The 99% Declaration » 10. Student Loan Debt Refinancing

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# 10. Student Loan Debt Refinancing

Grievances Add comments
Dec 082011

Student Loan Debt Refinancing. Our students and former students are more than $1 trillion in debt from education loans. These young people have far fewer employment prospects due to the financial collapse directly caused by the unbridled and unregulated greed of Wall Street. Ensuring a higher education, particularly in the fields of science, engineering, technology, green energy and mathematics, is no longer a luxury for the few and must now be viewed as a national security issue. Banks receive virtually interest free loans from the Federal Reserve Bank and then charge upwards of 6% interest to our students for profit. Because education is the only way to secure our future success as a nation, interest on student debts must be immediately reduced to 2% or less and repayments deferred for periods of unemployment. Subject to the provisions of grievance five, the tax code will be amended so that employers will receive a student loan repayment tax deduction for paying off the loans of their employees. Outright federal grants should be provided to those students who pursue and obtain degrees in the sciences, green energy, mathematics, technology and engineering. Moreover, to reduce the principal on all outstanding student loans, a financial transaction surcharge, similar to those fees charged by banks on consumers, will be introduced to banks and securities firms. The current economic crisis, the worst since the Great Depression, resulted in the $1.5 trillion dollar bail out of Wall Street, secret Federal Reserve loans, and unknown losses of trillions of dollars to the economy. Work study programs should be expanded to increase access to higher education; universities and colleges that do not reduce tuition to affordable levels shall lose federal funding; and non-citizens who obtain their education in the United States should be provided an accelerated path to citizenship so the investments made in these students remain in the United States.

“Above all things I hope the education of the common people will be attended to ; convinced that on their good sense we may rely with the most security for the preservation of a due degree of liberty.” -Thomas Jefferson, December 20, 1787 (to James Madison)

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### 16 Responses to “10. Student Loan Debt Refinancing”

1. flaja says:
   2012/01/25 at 1:09 pm

   Eliminate government guaranteed student loans and the amount of money that can be spend on tuition would shrink and schools would then have to reduce the tuition they want to charge and then more people could afford to go to school without having to get government aid. Then we wouldn’t have any trouble with restructuring student loans.

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2. druidess59 says:
   2012/01/23 at 5:45 pm

   I’ve had a student loan since 1985 when I went back to school to improve my ability to have a career where I could earn enough money to raise my 2 children without my ex’s child support. I did not use it for anything but school tuition (UCSB & Antioch, a private university), and what I needed to support my kids. I worked 1/2 time as a house cleaner and had a job on campus as a research assistant. I also worked summers, and, in 1989, I got a part time job with the county I live in. I was still in school until 1993, when I graduated from Antioch. I was still working for the county as a departmental assistant, still not making enough to chip away at the loan.

   My loan was bought and sold so many times, I was beginning to feel overwhelmed. I could not pay the 1500/month the loan holder expected me to pay. They told me to “move into a smaller house”, “use public transport instead of owning a car.” I switched to William D. Ford, as I was told there was a way to limit the amount I paid every month and it would be paid off in 20 years.

   William D Ford did not consider my case a “hardship case” in order to lower the payments from 1500 or so down to what I could afford. Of course, they garnished my wages and I’ve been paying 15% of my gross twice a month. I can afford that; however, they would not accept that amount of money (roughly 800/month) because they said it would not even pay off the interest. That is when I found out that I was being charged %35.00/DAY!!! interest.

   All I want them to do is take all the money I paid them over the years and apply to my original debt. You don’t have to forgive my whole loan – just consider my payments PAYMENTS on what is owed minus interest and penalties.

   I cannot even get credit to buy a new car which I need and at the rate I’m going, I won’t be able to have this paid off before I croak. Oh – by the way, our bargaining unit (social workers) just received a 3.5% pay cut as well as cuts to benefits.

