Student loan
consequences: real, costly and personal
New American – Bob Adelmann –
1/29/2013
It’s now nearly a decade
since his graduation. His debt, with interest compounded upon interest, is
$142,000 at a 17-percent interest rate. He can’t get out:
I get my groceries at the
local food bank. I have sold or lost 99 percent of everything I ever owned.
He can’t get work because
his bad credit turns off prospective employers. He lives in an aged minivan,
relies on the Salvation Army for meals, and parks his van at highway truck
stops. For all intents and purposes, he is homeless.
Solutions abound, at least
in theory. The government should get out of the student loan business
altogether and let the private market take over. And Congress should allow
students to declare bankruptcy over their loans when necessary. Even there,
however, the consequences are towering. There is more than $1 trillion in
student loan debt. Almost 15 percent of loans are already in default. The
Department of Education would have to receive special funding from Congress —
the taxpayer — to be able to write off the bad loans that would result.
The costs of college
education would rise to more normal, market-driven levels, keeping some
qualified students away. Colleges and universities would have to make massive,
perhaps draconian, cuts in their overhead. It would take years for some
semblance of balance between supply and demand to return to the education
industry. And changing the laws would have precious little immediate impact on
people such as Keith.
Restoring freedom through
private markets, however, is worth the effort despite the pain. The alternative
— a continuing debtors’ prison for students and a continuing of the corrupt
educational cartel and its incestuous relationship with politicians — is
unthinkable.
Northwoods Patriots - Standing up for Faith, Family, Country - northwoodspatriotscomm@gmail.com
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