diana at 11:40 AM | Permalink | TrackBacks (0)

The various members of the House Subcommittee for 21st Century Competitiveness (the House subcommittee where all higher education legislation is debated) have received a total of $82,700 from Sallie Mae to date.

Is there a reason that all legislation that is debated in this committee benefits the student loan lenders LIKE Sallie Mae instead of the student borrowers?

Posted by Liz at 11:49 AM | Permalink | TrackBacks (0)

The Washington Bureau of KnightRidder published a breakdown today of the student loan debate by what each party is pushing as a solution. Interestingly the author of the story doesn't believe the student loan issues will be resolved with the reauthorization of the Higher Education Act.

The political debate over the student-loan program comes in the midst of the debate over reauthorizing the Higher Education Act, which pays for the government's educational-loan programs. It was introduced by the education committee's Boehner last week. While the act isn't likely to pass this year, the issue will come up again during the next presidential term.

Posted by Liz at 3:39 PM | Permalink | TrackBacks (0)

Another opinion column about the student consolidation loan interest rate debate.

Posted by Diana at 4:25 PM | Permalink | TrackBacks (0)

The Kerry campaign released a statement on student loans in which the Senator stated the he was against eliminating consolidation at fixed rates. While it makes no mention of the refinancing issue, it seems to me that Kerry's statement backs us up a little bit: "We need a market-based auction where banks get student loan business based on their ability to offer the best service at the lowest price."

Posted by Diana at 10:36 AM | Permalink | Comments (2) | TrackBacks (0)

This article from the Heritage Foundation by Krista Kafer seems to back up Rep. John Boehner's claims that the federal consolidation program benefits the rich folks. Heritage is a conservative foundation, so not too surprising that they'd back up Rep. Boehner's claims, but I think this has mostly been refuted by Michelle Singletary's article (posted previously).

Posted by Diana at 10:29 AM | Permalink | TrackBacks (0)

Another good article from Michelle Singletary calling out Rep. John Boehner, R-Ohio, chairman of the House Committee on Education and the Workforce for not being straight with the facts on the consolidation loan program.

"To back up his claim, Boehner used information from a report by the General Accounting Office that he says found that the chief beneficiaries of federal consolidation loans are not low- or middle-income students striving for college, but higher-income individuals who have graduated and entered the workforce.

Really?

Because I read the GAO report, and it does not say consolidation loans generally benefit rich people. Boehner didn't use the word rich, but that's what is implied in his letter.

Notice Boehner used the words 'higher-income.' His assertion may be true, and yet it is very misleading.

What the GAO report said is that the average income level for those who consolidate their student loans is $47,150. That's only modestly above the median U.S. household income of $42,000.

So technically, people who consolidate their student loans do have incomes higher than those who don't consolidate. I would think earning $47,000 a year still qualifies you as middle-income."

Posted by Diana at 10:00 AM | Permalink | TrackBacks (0)

A Houston Chronicle article by Shannon Buggs provides some good reasoning to back up the idea of allowing students to refinance consolidation loans.

"With this being an election year and MTV declaring the votes of 20 million people age 18 to 30 could decide the presidency, both political parties should be trying to woo young voters by working overtime to update and approve changes to the Higher Education Act.

But so many issues are swirling around this law, it would be a surprise if both chambers approved anything before the election. Congress is considering:

...

Modifying student loan consolidation rules to allow multiple refinancings or eliminate fixed interest rates on one-time consolidations. This is the hot issue now.

The consolidation debate centers on whether to spend limited public dollars on grants to current and future students, or on subsidies that lower the repayment costs of former students.

But that's the wrong way to look at it.

The government has a financial stake in helping both groups.

The more educated the taxpaying populace is, the more income it earns and more taxes it remits. Plus, former college students are better able to buy homes and save for retirement if they cut student loan burdens with low-interest consolidation loans.

So, if taking from one of these groups to give to the other doesn't fit social and economic policies, why is anyone considering it?

Because it distracts students from asking the right question.

The consolidation debate should be about whether it's better to give interest-rate breaks to young people just starting their careers or to subsidize the profit margins of lending companies."

Check out the whole article - it's very good.

