Student loans: As debts hit $1 trillion mark, protesters plan Occupy-type events
Student loan activists in New York and some 20 other cities are gathering Wednesday, when student debt is expected to cross the trillion-dollar threshold. Among their student loan proposals: The federal government should cover all higher-education costs.
Student loan activists in New York and some 20 other cities are gathering Wednesday, when student debt is expected to cross the trillion-dollar threshold. Among their student loan proposals: The federal government should cover all higher-education costs.
President Obama鈥檚 college-campus swing urging action on student-loan debt is neatly tied to Wednesday鈥檚 1TDay, named for the moment that student debt is expected to hit the $1 trillion mark. Protesters against this debt load, which they deem 鈥渂eyond tolerable,鈥� are gathering in Manhattan鈥檚 Union Square with concurrent actions in some 20 cities from Amherst, Mass., to Santa Cruz, Calif.
鈥淭his is the first step in a political process,鈥� says lead organizer Andrew Ross, professor of social and cultural analysis at New York University. His involvement stems from a growing awareness of his own students鈥� burden, he says, pointing to the fact that NYU student debt is some 40 percent above the national average.
鈥淚鈥檝e been aware that my own salary depends in part on students racking up an enormous debt that takes decades to pay off, if they even can,鈥� he says.
The 1TDay group, which is in solidarity with the Occupy movement, has four key proposals:
鈥� The federal government should cover all higher-education costs, at both two- and four-year colleges.
鈥� If loans are to be made at all, they should be with zero interest.
鈥� All colleges should open their books for total transparency.
鈥� There should be a one-time debt forgiveness, or 鈥渏ubilee.鈥�
Paying for an education 鈥渋s not the equivalent of buying a flat-screen TV,鈥� he says, since an education forwards the interests of both individuals and the nation as a whole. 鈥淭he entire economy has an interest in a well-educated population,鈥� he says, adding that families ought to be able to assess where colleges are spending tuition money.
As for the jubilee, says Professor Ross, 鈥渄ebts are rewritten and written off on Wall Street all the time, but when it comes to little people, they are not allowed to renegotiate the debt.鈥�
While radical shifts may not be realistic, even sober-minded financial observers suggest some changes may be in order. 鈥淚 don鈥檛 think we are headed for a total amnesty,鈥� says Mitchell Weiss, adjunct professor in economics and business at the University of Hartford in Connecticut. The law, he says, currently trims the time for most potential student indebtedness to 20 years, and 鈥淚 don鈥檛 see us cutting the time to 10 years鈥� (as proposed legislation calls for).
However, he thinks it鈥檚 quite possible to hold the interest rate for government student loans at 3.4 percent. The rate is set to double in July unless Congress acts.
It may help that this particular issue is one that Mr. Obama 鈥� and now GOP hopeful Mitt Romney 鈥� are campaigning on.
On Wednesday in Manhattan, street performers will enact mock trials of bankers, says Ross, who will be playing one of the lenders in a skit. 鈥淥nce the debtors are released, I鈥檓 not sure what our fates will be,鈥� he says with a laugh.
Other plans are also afoot for Wednesday. Groups such as Occupy Student Debt and a coalition pushing to pass the Student Loan Forgiveness Act of 2012 (HR 4170) plan to use the day to raise awareness, says Robert Applebaum, a lawyer behind the website www.hr4170.com, which officially launches Wednesday.
Mr. Applebaum鈥檚 personal stake in the debate is high 鈥� some $88,000 in loans, mostly from law school, he says. As he notes on the site, 鈥淚n 2010, total outstanding student loan debt exceeded total outstanding credit card debt in America for the first time ever.鈥�
Applebaum plans to hand-deliver to Congress a petition urging passage of HR 4170 as soon as he acquires 1 million signatures, which he says 鈥渟hould be soon.鈥� (He now has more than 900,000.) The law鈥檚 key item: reducing the period of a student鈥檚 total indebtedness to 10 years.
Student debt affects everyone, says fellow activist Kyle McCarthy, who helped launch occupystudentdebt.com last fall and who also has some $80,000 in loans. 鈥淭his debt is dragging down the entire economy,鈥� he says, because people cannot move forward with their lives. They can鈥檛 buy houses or cars, he says, adding, 鈥淚 have a friend who cannot marry because she defaulted on a student loan and her partner would inherit her credit, which has now been ruined.鈥