Kjerstin Laine has been making tiny monthly payments on her student loan, and she doesn’t understand why her balance has been getting bigger instead of smaller. People who are this dumb should not be allowed to borrow money. Oh, and try drinking some water.
By Daniel Alman (aka Dan from Squirrel Hill)
October 31, 2022
Kjerstin Laine is yet another example of how it’s too easy to get admitted to college. Since she finished graduate school with $98,000 in debt, she’s only been paying $300 a month toward her debt. And she doesn’t understand why her balance has been going up instead of down.
It should be illegal for people this stupid to borrow money.
Also, she needs to learn to drink some water.
https://www.yahoo.com/news/meet-30-old-110-000-123000305.html
Meet a 30-year-old with $110,000 in student debt who chose her job in hopes of public-service loan forgiveness — but her balance just keeps growing
By Juliana Kaplan
October 30, 2022
Kjerstin Laine. Courtesy of Kjerstin Laine
Like millions of student-loan borrowers, Kjerstin Laine is in loan-relief limbo.
For Laine, a 30-year-old who has over $110,000 in student debt, the $20,000 in forgiveness she’s set to get from President Joe Biden’s plan is just a drop in the bucket. As a first-generation college student whose debt has shaped the trajectory of her career, she fears her balance will balloon even more after pandemic-era payment pauses end and interest starts accruing again.
“I never miss a payment, always on time, and yet my balances never go down,” Laine told Insider. “I don’t understand how people can’t see that there is something wrong with that picture.”
Despite working through college and taking measures to cut down on the cost, Laine completed her degree in 2014 with a grand total of $98,000 in debt from her undergraduate and graduate studies. In the eight years since, accruing interest has brought her balance to today’s amount, despite her consistent repayment.
Laine chose her job in communications for an education-advocacy nonprofit because it was a good fit for her skills — and because it could set her up for Public Service Loan Forgiveness, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments.
But that program has historically been riddled with flaws, and she recently paused that strategy to take a marketing-agency job with a salary that brings her much closer to the $90,000 the federal government estimated she needed to make a year to afford to pay back her debt. She’s also paying off medical debt.
“I also had to leave the nonprofit sector to get anywhere near that, obviously,” she said. “So it’s like that Catch-22.”
Laine is one of many millions of US borrowers stuck in an untenable situation. She’s grateful for the relief she’s set to get — though the legality of Biden’s forgiveness is still under scrutiny — but she’s not sure she’ll be able to afford monthly payments when they restart in January.
Her situation points to the larger structural issues underpinning the student debt crisis, where first-generation and lower-income students take on huge debt burdens to get ahead and up their earnings but still find themselves buried under ever-growing balances. Many, like Laine, have shaped their lives around the hope of assistance — now that it’s here in some form, it may not be enough.
“The hardest thing is that I trusted in this system that I was told from a very young age was going to be my path to prosperity or a decent — not anything exorbitant — but a decent middle-class life where I could give back to the community that helped raise me and supported me through education programs, meal programs, things like that,” Laine said. “And it feels like that’s a big broken promise now.”
Interest on student loans can balloon, meaning balances don’t go down — and could go up
As a college student in California, Laine worked at several jobs in places like restaurants and grocery stores. She took classes at her local community college and at her university in the summer and winter to try and reduce her expenses. She graduated in 2012, a semester early to cut down on costs, racking up nearly $18,000 in debt total for her undergraduate degree in journalism.
She went on to a “dream school” for a master’s in journalism, still working part time and leaving with an additional $80,000 in debt in 2014. At the end of her time in school, she was hospitalized for dehydration after she said she ran herself ragged.
Despite consistent payments, the years since graduation have seen Laine’s debt grow. It comes down to the issue of interest capitalization, which is when accrued interest tacks on to a borrower’s principal balance and can lead to debt loads being much larger than what was initially borrowed.
Biden’s administration has taken steps to prevent interest capitalization. In July, it released a proposal to end the practice in every instance that isn’t required under the Higher Education Act, like forbearance periods, but those changes won’t be implemented until next year. And borrowers are still struggling to stay on top of their payments.
For borrowers like Laine, within a few years, interest could cancel out any of Biden’s relief she received.
“I was paying $300 until the pandemic hit. I was paying $300 a month, I think, for three to four years, and my balances never went down,” she said. “They always went up.”