Posted by Diana at 9:53 AM | Permalink | TrackBacks (0)

College Parents of America join with the Coalition for Better Student Loans.

"A heated debate has started over the debt of students who have graduated. Some graduates want to be able to refinance their student loans in the same way homeowners can refinance mortgages. But some legislators say government subsidies for student loans should be dedicated to those still in school, not to graduates aiming to play an interest rate game."

As I recall, the Coalition for Better Student Loans isn't in our corner on the refinancing issue. Do these parents think about what will happen after their kids graduate and are stuck with high interest rates, I wonder?

Posted by Diana at 4:32 PM | Permalink | Comments (1) | TrackBacks (0)

Go YOU! You're serious about getting legislation passed that brings you relief and makes student loan repayment fair for all.

We posed a short-term challenge to get our signatures to 1000. You got us to 1200! Actually, 1246 as of the time of this notification.

Have you reached out to your alumni associations? Have your brothers, sisters, moms and dads signed on? Give us #s and help us deliver for you!

This is a no-brainer. The more support we can demonstrate, the stronger we are.

Can we reach 1500 by Friday? It's up to you.

A single alumni association getting its alumni to join this fight can get us there in a day. Will you be the one to make that happen?

And if you do, please post about your success on the forum. We need your inspiration.

We need help. That you're here means you need help. Help us to help you. Get your friends, acquaintances, co-workers and family to sign the petition.

Posted by at 12:21 AM | Permalink | Comments (1) | TrackBacks (0)

Great article by Michelle Singletary in the Seattle Post-Intelligencer on the Congressional debate over interest rates on consolidated student loans.

"It's not as if these people stop needing help once they leave school. According to a survey released last year by Cambridge Consumer Credit Index, 68 percent of the people polled said their outstanding student loans prevented them from making purchases such as a house or a car."

Posted by Diana at 3:18 PM | Permalink | Comments (1) | TrackBacks (1)

So, about a week ago, I issued a challenge. We had fewer than 800 signatures to the web site, and we knew that if we -- collectively -- didn't start to get serious about the initiative to bring relief to millions of young Americans, we'd be SOL.

I asked for help. I knew 750+ signatures wouldn't make enough of a difference to get Congress' attention. We all knew that 1000 signatures wouldn't either ... but we had to start somewhere. So we asked for help.

And you delivered.

Less than one week later, we're 1100 strong! Props to you who have helped make this movement for real!!! Signatures are up almost 50% in just a few days!!! That's fantastic!

Admittedly, I was at a campaign rally this evening -- I won't say for whom but you probably can guess -- and couldn't wait to get home to see if we broke 1100. I had no doubt that we would, but thank you for my surprise that we're at 1125!!!

You're the most fantastic people! Thank you for your hard work! Let's keep up our momentum and send a message to Congress and to the White House that young people need relief NOW.

It's typical of the campaigns these days to send out a mandate -- let's reach X amount by Y date. I don't want to do that now. You've done such EXCELLENT work that I don't want to belittle you by something so transparent.

Let's kick pahootie (translate that as you wish) this week. Let's get ourselves to a really, really big number. Let's be creative -- let's reach out to our networks, let's get everyone we know to sign on NOW. Contact your alumni groups, your friends, your families, and help them to find a place on the petition.

Your work is tremendous. We will win if we have the numbers. Let's focus our energy, get our friends -- loan holders and not -- onto our list. Let's get our parents, siblings, coworkers, etc to join our fight. It takes signatures and awareness to send the message. And you've shown that you know how.

Again, thank you for your hard work. I'm humbled by our numbers, by how we've spiked so much so quickly. Let's capture this momentum and thrust ahead!

All my best,
Gerry

Posted by at 10:32 PM | Permalink | Comments (2) | TrackBacks (0)

John Kerry was in Rhode Island on Tuesday talking about his plans for higher education, including a $4000 tuition tax credit and government payment for college for those who agree to public service. Time to start bugging the Kerry campaign about student loan issues, and about what Kerry will do to help the thousands (probably millions) of voters who suffer from high student loan interest rates and inability to refinance.

