Season for Change

Alas the change of the season is upon us and while fall is my favorite season of the year the significant drop in weather has also given way to the cold/virus season. Speaking with friends in Chicago and Boston as well as family in Raleigh, NC I am realizing this cold/virus is making its way around the country. I have found myself under the constraints of this cold for the last few days leaving me plenty of time to catch up on Grey’s Anatomy and think about the future. Recently my thoughts have been turned to another quickly spreading larger national epidemic: Debt.

Student Loan Debt is rapidly becoming one of the largest forms of debt amongst people under 35. The average cost of a year of tuition, fees, room & board for the school year 2010-2011 will be $34,046 according to the education-portal research. That means four years at college will cost $136,184 without including books, supplies, presentation materials and the basic cost of entertainment/extra-curricular’s a student may participate in. Even before the state of the economy was flailing and withering away being able to pay $136,184 for a child’s education seems like an impossibility. Top that off with the fact that most families consist of 2-3 children so the idea of paying for a college education upfront becomes unimaginable for parents today.

My program in college was small and consisted of about 20 graduates in my class. Only 4-5 students in my program’s class had any financial help from their parents when it came to paying for college. Out of those 4-5 students only 1-2 had parents who were able to avoid taking out any student loans to pay for their children’s education. That means 90% of the people around me on a daily basis have some form of student loans to pay back, and most of those people have their whole college education to pay back.

When I started College I had no credit and no debt, deeming me almost invisible to today’s society. At 18 I took out my first college loan of $13,000. It was to cover the difference of expenses I could not. I had worked for 2 years already at that point and had a little money saved to put towards my freshman year. Yet it was not enough and I needed help. My mother co-signed on my first loan, and although she warned me time and time again of the dangers of taking out loans I did not understand what a life of paying them back would be. At this point in my life I had never lived on my own. I did not know what electricity, cable, heat or food really cost. I had no concept of what “the cost of living” really meant and what it would take for me to have a semi-decent life in Chicago or Boston. And while I have always been an early bloomer in my life no amount of explanation from my parents or the loan company could have made me understand how hard it is to provide for yourself at that point.

I was able to take out my next student loan at 19 years old completely by myself. I thought it was awesome that I didn’t have to ask my Mom for any help and I could do it by myself (foolish I know). Starting that year I worked 40-70 hours every week for the next three years while completing school full time. I did this so I could avoid depending entirely on loans to pay for things like housing, food, books, and general living costs. Still I had to take out loans to cover tuition and did not understand the repercussions that come from loan debt. But I had a glass half full of optimism that I would graduate and get a great job and everything would be ok. And the cycle continued for two years.

Next came graduation and “the real world” as John Mayor so lovingly sang about. 1 month post graduation is when the loan company will finally tell you what your monthly repayments will be. They will not even address it with you until then. And when the fateful day arrived none of my friends expected to get the monthly bill they received (myself included). 6 months post graduation is when all students must start to repay their loans. The amount of interest to be paid is so much greater then one can calculate especially because all loans come at different rates, and some can fluxuate. At this point your options are pay, defer (only if you start grad school) or do forbearance. The forbearance means you can post pone payments for 3 months at a time for a total of 24months, but you still accrue the interest during this time period, and you have to pay a fee out of pocket to forebear them. So there were my options: pay, forbear but pay more later, or ruin my credit.

The problem I have found is not just the economy collapsing or the fact that I decided not to pursue my field of study post graduation, the problem is that privatized loans can do whatever they want (Including but not limited to making you pay all the money back in 15 years instead of 30 years). Who decided that it was ok to allow an 18 year old to borrow thousands of dollars? A person who does not have the right to drink or rent a car is capable of understanding private student loans? And drinking is destructive but being thousands in debt is not? Someone who can’t get a loan for a house or car because they have no credit can take out thousands or hundreds of thousands of dollars in educational loans. And why does the most important part of our society cost so much? Studies have proven that education leads to less war and poverty. I would much rather pay for entry into government funded museums or pay more for public transportation or electricity or food and instead have the government subsidize college the way they subsidize corn!

This topic has been most inspired by one of my best friends, Emily. Emily called me last night to talk about issues she is having with student loans. She works a fulltime day job doing customer service and a night job at a bar and yet is barely making ends meet. We went to school together and this year I watched as she traded her immense talent and dreams of designing environmentally friendly hotels to take a job at a call center with a company that had health insurance and a steady paycheck. Her payments are much higher then expected and she cannot feasibly make them without trading something essential like food or shelter. I felt the desperation in her voice when she told me how the loan company was refusing to work with her and find a solution. She is responsible and trying very hard to do the right thing and yet they will not even hear her out on lowering her payments. Aren’t these the same companies we just gave a $700 billion dollars to? Our tax dollars went to crooks that are already stealing from us and now they won’t give her an inch to breathe. And let’s be honest, we all know they’re going to go bankrupt in the near future even post bailout because this system is so unstable.

The irony of it all is that knowledge is power and ignorance is bliss. You have a great college education and learn of all sorts of things about the world leading you to want to see things and help people. But when you owe someone $40,000-$150,000 and you can not actually experience those things you’ve learned of. So what’s the point? You have to go to college to “get a good job” but do good jobs even exist anymore? And why isn’t the government prioritizing education, especially post-secondary education? I know Obama is working on a bill to stop private loans from robbing people blind, and making new rewards for paying on time but as Emily so brilliantly said to me last night “What about all of us who have loans now? Are we now stuck here in the middle and the breaks will only apply in the future?” I say no. It’s time to take matters into our hands and make this a priority in the government.

I have an idea of how to reach our local congressmen and get this dealt with now, but I am going to need help. If you presently have or had student loans in the past send me your story. Tell me how it’s affected you and how you feel. Tell me if you gave up dreams and if you pay your taxes. Tell me about what you want to do and what you like and what it’s like to make the payments on time. Tell me the good, bad and ugly and any ideas of relief you may have like incentive or forgiveness programs. And then tell your friends. Have them send me their story on facebook. Let’s compile stories from all over the country and make a composite like petitions and a documentary and let’s take it to congress. I’ll work on that part you just have to share your story and get your friends to do the same! Help me take a stand and try to make our lives better so we can make other people’s lives better. I’ll be waiting. Xoxo