Public servants like Laine can get their debts forgiven — but many can’t even get in touch with their loan servicer
While Laine is a big proponent of public-service loan forgiveness, she said it “has been plagued by its own issues.”
The company that manages the entire Public Service Loan Forgiveness portfolio — MOHELA — isn’t making matters any easier. After a number of loan companies ended their federal contracts last year, all borrowers enrolled in PSLF were transferred over to MOHELA, and the process hasn’t been seamless.
Insider previously spoke with two borrowers who wanted to get simple questions on their PSLF payments answered but ended up spending hours on the phone and never even got connected to a representative who could answer their questions.
“I’m really concerned about MOHELA as a servicer in total,” Laine said.
While MOHELA never commented on the hours-long hold times, Scott Buchanan, the executive director of the Student Loan Servicing Alliance — a group that represents federal loan servicers — previously told Insider that the Education Department decided how many resources it gave loan companies, which affects how many customer-support staff they can hire.
But with the PSLF waiver expiring on Monday, which allows past payments, including those previously deemed ineligible, to count toward forgiveness progress, borrowers are in a time crunch to access the expanded relief. The department recently introduced permanent PSLF fixes for after the waiver’s expiration, but that doesn’t eliminate confusion some borrowers may be experiencing with their payment history.
“I’d love nothing more than to be able to dedicate my entire career to serving this sector,” Laine said. “All of my career choices are kind of centered around this debt, and that’s a really tough, not fun place to be in.”
Gender Studies Grad Demands Blue-Collar Worker Pay Off Her Loans
https://www.youtube.com/watch?v=YIZd4x0mD0I
I wish that Democrats would answer my question: Why are Democrats funding student debt forgiveness with money from innocent taxpayers, instead of with money from the fraudulent colleges that sold worthless degrees?
By Daniel Alman (aka Dan from Squirrel Hill)
September 5, 2022
I’m against student debt forgiveness.
But since it is happening, I have one question:
Why are Democrats funding student debt forgiveness with money from innocent taxpayers, instead of with money from the fraudulent colleges that sold worthless degrees?
According to the U.S. Bureau of Labor Statistics, between 1980 and 2020, regular inflation has caused average prices to increase by 228%.
However, during that same time period, college tuition has increased by 1,184%.
The student debt bailout is paying for hot tubs, spas, rock climbing walls, steaks, and movie theaters.
Source: https://www.forbes.com/sites/caranewlon/2014/07/31/the-college-amenities-arms-race/
Another area where colleges waste money is in the worthless policy known as “diversity, equity, and inclusion.”
The Federalist wrote:
“Some universities had strikingly large numbers of people with DEI responsibilities in their job titles. At the University of Michigan, for example, 163 people have formal responsibility for providing DEI programming and services. The University of North Carolina at Chapel Hill has more than 13 times as many people devoted to promoting DEI as providing services to people with disabilities. Georgia Tech has 3.2 times as many DEI staff as it does history professors. The University of Virginia boasts 6.5 DEI staff for every 100 professors.”
The Center Square wrote:
“UC Berkeley employs 150 professionals and 250 additional students dedicated to addressing “systemic inequities,” according to a document obtained this week by The College Fix. The public research institution’s Division of Equity and Inclusion spends $25 million annually to support the 400 full and part-time staff to run diversity and inclusion-related programs, according to the document, an eight-page job description for a new Vice Chancellor for Equity and Inclusion.”
So the real problem isn’t a lack of bailout money.
The real problem is that colleges are spending money on frivolous luxuries that have nothing to do with education, such as hot tubs, spas, rock climbing walls, steaks, and movie theaters, as well as on left wing brainwashing known as “diversity, equity, and inclusion,” with its overbloated budgets to pay huge numbers of employees who job duties have nothing to do with education.
Bailing out student loans doesn’t address these huge wastes of money.
On the contrary.
The bailout only gives colleges an incentive to raise their tuition even more.
I wish that Democrats would answer my question: Why are Democrats funding student debt forgiveness with money from innocent taxpayers, instead of with money from the fraudulent colleges that sold worthless degrees?
An alternative to debt forgiveness: This writer says eating peanut butter and jelly for lunch instead of going to a restaurant made them feel happy and in control of their life.
https://www.yahoo.com/lifestyle/m-18k-debt-went-no-143039541.html
I’m $18k in debt, so I went on a no-spend month. Here’s what I learned.