Posted by Diana at 11:40 AM | Permalink | TrackBacks (0)

Congresswoman Rosa DeLauro spoke at Weslyan University last week and mentioned refinancing of student loans.

Posted by Diana at 10:16 AM | Permalink | Comments (2)

Bank One gets props by the Dept of Ed for being the #1 lender to students.

Tell us about your Bank One experience and what sets them apart.

Posted by at 3:21 PM | Permalink

The New York Times is running a story today about many of the proposed changes to the Higher Education Act (including changes to the one-time consolidation rule). The article cites a soon to be released report from the Congressional Research Service that addresses the following question: "How much of the burden of college debt should be shouldered by the government and how much by the students themselves?"

Posted by Liz at 10:26 AM | Permalink | Comments (1)

Wow! You've gotten the Gen Debt petition from 800 almost to 900 in TWO DAYS! TWO DAYS!!!! That's TERRIFIC! Great job!!!

Help us get to 1000 -- get others to sign the petition, to sign up for notifications, and to push to send Congress the message that millions of young professional Americans have trouble making ends meet because of the high cost of their debt! -- a cost that could be lowered by applying common sense to legislation.

We've got momentum!

Help YOUR CAUSE bust through 900 tonight!

Posted by at 7:30 PM | Permalink | Comments (4)

We broke 800! Yay Team! We're on our way!

We're closing in on that magical 1000 signature level. Getting to 1000 will increase our credibility and thrust forward our ability to be effective.

In how little time can we get the 200 more signatures we need to support our message: that the one-time consolidation rule needs to be changed and needs change NOW! Student loan debt holders deserve the same chance to lower their rates that everyone else can!

Look at your phonebook ... get a friend to sign on. Shoot some e-mails and send the link.

We're getting 1000 hits/day. If a fraction of those people gets just one more person on our petition, we ROCK. If all those people get just one more, we triumph!

And we all know we each can get more than one more ... Let's do it!

Posted by at 11:52 AM | Permalink

This Charleston Gazette article on college debt points out that in addition to student loan debt, many students graduate with massive credit card debt. One quote that caught my eye from a current student in the story:

"'I donít think it is going to be a big deal to pay off my loans,' Massey said. 'I am not really concerned about it. My goal is to have a good job two months after I graduate at the latest, and with a six-month grace period before I have to start paying back my loans, I donít see a reason to be concerned.'"

Didn't we all kind of feel this way while we were still in school? Oh, how wrong we were!

Posted by Diana at 3:57 PM | Permalink | Comments (3) | TrackBacks (0)

Take a look at these Newsday articles, part 1 and part 2 about the debt burden on students who want a degree. Part 2 deals a little bit with paying off the debt after graduation. Some pertinent points:

"39 percent of student borrowers leave school with 'unmanageable amounts of loan debts' according to Kathryn Rube, higher education associate of the National Association of State Public Interest Research Groups, based in Washington, D.C. The group's study defined that as 8 percent of monthly income, or about $270 a month for somebody making $40,000 a year."

"Steinberg, the LIU president, argued that 'lack of government support is driving the cost issue,' citing a public policy landscape that he said has shifted away from regarding higher education as a public good that society should help pay for. He cited the GI Bill to make his point.

'It didn't pay for everything but it came bloody close,' Steinberg said. 'What we have now is a retreat from that at the federal, state and local level. ... The federal government backed away in favor of loans.'"

Posted by Diana at 11:09 AM | Permalink | Comments (2) | TrackBacks (0)

Sorry everyone! We've had some technical problems over the past week with our server. Everything should now be operational again and back in order. Thanks for your patience!

Posted by Liz at 7:10 AM | Permalink | Comments (1) | TrackBacks (0)

By popular demand, check out the NEW MESSAGE FORUM for easier posting! See the new link on the right of this page, and post away!

Thanks for your patience over the past couple of days while our site was having problems! Murphy's Law required that at the very moment our webgoddess went on vacation abroad, this site would spike in users and simultaneously have all sorts of "issues." We apologize for your inconvenience.

Fortunately, Liz is back, the doctor is in, and the surgery was a success. :) THANK YOU LIZ! We're back and better than ever.