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3. ezeflyer says:
   2012/01/21 at 7:56 pm

   If we can bail out the banks, we can bail out students. Forgive all student loans

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4. pfolman says:
   2012/01/21 at 4:22 pm

   Abolish student loans and increase taxes on the rich !!

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5. pfolman says:
   2012/01/21 at 4:20 pm

   EDUCATION should be FREE !!

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6. pfolman says:
   2012/01/21 at 4:13 pm

   Education is a right and in the United States that right is under siege.
   In Germany, we have almost free education and I am eager to work for Americans to have that equal right as well. I believe, that education in this country is deliberately so expensive in order to keep people enslaved. Keeping them (us) this way will ensure the Plutocrats the ‘free hand’ they need in order to not being disturbed in their actions of what they do best; ruling this country by ruining it aka sucking out all resources, money, and labor, then dropping the poor and move on to the next source. We can’t let that happen. We need to fight and we need to use all tools that are available to us !! Education is a right, not a contract !

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7. pfolman says:
   2012/01/21 at 4:07 pm

   http://www.occupystudentdebtcampaign.org/

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8. allielyn says:
   2012/01/20 at 10:45 pm

   I also believe that those who pursue education degrees should be included for federally funded grants. It is my belief that there are many highly intelligent and qualified people who are not attracted to the teacher profession because of low pay and its under appreciated status in our current society. At the same time, there are many teachers who are wrecking havoc on the education system due to “tenure” that allows bad teachers to remain in the profession regardless of their teaching ability. I would like to see included in this portion the ability for teachers who attain excellence in the classroom to have a portion of their loans forgiven each year, pending review of their teaching practices and the teacher’s commitment to continued education. This practice is already considered standard in regards to review for tenure. It would simply add incentive for intelligent people to teach our nation’s children.

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9. nitewatchman says:
   2012/01/14 at 11:10 pm

   I would like to bring up a point of discussion if I may concerning the list of grievances. Actually two points of discussion.

   1. I personally think that there should be a law that states that if a person is paying toward a loan and sends in a little extra above the minimum payment, that over payment amount should automatically be applied toward principle. I’ve been paying on student loans for many years now and I’ve sent in a little over the minimum payment amount, not much over, but enough over the years that it should have paid down the principle amount on the loan. Instead, unless I make it a point to tell them to apply that over payment to the principle, it gets applied to the interest. It seems like a small point but that really can add up. It just seems a bit predatory to apply over payments to interest instead of principle.

   2. I think student loan forgiveness may be too much to ask for, but college education is paramount to the success for our future. I would like to see college education easier to obtain by every American. But let’s be honest here. The majority of us have been given 12-years of education paid for with public funds. Upon graduation from high school the graduate is already in debt to the tax payer. I think that we (the tax payer) deserve a pay back of those first 12-years and a practical application of that education. I think it should be mandatory for every young adult to serve our country for at least 2-years. They should be given a choice of options. Military service, peace corps, working at a homeless shelter, perhaps volunteering to work in a nursing home or an orphanage, maybe allowing service to a religious organization that would send that young person on some sort of “mission trip” would be acceptable. The point is it should be mandatory for every young person to give back to society and oh by the way, if you give us 2-years, we will give you 2-years worth of college (Associates degree, tuition and books). If you give us 4-years and we will give you 4-years of a state or public college (Bachelors degree, tuition and books). Of course there would be an exception of this requirement for anyone that has a disability that makes this public service a hardship.

   Any thoughts? This may or may not be the proper forum for this discussion. It was just something on my mind and I thought I would share.

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   - pfolman says:
     2012/01/21 at 4:16 pm

     Ever heard of FREE EDUCATION at a better quality than the current one without ruining the country?

     It’s ok, I know your answer !

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10. robdinsmore says:
    2012/01/11 at 11:29 am

    Reducing the interest rate on loans will go a long way. They were low up until the middle of the last Bush presidency when they were allowed to baloon up to nearly 8%.

    Lower interest and some better tax breaks to help reduce debt. If a student was earning enough money for it to matter they could deduct $4000 each if they paid their tuition out of pocket.