By Chegg Life
August 31, 2022
Standing in my kitchen on a recent morning, making a peanut butter and jelly sandwich for lunch later that day, it occurred to me that what would appear to be a fairly mundane (albeit delicious) task was actually so much more.
Maybe that’s because, during the previous month, I spent close to $700 on restaurants alone. That’s like a million peanut butter and jellies.
It was that revelation that inspired a month-long no-restaurants-or-shopping challenge I assigned to myself in July. I could not continue to ignore my mounting bills, and I could not go on living with the constant reminder and anxiety of my $18,000 of credit card debt.
Since getting laid off in March 2021, I’ve been funding my life on a freelance salary in one of the most expensive cities in the world. I was living beyond my means, swiftly approaching my credit limit, and I felt completely out of control. Something had to change. And fast.
I was lucky to have a supportive (and much more knowledgeable friend) in my corner. We (she) quickly went on the offensive and introduced me to Tiller, a budgeting software she uses. She showed me how to calculate my expenses for the past three months and make a budget for the long term. Fun, I thought, but begrudgingly obliged. It was like watching a scary movie. But much like seeing Scream 5 in theaters after years of convincing myself I would be too scared, confronting my spending head-on made me realize that, like the Scream franchise, this isn’t that scary at all.
Looking at my expenses, I made the difficult-to-me decision to cut restaurants and shopping out completely for a full month. No shopping for non-necessities. No takeout. No dinners out with friends. No “Let’s grab a drink!” Could I actually do it? It was an off-putting prospect for a person who has been known to refresh Resy in hopes of scoring a last-minute, hard-to-get reservation for sport. But it felt worth trying.
Along with my shopping and food restrictions and newfound budgeting habit, I knew I needed to take action to feel like I was getting things a bit more in control; it was abundantly clear during this deep dive into my credit card statements that I was not in control at all. So, I began to make a few painful decisions, canceling a laundry list of plans that I simply could not afford: a dinner plan that very evening, a trip to Seattle later in the month to celebrate a friend’s wedding. I even called a beloved bathing suit brand to cancel an order I’d placed just days earlier. As I mentally crossed out things I’d been eagerly anticipating, I returned to a saying someone shared with me that I’ve found applicable in so many situations:
Just because something feels bad doesn’t mean it’s wrong.
I expected some change as a result — like, perhaps, a little extra literal change in my account at the end of the month. And that certainly happened. But there were so many other unexpected lessons, too.
I felt so much gratitude
When I first took shopping and restaurants out of the equation, I worried about how I’d fare without the dopamine hit that comes only from clicking “buy now” or the excitement of that initial sip of an overpriced cocktail — would I feel like I was missing out?
That notion was tested a few times during the month. I went to a concert at a baseball stadium (tickets purchased pre-challenge) mid month, where, under normal circumstances, I would have typically bought, at the very least, chicken fingers and french fries and merch and, at the most, all of the above plus a $20 beer in a souvenir cup.
But I packed a sandwich and some wine in a thermos and tried to put fried food out of my mind. In line with a friend who wanted to get a drink, I felt the temptation creeping in. I’m not sure if it was the concert or the spending gods, but as we approached the front of the line, a very generous (and intoxicated) man turned around, announced he’d be buying drinks for everyone in the line and pulled out his credit card.
With the exception of the gifted tequila, I was mostly surprised to find myself not feeling deprived. I actually more grateful for not only the things I already have but for the people in my life that make it so special and sweet. Every time I shared my challenge with someone and they suggested going for a walk or having a picnic, it felt like my heart swelled three sizes.
I got more creative
That same friend who first sat me down in front of the computer to face my spending demons also helped me realize something that never occurred to me in all my life living in New York where your social life revolves around paying other people to cook for you. Meeting for dinner is so…easy.
Removing it as an option would mean getting more creative, finding more fun. I went on walks, on picnics, to the beach and to see free movies in the park that we always talk about seeing in the summer but never do. I snuck grocery store snacks into the movies. I went to Philadelphia to visit friends who planned an entire weekend of free or affordable activities — a pizza night and a bike ride. Another friend decided to host a potluck for her birthday dinner instead of going out. I found myself looking forward to finding new activities to do that didn’t involve spending money, and looking even more forward to checking my bank account and keeping tabs on my budget each day.