Posted by at 10:21 AM | Permalink

Please click here to link to the archive for yesterday's Education and Workforce Committee hearing. There, you can find .pdfs on the testimony as well as the webcast of the opening statement.

Posted by at 11:27 AM | Permalink

Here's an excellent article from the Village Voice by Brendan I. Koerner about "[w]hy America's young are being crushed by debt–and why no one seems to care." (They even use our Generation Debt name.)

"The average collegian in the U.S. isn't graduating into a world of boundless opportunity, but rather is $20,000-plus in the hole thanks to student loans and credit cards. So begins the snowball effect: The most desirable entry-level jobs often pay wages too low for the indebted, who must fork over a large percentage of their salaries to Sallie Mae or Citibank. Other posts are reserved for those who can afford to work unpaid internships, or whose parents can support them through an extra year or two of graduate studies."

Posted by Diana at 9:53 AM | Permalink | Comments (1) | TrackBacks (0)

"On Wednesday, March 17, 2004, the U.S. House Education & the Workforce Committee will hold a hearing on ìFiscal Responsibility and Federal Consolidation Loans: Examining Cost Implications for Taxpayers, Students, and Borrowers,î scheduled for 10:30 a.m. in room 2175 of the Rayburn House Office Building. The hearing is the latest in an ongoing series of hearings being held to examine issues impacting federal student aid programs as part of the reauthorization of the Higher Education Act." Check out the press release from the committee. You can link to a live webcast or you can check C-Span, which may cover the hearing as it is scheduled at that time to cover the House.

Released witnesses and contact information:

Ms. Cornelia M. Ashby
U.S. General Accounting Office
Director, Education, Workforce and Income Security
441 G. Street NW, Room 5928
Washington, D.C.
(202) 512-7215

Dr. Tom S. Neubig
Ernst and Young LLP
National Director, Quantitative Economics and Statistics
(202) 327-8817
Washington, D.C.
tom.neubig@ey.com

Dr. Robert Shapiro
Senior Fellow, Brookings Institution and Progressive Policy Institute
Chairman, Sonecon, LLP
601 13th Street NW, Suite 1100 North
Washington, D.C.
(202) 879-5820
rshapiro@sonecon.com

Posted by Diana at 12:02 PM | Permalink | Comments (6) | TrackBacks (0)

The online petition supporting rate relief for student loan borrowers has been up only a month, and with ZERO promotion, we just broke the milestone 400 signatures.

That's good. We can do better.

How many people do you think suffer from high student loan rates? More than 400? The other millions need to know about the petition, about GenerationDebt.Org, and about our fight to get legislation passed that brings hard-working borrowers the rate relief they deserve.

Please spread the word and provide the following link:
Petition which points to,
http://www.petitiononline.com/gendebt/

We can win this fight, but only with your participation, support and mobilization. Please join in spreading the word, posting, sending letters.

Posted by at 4:24 PM | Permalink | Comments (3)

Check out the following link to see what Alan Greenspan had to say on March 11 about student loans and mortgages:

Link here

In a nutshell, Greenspan speaks of student loans and mortgages in the same breath, advocating that "the market should determine what debt issues are required to finance student loans, in the same way that there are several kinds of mortgages." In the same way that the market has given rise to many trade-offs among home mortgages, Greenspan suggests the same should be possible among rate, term and structure among student loans.

He spoke on Thursday before the House of Representatives' Education Committee.

Posted by at 4:31 PM | Permalink | Comments (10) | TrackBacks (0)

Study Finds Reforming the Student Loan Consolidation Program Will Make More Financial Aid Available to Future College Students.

Find copies of this story on Yahoo and PR Newswire.

"Federal consolidation student loans will cost taxpayers at least $14 billion in interest rate subsidies on existing loans and, if legislative remedies are not enacted soon, an additional $21 billion on consolidation loans made between 2005 and 2011.

That is the conclusion of a new study authored by two noted economists: Kevin Hassett, Director of Economic Policy Studies at the American Enterprise Institute, and Dr. Robert Shapiro, chairman of Sonecon, LLC, and a non- resident Senior Fellow at the Brookings Institution and the Progressive Policy Institute.

