Student Loan Debt: July 1st + What's Next?

Today, I've decided to write about something that has been a big issue for me. Student loan debt. Unfortunately, I have a lot of it. Also, I see what it does to other people's lives. Not just friends and family, but many others are suffering under the weight of student loans.

I'm going to write about this issue again and maybe on a regular basis. I believe that what happened with mortgages and the current issue with foreclosures is going to play out in a similar way with student loans. Maybe this is the legislative issue that will take care of #33 on My Life List.

The salaries and jobs that were needed in order to pay back these student loans do not exist in large enough numbers. They have not for some time and I'm not sure that they ever will again. At least with bad mortgages, homeowners can walk away from the house or sell it. There's no option like that with student loans. You can't give back your education. You're trapped with the debt and may wonder if the degree or degrees were worth it. Some graduates even leave the country in order to escape the debt. Maybe it makes sense, when so many jobs have been and continue to be outsourced. Even President Obama was only able to pay off his student loans after receiving royalties from his best selling books.

The House and Senate both have pending legislation that would provide some relief from student loan debt through discharge in bankruptcy.

S.3219 -- Fairness for Struggling Students Act of 2010
H.R.5043 -- Private Student Loan Bankruptcy Fairness Act of 2010

Both pieces of legislation were introduced on April 15, 2010. If you agree with this legislation, then please contact your Senators and your Representatives and let them know you support this legislation. I'm pretty sure that Student loan providers will have all sorts of lobbyists trying to fight this relief and any other changes to the student loan status quo.

We the people must speak up if we want something done. This legislation is just one piece. There needs to be a big overhaul in the student loan system.

Also take note that July 1st is a big date for student loans. Read this press release from the Project on Student Debt. The Student Loan Borrower Assistance website also has plenty of good information. If you have a federal student loan, you may be able to do a direct consolidation loan and move it out of the hands of a student loan company directly to the Department of Education.

*Updated 7/1/10* A new press release: U.S. Department of Education Marks Historic Day in Higher Education

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Comments

lori said…
Thank you so much for this information. This is an issue for me as well. I find it insane that the banks are guaranteed payments and, short of death, no relief is afforded the borrower. I will definitely be following this issue.
Sharlene T. said…
Will be watching this to see what is finally decided...never had a student loan so really can't comment on it...hope it gets resolved to everyone's satisfaction...
starry said…
Thanks for al the info Anali, I don't have a student loan but my daughter has.
Nance said…
I've always said that it's a Cruel Irony that, in this country, we tout the value of a college education and then make it almost impossible to get one by raising the price of books and tuition to insane levels. How can we encourage an entire generation to become bankrupt in this manner? My son has two student loans, so we are alert to this as well. Also ridiculous is FAFSA's assertion that parents should bankrupt themselves in order to finance their childrens' educations. I don't understand their "formula" for financial aid. It's all insane.
christina said…
this is a great post!
i will keep my ears open to this.

there is something in common between you, president obama, and my hubby... law school. and that ain't cheap. Wow! great careers but at such a heavy price.
thank you for this, my friend.
xo
Liz Dwyer said…
Ugh, student loans. I want to cry sometimes when I think about how many years I have left to pay those suckers off. And then I always get the folks who suggest I enroll in an MFA program. I'm like, with what money??? Great post, Anali!
Lisa Johnson said…
lexlocilori - You're welcome! I was hoping the press would cover this legislation more. Something really needs to be done.

sharlene - Count yourself super blessed to have no student loans. I fantasize about the relief that I would feel...

starry - Hopefully some of the new rules will make things better for her.
Lisa Johnson said…
nance - It really comes down to education being a for-profit business, even though most colleges and universities are non-profits. They are money making organizations and I hate that I feel this way now, but I feel that their priority is making money not on educating students.

christina - Glad to share the news!

los angelista - I have cried! Ugh!
Anonymous said…
Thank you!!!Thank you!! I needed this information so bad.It is horrific when you work your entire life and earn your degree,then have a bad break and feel like the Grim Reaper(student Loans), make me wish i would have just bartended the rest of my life, so i can feel free of a burden i cant catch up on or escape.
Lisa Johnson said…
anonymous - You're welcome! Thanks for stopping by and for the comment. It's a very unfortunate situation for many of us. I can't write or think about the subject for very long or else I'll just get too upset. *sigh*

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