Who is she? I could barely recognize myself.
I tried my hand at new cuisines
Aside from the ubiquitous PB&J, I found myself trying out new recipes, like this miso-glazed salmon and a kale Caesar salad I cannot stop making. And, as an unexpected bonus, I feel… really good. It may not be sustainable to make myself every meal for the rest of forever, but having a basic idea of everything I was consuming for a month really made me feel like I was taking care of myself.
I connected with so many people
When I reached out to friends I’d made plans to spend the weekend with prior to starting this challenge, I was plagued with anxiety about how they would react. I wrote to them explaining what was going on and assured them that they were still welcome to go out to eat, that I would meet up with them when they were done. But they were more than happy to stay in and cook. Trying new restaurants is always exciting, but when it comes down to it, we make plans with people to connect and spend quality time together. And you don’t need to spend money to do that.
I started posting daily video diaries on my TikTok, mostly as a way of holding myself accountable and to keep a record of the experience. But soon, it grew into a community. I heard from so many different people who were either at some point in their debt payoff journey or looking for some inspo. I was happy to share both.
And I realized that, when given the chance, everyone has a debt story they’re eager to share.
I was initially scared to share publicly the actual amount of credit card debt I had. I was afraid of my mom seeing it, my family members on Facebook judging me. I was afraid of being made fun of, ridiculed for not knowing how to handle my money. What happened was quite the opposite.
I was on a walk with my friend (the one who helped me with the budget) one morning, agonizing over my finances when I just sort of…blurted it out, I told her I had $18,000 in debt — saying that number aloud for the first time. I waited for the shock, the disapproval. Bless her, it never came.
Once it was out there, my DMs almost immediately filled up with other people going through a similar situation, some offering tips on how to crawl out of it, some sharing personal anecdotes and even some comforting solidarity. It was not only refreshing; it was eye-opening, too. It made me realize that talking about finances openly and without judgment is something many of us are craving, and not necessarily getting.
I’m not sure what comes next. But as this month comes to an end, I have spent over $2,000 less than the month prior. I paid $1,000 off my credit card balance, put money away for taxes, and felt no anxiety about what my balance was while handing my debit card over to pay for some essentials. I didn’t get sick of peanut butter and jelly, and I have yet to miss a restaurant.
Mostly, I’m excited about the prospect of finally being in control of my finances — and my life — for what feels like the first time.
Los Angeles high school principal Richelle Brooks says she shouldn’t have to pay back her $230,000 in student debt. Schools should teach their students about personal responsibility. Principal Brooks is teaching her students the exact opposite.
By Daniel Alman (aka Dan from Squirrel Hill)
August 25, 2022
This essay was written by a Los Angeles high school principal named Richelle Brooks. She thinks that she should not have to pay back her $230,000 in student debt. She is setting a bad role model for her students. Schools should teach personal responsibility. Principal Brooks is teaching her students the exact opposite.
Here are some of the rules of personal responsibility that Principal Brooks is teaching her students to break:
1) Keep your promises. If you borrow money and sign a contract where you promise to pay it back, keep your promise.
2) Don’t borrow money if you can’t afford to pay it back.
3) Live within your means.
4) Take responsibility for your actions.
Here is the essay by Principal Brooks:
https://therealnews.com/opinion-i-am-not-asking-for-debt-forgiveness-i-am-demanding-justice
Opinion | I am not asking for ‘debt forgiveness.’ I am demanding justice
President Biden has the power to cancel all student loan debt with a stroke of his pen, a move that will ensure Black women like me have, for perhaps the first time, a real shot at prosperity
By Dr. Richelle Brooks
March 31, 2022
When I graduated from college, I knew my purpose was to serve this country’s most vulnerable. For the last eight years, I have served as an educator and high school principal in Los Angeles, California, and in 2021 I founded ReTHINK It, a nonprofit that addresses the material needs of marginalized communities. I have dedicated myself to empowering and educating young people and advocating for folks victimized by systemic and systematic oppression.
But I drastically underestimated the cost of this work—both personal and financial.
At present, I owe $230,000 dollars in student loan debt. Like countless borrowers, I owe more than I did when I first graduated college. I am but one example of the stark racial disparity governing the student debt-loan crisis: After 12 years of payments, the typical white male in the US has paid off 44% of his student loan balance, while the typical balance for Black women borrowers grows by 13%.