The report, titled The Fiscal and Social Costs of Consolidating Student Loans at Fixed Interest Rates, explores the price taxpayers will pay to subsidize current consolidated student loans issued under the Federal Family Education Loan Program (FFELP) in various interest rate environments, as well as the economic inequities to borrowers who consolidate at different points in time."

Complete copies of the report can be found at cbanet, EFC, nchelp, or Sallie Mae.

Posted by Diana at 4:33 PM | Permalink | TrackBacks (0)

This article from the Christian Science Monitor web edition deals with the fact that many graduates from all different fields who want to do public interest work have to take private sector jobs instead to make their student loan payments.

"Almost 1 in 5 college and professional school graduates says he has changed his career plans because of student debt, according to the 2002 National Student Loan Survey from government-backed lender Nellie Mae.

These graduates may tend to shy away from low-paying jobs in nonprofits, the arts, or government, say some experts.

'The effect on young people is enormous,' says Max Stier, president and chief executive officer of the Partnership for Public Service, an organization that aims to attract talent to the federal government. 'The kinds of choices they might have had a generation ago are not available to young people today because of enormous debt.'"

Posted by Diana at 10:35 AM | Permalink | Comments (1) | TrackBacks (0)

Check out:
Bank Rate Monitor

An interesting piece of how much of our incomes we are spending on all forms of debt and why we find ourselves where we do.

Posted by at 8:11 PM | Permalink

Folks, lemme state the obvious: it appears we know who will be running for President in November.

As Gen Debt is NOT a partisan organization, I don't believe in focusing ONLY upon Ds or Rs, but rather upon getting this issue recognized and part of BOTH candidates' platforms as however is most expedient.

Tell us here what you're doing to access the two front-runners Kerry and Bush and to elevate this issue among them.

Some suggestions on what to do:
* Write a letter to the candidates, and tell your story in your own words. You may refer to the sample letters provided on this site, but customize them to your own language and experience.
* Contact your state's campaign headquarters for the candidate you favor (or both if you like), ask to speak with the head local policy person, and keep calling till you get him or her. Tell them about your personal situation, about how student loans are an anomaly among all other loans, and tell them about this resource
* Follow up with a phone call. Ask if they've received your letter. Ask to whom it would have been directed, and ask to speak with that person.
* Leave as many messages as you wish, but don't expect a call back ... Keep calling till you get the person you're looking for.
* When you have the person you're after, and eventually you will, ask for their e-mail address. If they haven't read your letter, be prepared to forward it right then to them, and wait with them to receive it. Ask them to take a quick peek, and ask whether this is something their candidate would consider supporting. Ask them then what they think should be the appropriate next steps, and who in their organization would be the one to move this forward.

Post what you're doing on this site -- let us know what you're doing and inspire us!

Posted by at 7:50 PM | Permalink

Any comments welcome here ...

Posted by at 11:33 AM | Permalink | Comments (19)

Pennsylvania State Representative John Pallone recently announced a resolution in the Pennslylvania House that would encourage Congress to revisit the issue of consolidating student debt more than once in the repayment lifetime. In this September 18, 2003 press release Pallone was quoted as saying, "The financial burden that students carry immediately upon leaving college is incredibly large and difficult to manage for someone just starting out in their career... The burden is even more problematic for lower-income loan holders as well as for any student who receives an advanced degree.î

Posted by Diana at 11:18 AM | Permalink

Any of our readers out the Seattle way may want to note that the NEA Higher Education Conference is next weekend. Their Saturday agenda deals with future legislative issues. For any of you in Seattle, the weekend of the conference might be a good time to contact your local news media about the problem of consolidation loan refinancing, they may want to do a report on it while the conference is in town.

Posted by Diana at 2:52 PM | Permalink

Check out this commentary on UPI's website about our predicament. Once you get past how overwordy this thing is, there is some dirt on Sallie Mae here...

Posted by Diana at 10:14 AM | Permalink | Comments (2)

Check out the ACP's open letter to Congressman McKeon. Their letter supports 2505, but generally supports allowing for reconsolidation/refinancing.