    Why not allow people with student loans to deduct $4000 in principle for each year that they attended college while paying off their loans? As it is now only the rich or people earning an MBA part time while earning full salary can really take advantage of this tax break. It’s not a lot of help, but it is something. And oddly if you go part time you can stretch this tax break out. Ie. 4 years you can deduct 16k, 6 years it is now 24k.

    I would prefer if they allow this amount to be used as pre-tax payments towards student loans. You could do this in many ways. One is you take the degree level, AS, BA, MS/MBS, JD/MD, PhD and assign a number of years allowed for each. 2*, 4, 2, 3, 4 and then add up the numbers to get years total. I put star because AS is a subset of BS but all other degrees are cumulative. So someone with an MBA gets 6 years of credit which is 24k. Now this person can deduct up to 24k from their income over the entire term of their loan repayment, but it has to go to pay off student loan principle. ( there is a tax break for interest already) We would need a system that allows for pre-tax dollars to be deducted from your paycheck and sent to the student loan holder.

    I know it seems convoluted, but the current tax code makes that the case. There are so many tax breaks that only a small subset of people can really take advantage of that always favor the well off. Why can someone who can afford to pay for college in cash deduct a large portion of that cost, whereas those who have to go into debt to better themselves cannot? Politically you could never remove this deduction or the Mortgage interest deduction (favors well off over those who have to rent and those with bigger mortgages get bigger deductions ), but we can find a way to make them apply to more people.

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11. sushiney says:
    2011/12/27 at 7:36 am

    I feel very strongly that a grievance must relate to government activities and not an individuals personal choice or to their personally agreed upon contract terms.

    I believe in public service and a partnership with higher education would best resolve the problem of these profiteering educational institutions and their private equity owners.

    I know many individuals who spent many years repaying their student loans who in all earnest will not support any such special interest item.

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    - mspollok says:
      2012/01/12 at 10:10 pm

      This is the government giving the banks huge free money so they can earn interest on the backs of our students. If we do not educate our population we are done for.

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      - sushiney says:
        2012/01/20 at 10:28 am

        Addressing the cost of post secondary & technical education is how this must be presented to be broadly accepted…. It cannot seem like a bail-out….

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12. Nathan D says:
    2011/12/19 at 2:08 am

    I’ve commented on items 5, 8, and 9. If we implement my suggestions on those items, the student loans will probably take care of themselves. Otherwise, we’re just spending federal government money, borrowed at interest from the Federal Reserve system, to pay off those debts. Granted, the 0.25% to 4% interest rates on the Federal Debt may be cheaper than the 6%-8% charged to the students, but it won’t solve the underlying problems: a debt-based currency and private monopolization of natural resources.

    However, we should allow student loans to be wiped clean in bankruptcy. And if we implement my suggestions in 5, 8, and 9 use the extra money to eliminate student debts.

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13. Liz Ellis says:
    2011/12/18 at 11:52 pm

    Students are preyed upon by lenders. Many students do not understand, or are not interested in understanding (because of their young minds) the principles of debt. Debt education must be an integral component of any student loan. Not just a 30 minute class without time for questions – REAL debt education. What is credit? Is credit a right, or a priviledge? What does “debt” mean? How is a credit score calculated and tracked? What is compound interest? What is deferment? Who are the lenders and what are their priorities – do they have a student’s best interest in mind, or are they out to make a profit? And, what are the different repayment schedules? How can a student pick a repayment schedule that works for them on a small salary, or no salary at all – generally the expected when they graduate.

    These are the components of a good debt education class every student should have, when applying for a loan. They should be required so that students are well informed about debt before choosing a student loan as a way to pay for their education.

    Finally, the Public Servant Student Loan Forgiveness Act should be made a permanent part of the U.S. Code. Any citizen who serves the public for 10 years, and makes 10 years of consistent student loan payments, after that time shall have the remainder of their student loan forgiven.

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