On April 4, debtors and our allies from around the country will head to the doorsteps of the Department of Education in Washington, DC, to demonstrate our collective strength and send a clear message that Joe Biden must do more than simply extend the payment moratorium. He has the power to cancel all student loan debt with a stroke of his pen, a move that will ensure Black women have, for perhaps the first time, a real shot at prosperity.
For years, I believed my student loan debt was the result of my personal failings—a lie that countless borrowers, particularly those who are Black or from poor and working-class families, come to internalize. Then, in September of 2020, I joined the Debt Collective, an organization fighting for the abolition of all forms of debt through the creation of a debtor’s union. Soon, I became one of the Biden Jubilee 100; we declared ourselves on strike from ever repaying our student loan balance, and demanded the full cancellation of student loan debt within President Biden’s first 100 days in office.
Joining the Debt Collective allowed me to finally politicize my experience. More importantly, it showed me that I was not alone: All student loan debt is the result of the systemic failures in this country. And the policy decisions and economic arrangements that created this system, which has buried generations under mountains of un-repayable student loan debt, comprise a catastrophic societal failure that can and must be rectified.
Growing up, I was told that achieving the American Dream would require going to college so I could secure a career. Home ownership, one of the most important ways that families build intergenerational wealth, is comically beyond reach. In my hometown of Carson, California, the median home price has increased over the past year by 19.7% to over $700,000.
Racist banking practices have also made the prospect of home ownership increasingly infeasible for Black borrowers. Wells Fargo has faced renewed public scrutiny in recent weeks, following a bombshell Bloomberg report that found the bank had denied home loans to 53% of its Black applicants in 2020, at the height of the pandemic-induced crisis and the ensuing economic hardship. The highest-earning Black families, or those earning over $168,000 a year, were approved for home loans at a rate nearly identical to the lowest-earning white families, or those earning less than $63,000 a year. The blatant discrimation was infuriating, yet hardly surprising.
For my generation, the American Dream feels like just that, a dream—it is never going to become reality. With my student loan debt, owning a house of my own is a hopeless fantasy.
The same goes for most millennials. According to one recent survey, student loan debt has kept some 35% of millennial borrowers from buying a home—nearly double the amount of baby boomers. It is especially hopeless for those of us from poor and working-class communities. Student loan debt decimates our credit-worthiness, barring many from ever owning a home.
For millions of us, wage discrimination makes the dream even more illusory. Although Black women make up a substantial share of the workforce, they earn just 63% of what white men are paid. Overall, women across nearly all races and ethnicities experience higher rates of poverty than men, a disparity due largely to single motherhood and the gender pay gap. But Black women are disproportionately represented among all women living in poverty: In the US, they constitute 22.3% of women living in poverty, but only 12.8% of the population.
As women aim to “pull themselves” and their families out of poverty, low and stagnant wages fail to allow them to make a living. Debt piles up. Women graduate college owing, on average, about $22,000—for men, it’s $18,880. Black women graduate college owing nearly twice the debt of men, an average of $37,558. Thanks to astounding interest rates, these balances grow over time.
Without assertive action from the Biden administration, many families will be unable to free themselves from the shackles of debt. Between 1989 and 2019, the national household net worth for white families grew from $462,000 to a whopping $953,000; meanwhile, the national household net worth for Black families only moved slightly, from $82,000 to $141,000.
Evidence shows that the racial wealth gap is growing wider, decade after decade. Student loan debt will exacerbate this as the indebtedness of Black families continues to grow. While white families can and tend to pass on their wealth and net worth to succeeding generations, Black families pass on debt and use their resources to support family members who also lack wealth and net worth. On average and in the aggregate, wealth compounds with each generation for white families, while indebtedness compounds with each generation for Black families. We are fighting now for the survival of our children and their children.
As I came to be more involved with the Debt Collective, I watched Black women suffer under their growing loan balances, even as they continued to show up for their families, communities, and this nation. But I also realized that, together, we had power beyond anything I could have imagined.
Black women have been outspoken about the perverse systems barring us from any form of upward mobility. We are doing everything “right” to ensure our future generations aren’t forced into the same dire situations: going to college, graduating, pursuing well-paying careers, attempting to purchase homes and build savings and resources so we can pass them on to future generations. But we cannot dismantle entire systems without the help of those who most benefit from our marginalization.