Posted by Diana at 9:56 AM | Permalink | Comments (1)

Here's a release from the Consumer Bankers Association against allowing refinancing of student consolidation loans.

And here's a release from Rep. Rob Simmons, a Republican cosponsor of H.R. 2711. It IS a bipartisan issue!

Posted by Diana at 11:51 AM | Permalink | Comments (2)

College Cost Central is a new subsite set up by the 21st Century Competitiveness Subcommittee of the House of Representatives to explore the expanding cost of a college education.

America's higher education system is facing a crisis. Decades of dramatically increasing costs, in both good economic times and bad, are threatening to push the dream of college out of reach for millions of students and families. Led by 21st Century Competitiveness Subcommittee Chairman Howard P. "Buck" McKeon, Republicans on the Education & the Workforce Committee have pledged to hold colleges accountable for these dramatic increases to help keep college affordable.

Posted by Liz at 5:55 PM | Permalink | Comments (1) | TrackBacks (0)

Check this Department of Education study out for some (admittedly old) general statistics on the debt burden of 1992-1993 bachelor's degree recipients in light of their financial circumstances in 1997. Proof that the government studies and knows that borrowers are having trouble repaying loans after college.

Posted by Diana at 2:31 PM | Permalink | Comments (2) | TrackBacks (0)

Well, I received a polite email from the American Medical Association telling me that in fact the bill number was correct. They are actually supporting legislation from 2001 as outlined on this form from their website.

Hmm... how exactly does one support legislation that's been dead for 3 years and is no longer even in the Congressional record or Thomas?

Posted by Liz at 4:39 PM | Permalink | Comments (2) | TrackBacks (0)

We ran across an interesting press release today from an organization called 'The Coalition for Better Student Loans' who claim they are, "A unique coalition of financial aid administrators, parents, loan providers and organizations representing more than 2,000 colleges and universities today proposed a five-part plan to increase access to higher education by bolstering the federal student loan program."

One the contact people for this organization is Dallas Martin ( NASFAA President), whom you may all remember from his testimony before the House Subcommittee on 21st Century Competitiveness, who actually stated that any consolidated loan should carry a HIGHER interest burden under the guise of, "To retain a consolidation loan program that can be used as a refinancing tool or to expand refinancing options will cost the government large amounts of resources." Apparently Sallie Mae has become a government institution when we weren't paying attention, so you obviously won't be surprised at all to find out that the "Coalition for Better Stuent Loans" is PARTNERED with the US's leading Student Loan lender? That's right, Sallie Mae is listed amongst the group's affiliations on their website.

That's not a conflict of interest right?

Posted by Liz at 10:19 AM | Permalink | Comments (2)

You can read about their efforts here. From their website you can contact your representatives to push support for H.R. 3273, the "Consolidation Student Loans Flexibility Act of 2001."

Well, HR 3273 is actually an amendment to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, so we are awaiting word from the AMA as to which bill they actually do support.

Posted by Liz at 11:11 AM | Permalink | Comments (1)

TG has a story up that gives an interesting perspective into the cost of refinancing consolidated loans to the government. Read it at: http://www.tgslc.org/lege_report/2003/lr_031208.cfm.

Posted by Liz at 7:58 PM | Permalink

We've launched a NEW PETITION for several reasons...

1. The previous petition was sent to Congress at the end of last year... signatures since that point have not been forwarded.
   
2. We have changed our support to H.R. 2711 for a variety of reasons... see the next story for more information.

Posted by Liz at 3:12 PM | Permalink

Also, if one of your Representatives is on the Subcommitte for 21st Century Competitiveness (where HR2711 has been referred since 07/28/03)... they NEED to be contacted to move forward with the bill. See the table below for those members:

Posted by Liz at 3:38 PM | Permalink | TrackBacks (0)

While our current petition is over 2200 signatures, we are going to have to create a new one for a variety of reasons.

1. Our petition was sent as was to both houses of Congress on Dec 31, 2003. It was the longest deadline we could set when we originally drafted the petition last spring.
   
2. While our original focus for this project was on H.R. 2505, we have decided that it would be best to put our resources into H.R. 2711 (The Student Loan Fairness Act of 2003). If you click the links on the right about the two bills, you can see why we feel H.R. 2711 will be a better policy to support.