Specifically, this means white men, the most privileged demographic in this country—they must use their power, wealth, and social capital, to repair the harm endured by people who are categorically oppressed by the very system that empowers them. The longer Joe Biden fails to act, the longer he perpetuates the violence of a white supremacist system that further traps us in debt.
By canceling student loan debt, Joe Biden could create jobs, stimulate the economy, and narrow the racial wealth gap. Doing so would keep trillions of dollars in the hands of people and communities. Families would have less debt and more money to spend, providing immediate and direct economic stimulus to those impacted most by the pandemic: Black families and other families of color. Debt cancellation would provide Black families, especially millennial-parent households, a chance at home ownership, immediately increasing the possibility of building up one’s net worth and having intergenerational wealth to pass on. It’s that simple.
As countless pundits have noted, Black women voters saved the country from a second Trump term, all without adequate recognition or compensation. Empty praise and calls to “thank Black women” are not enough. We need material redistribution and economic transformation. We are owed nothing less.
We have paid enough—and I say no more. I am not asking for “debt forgiveness.” I am demanding justice.
This person is “so confused” by the concept of compound interest
‘I’m so confused.’ I’m a school nurse who took out about $30K in student loans — but over the years they have ballooned up to $96K. How could this even happen and what can I do about it?
March 9, 2022
Question: I’d like to obtain advice on tackling student loan debt. I do not have private loans, and I owe approximately $96,000. I’m so confused because initially my loans were less than $30,000, but I think the rest of it comes from interest. I’m not sure what I am looking at with my loans. My loans have been in forbearance, and I want to investigate loan forgiveness options. I am a school nurse and support my family, so my income is limited. Can you provide direction? It would be greatly appreciated.
What an idiot: “I have $131K in student loans and can’t afford my life, despite making $110K a year…. I didn’t care what the cost was – I didn’t even look at what I was signing”
‘It doesn’t seem fair’: I have $131K in student loans and can’t afford my life, despite making $110K a year. How to get out of student-loan debt faster
By Brienne Walsh
December 29, 2021
Question: I’m now 39, and in a better place in my life than I was roughly 10 years ago, when I decided to take out over $100,000 in student loans to attend a food policy and nutrition master’s program. The program was the only master’s program I got into, and I didn’t care what the cost was — I didn’t even look at what I was signing.
Now, in total, between my undergrad and grad loans, I owe $131,000. Some of the loans are federal and some of them private; one of those companies charges an interest rate of 6%. Though most of my loans are on pause now (thanks to the federal government), I’m worried about what will happen when that stops. The loan payments are too expensive, even though I’m now a nutrition and public health consultant who works on a contractual basis, and I make a good salary — $110,000 a year.
But our mortgage costs $1,100 a month; daycare is about the same, and car payments are $400. Otherwise, I feel we live very frugally: We even bathe our son in a Tupperware tub because our bathroom needs to be renovated, but we don’t have the money for it! We can’t even afford, as it is, to contribute to retirement or pay for some much-needed dental work. I honestly don’t know what we are going to do when my loans become unfrozen. How can I get out of debt faster? — Erin
Answer: First up, you’re not alone in feeling overwhelmed by student loan debt, and you’re doing some things right, like “limiting the mortgage and the car loan,” which are both “well within your range for your income level,” says Mitchell C. Hockenbury, a certified financial planner at 1440 Financial Partners in Kansas City. But, Hockenbury says, with your low mortgage and other seemingly reasonable expenses, you should see if there is more money to put towards debt payments. Even if there’s not, once the daycare stops, you will have that money to more aggressively pay down debts.
The next question is whether to refinance loans to save money. But first, consider that right now your federal loan payments are on pause through May 2022, and that you should be careful about refinancing a federal loan into a private loan as you will lose some of the federal loan protections, such as income-based repayment and forgiveness options. (You can get details on how much a refinance could save you here). But Ethan Miller, the founder of Washington, D.C.-based financial planning firm Planning for Progress, says Erin should likely refinance some of her private loans, as rates are pretty low right now (see the lowest fixed student loan refinance rates you can qualify for here). “If you feel confident in your income, and you know you’ll have a job for many years, this is the best option,” says Miller.
There are other options as well, says Hockenbury: “Is there a possibility to take a cash-out refi? Interest rates are low, housing prices have soared. Perhaps she could use the cash to pay down some debt,” he says. Though, of course, she needs to be sure she can repay that or she risks losing her house.
Though for some borrowers, student loan forgiveness may be an option, it does not sound like Erin would qualify for a loan forgiveness program like the Public Student Loan Forgiveness Program, as she’s a contractor at a government agency, not a full-time employee, explains Miller. (See details on loan forgiveness, cancellation and discharge here to see if you might qualify.) But if she looks at her budget, she may find extra money to pay down her debt faster; refinancing at least some of her loans at today’s low rates could make the payments more manageable, and a cash-out refi on her home may be another option. Best of luck, Erin!
Defund Columbia: Federal loans for high-cost, low-value graduate schools have enabled the Ivy League master’s-degree racket to thrive.
https://www.nationalreview.com/2021/07/defund-columbia/
Defund Columbia
By Preston Cooper
July 13, 2021
Federal loans for high-cost, low-value graduate schools have enabled the Ivy League master’s-degree racket to thrive.
Columbia University is among America’s most elite schools. Many believe that a graduate degree from Columbia or another Ivy League school will lead to financial security for life. But a recent investigation by Wall Street Journal reporters Melissa Korn and Andrea Fuller shows that this perception, so eagerly cultivated by universities, is a fiction.
Master’s-degree students at Columbia and many other elite schools take on hundreds of thousands of dollars in student-loan debt. Yet after they graduate, too many find that the degree did not open the doors promised. The existence and scale of these subpar graduate programs is tied to irresponsible federal lending practices, which extend unlimited lines of credit to graduate students with no regard to their ability to repay.
Students in Columbia’s Master of Fine Arts in film program typically accumulate $181,000 in federal debt, according to the report. But when they enter the labor market, their median salary is just $30,000 — less than one-sixth of the debt they took on. Few, if any, of those students will fully repay what they borrowed from taxpayers.
“There were 55 students in my incoming class at Columbia’s MFA Film program,” says former student James Stoteraux. “Only 4 of us ever managed to make a career out of it. . . . Columbia traded on its reputation to sell them big dreams that it could never deliver.”
Fueled by federal aid, master’s-degree programs have become profit centers for elite universities. Ivy League schools coast off their selective undergraduate programs, which earn the schools top spots on the U.S. News & World Report college rankings. They leverage this prestige to churn out graduate degrees that would make many for-profit colleges blush.
The strategy has paid off. During the 2019-20 academic year, Columbia collected $268 million in federal loans on its graduate programs. The undergraduate schools, on which Columbia built its reputation, only supplied $16 million in federal loans.
Columbia officials have even admitted to the scheme. The school’s vice provost for academic programs says that master’s degrees “can and should be a revenue source,” according to the Wall Street Journal report. The cost of that business model falls on students, who are responsible for paying off the debt, and taxpayers, who inevitably will be stuck with part of the bill when the government forgives the loans that students can’t pay.
There’s only one way to solve this problem: Defund Columbia and other elite institutions guilty of this practice. End the federal loans for graduate schools that have enabled the Ivy League master’s-degree racket to go on for so long.
Congress originally created the federal student-loan program to help low-income students afford college. But student loans have transformed into a welfare program for rich universities. Graduate loans now account for two in five loan dollars issued by the federal government. That has not happened by chance; it is the result of deliberate policy changes.
Created in 2006, the federal Grad PLUS program allows graduate students to borrow an effectively unlimited amount from the federal government, provided they attend an accredited college or university. After taking on the debt, students are allowed to pay it back through income-based plans, where payments average just $154 per month. Ten or 20 years after a borrower starts payments, any remaining debt is canceled.
The Congressional Budget Office estimates that 60 percent of the loans issued in 2021 and repaid in this manner will eventually be forgiven. Internal Education Department documents suggest that over $400 billion of the federal government’s loan portfolio will not be repaid. To be sure, students themselves will be responsible for paying a lot as well. But colleges and universities are running away with the profits.
Congress could put an end to this with one simple policy change: Stop supporting graduate programs with federal loan dollars.
There’s a reasonable economic justification for federal lending to undergraduate students, since most have no credit history to speak of and might need government help to get a loan. But that argument generally does not apply to graduate students, who are in their 20s and 30s. The economic rationale for a federal graduate-loan program is nonexistent.