Posted by Liz at 7:10 PM | Permalink

The House Committee on Education and the Workforce has put up a press release from GOP leaders to get parents and students involved in plans to help the rising cost of college. We highly recommend you take their survey.

GOP Education Leaders Unveil ìCollege Cost Centralî Website to Seek Input from Parents & Students

Washington, D.C. ñ Providing a new resource for parents, students, and taxpayers troubled by dramatically increasing higher education prices, Republicans on the U.S. House Education & the Workforce Committee today announced the launch of the College Cost Central website. The website can be accessed at [here].

ìSkyrocketing tuition increases are having a devastating effect on students and families,î said Rep. John Boehner (R-OH), chairman of the Education & the Workforce Committee. ìThe consumers of higher education ñ students and parents ñ need more information so they can fully exercise their power in the college marketplace.î

ìThe College Cost Central website is a step in the right direction, and we will continue to do more to engage students and parents in our efforts to strengthen higher education by increasing sunshine and transparency,î continued Boehner. ìToday, weíre asking for their input through a new survey and weíre providing a new information source. But we wonít stop there; through reauthorization of the Higher Education Act, we will continue our efforts to empower the consumers of higher education by providing them with more accessible and understandable information to help shed light on the often-confusing world of postsecondary education.î

Students and parents are encouraged to visit the College Cost Central website and complete a survey on college costs and what the federal government can and should do to help keep college affordable.

Tomorrow, Rep. Howard P. ìBuckî McKeon, chairman of the 21st Century Competitiveness Subcommittee, is expected to offer legislation that would hold colleges accountable for tuition increases, and provide students and parents with greater access to easily understandable information on the cost of higher education.

ìI have long been concerned about decades of dramatic increases in the cost of higher education that are pricing students and families out of the college market,î said McKeon. ìI believe we can no longer stand by and allow hard-working students to miss out on the opportunity for a college degree simply because of skyrocketing tuitions. The future of our nation requires that we move past the rhetoric and provide real reform ñ millions of students and families are depending on us.î

ìIím pleased to join Chairman Boehner in announcing the College Cost Central website, which demonstrates our commitment to working with the consumers of higher education. And by offering legislation to hold institutions accountable for cost increases, I believe we will take another step closer to a higher education system that is driven by the needs of students and parents,î McKeon continued.

ìSince 1965, the Higher Education Act has made the dream of college a reality for millions of students and their families,î said Boehner. ìWe have an obligation to ensure the billions of dollars we are investing in higher education are continuing to put college within reach for needy students and families. The College Cost Central website is part of our larger effort to do what is best for the consumers of higher education.î

# # # # #

Posted by Liz at 12:16 PM | Permalink

Just a quick reminder... the petition will be sent at the end of the year to both Houses of Congress... so get your friends, relatives and anyone else possible to sign it now! We are at 1881 and counting...

SIGN IT NOW!

Posted by Liz at 12:05 AM | Permalink

Stolen From Msg Board

The case the court will hear involves a former student in Tennessee who owed more than $4,000 in state-backed education loans. She sued the state to get out of the loan, and the state replied that it could not be sued. A bankruptcy judge refused to dismiss the suit and the Tennessee Student Assistance Corp., a state agency, appealed to the Supreme Court.

The case is Tennessee Student Assistance Corp. v. Hood, 02-1606 and can be found with a Google search.

Maybe someone should find out what law firm represents this borrower and contact that firm to see if they want to take on our cause, a case challenging the consititutionality of the contract clause that prohibits borrowers from refinancing a consolidated loan. I doubt the borrower in the Tennessee case, with a $4,000.00 loan, is paying this law firm to go all the way to the Supreme Court on their behalf. Hence, if they take on our cause they might also take the case without the requirement of the borrower paying legal fees. Its worth a try, especially when one considers the fact that if a bank ever tried to do that, tell a borrower that they can't refinance a loan, the bank regulatory authorities would put a stop to the practice without any hesitation or delay.

Posted by Liz at 12:00 AM | Permalink