Indeed, there was a thriving private market for graduate loans — one that could be engaged once more — before Grad PLUS arrived on the scene. Students who needed to borrow large amounts for a high-value degree, such as medical students, could almost always secure private funding, and usually at a lower interest rate than the federal government offered.
But programs with outrageous tuition costs and meager earnings payoffs would have a hard time pocketing funding from a private lender that cannot simply pass losses on to taxpayers, as the federal government can. Only the presence of federal graduate loans, with their heavy implicit subsidies, makes high-cost, low-value programs possible on a large scale.
Problems are best solved by removing their root causes. Defunding Columbia and other graduate schools is the most effective way to rescue graduate students from unaffordable debt and taxpayers from the burden of cleaning up the mess.
I really like this idea from Kurt Schlichter: “student loans need to come from the school and to be dischargeable in bankruptcy”
Kurt Schlichter just wrote this excellent column, with a whole bunch of ways to improves colleges.
Of Schlichter’s many excellent ideas, this one is my favorite. He wrote:
Third, student loans need to come from the school and to be dischargeable in bankruptcy. A school is going to be a lot less eager to say, “Sure, go ahead and major in Norwegian Feminist Dance Theory” if they are on the hook when their ardent young scholar can’t get a gig that can pay back the sticker price.
That’s brilliant – absolutely brilliant.
I hope Schlichter’s idea gets adopted as national policy.
A New York City environmental organization called “BK ROT” violates OSHA safety regulations by forcing its employees to dangerously use their feet as brakes, “Fred Flintstone style,” on a bicycle, while hauling “almost eight hundred pounds” down “substantial hills”
* A New York City environmental organization called “BK ROT” violates OSHA safety regulations by forcing its employees to dangerously use their feet as brakes, “Fred Flintstone style,” on a bicycle, while hauling “almost eight hundred pounds” down “substantial hills.”
* Sandy Nurse, the organization’s founder, is running for political office.
* Nurse also thinks she shouldn’t have to pay back her college loans.
By Daniel Alman (aka Dan from Squirrel Hill)
February 15, 2020
In New York City, a woman named Sandy Nurse created an environmental organization called “BK ROT.” The organization collects food scraps and other organic waste, and turns it into compost.
As part if its green mission, all of its employees travel by bicycle.
The New Yorker recently wrote the following about this:
Five days a week, Victor Ibarra rides a bicycle through North Brooklyn, collecting food waste from restaurants, coffee shops, and other small businesses and packing it into plastic tubs on a trailer that he tows with his bike. There are two substantial hills on his route, and when the tubs are full the entire load—waste, trailer, bike, Ibarra—adds up to almost eight hundred pounds. “Uphill is really hard,” he said the other day. “But, actually, uphill is a lot easier than downhill. Going downhill, I have the hand brakes pressed on, but the bike is still going.” To stop completely, he has to use his feet, Fred Flintstone style.
Ibarra is twenty-three. His employer for the past six years has been BK ROT, a nonprofit hauling-and-composting operation in Bushwick.
This is very dangerous, and certainly a violation of OSHA safety rules.
Nurse also thinks she shouldn’t have to pay back the money that she chose to borrow for college, even though she chose to sign a legal document promising to pay the money back.
CNBC recently wrote the following about this:
Sandy Nurse doesn’t see why she needs to be $120,000 in debt “just for trying to improve my understanding of the world.”
And so, after a decade of struggling to repay her student loans, she plans to stop trying. She hopes others will join her, too, in a national strike against the country’s outstanding student loan debt, which is marching toward $1.7 trillion.
“It’s a way not to look at ourselves as failures because we’re failing to pay back an excessive amount of money for knowledge,” said Nurse
Nurse’s comments are despicable. Instead of admitting that she is a deadbeat and a liar, she is trying to falsely portray herself as being a victim.
I wonder how Nurse would feel if her customers who paid for their compost with a credit card were to call their credit card companies and have the charges removed, and Nurse ended up not getting the money that her customers had promised to pay her.
To make matters even worse, Nurse is running for political office to become a member of New York’s City Council.
We already know that, in the name of being green, Nurse forces her employees to use their feet as brakes like in The Flintstones.
Since Nurse is running for political office, I wonder if she wants to force the entire population to do the same thing.
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