18 hole golf course and the student debt!
Total outstanding student loan debt in America is expected to exceed $1.4 TRILLION this year. Millions of hardworking, taxpaying, educated Americans are being crushed under the weight of their educational debts, while the economy continues to sputter. Companies such as Sallie Mae are destroying our higher education system, our democracy, and the lives of millions.
The ever-growing student debt crisis will never be solved as long as those whose duty is to protect the taxpayers are in the pocket of the nation’s largest student loan company.
I’m sharing a real story below from a studentdebcrisis.com user
Justin Smith, Orlando, Florida
I come from small town USA, population 250 or something close to that. I’ve always aspired for bigger and better things. I took a very unique route with my grade 7–12 education, homeschooling myself for the majority of those years. Immediately after getting my high school diploma (a day after I turned 16), I started working retail. Boy did that suck. I worked retail about a year and I decided I’d had enough. I have always been passionate about music and business so it was a no brainier for me, I needed to go to Full Sail. I obviously didn’t come from money so private loans were pretty much my only hope. I had to borrow nearly $110,000 in private loans and my monthly payments are now nearly $1200, and that’s not counting my federal loans, which are almost paid off (were only a few thousand dollars). What’s sad about this picture is that $110k will compound and turn into almost $400,000 by Sallie Mae’s projected pay off date. This led me to the realization that student loans were designed to keep us inratinged to the system. Let young people borrow large amounts of money for an education that could otherwise be obtained for FREE on the internet (self research, self study, just like my homeschooling from grades 7–12). I am now forever inratinged to the system, still living on ramen noodles and trying to build a successful business on my own with no help. I can’t take out more loans because the student loan rating destroyed my credit rating… I have no one to help me take make it financially possible. I understand, it was my choice to go to college, I didn’t have to go. But if I hadn’t, I would have never left small town USA and I would have never been in an environment where my skills and talents are in high demand. My student loan rating has perpetuated into more financial problems in other areas of my life. Although I was immediately employed after graduating from college, I have been living paycheck to paycheck with student loans that take up over a third of my monthly income. I was unable to pay the IRS (as I was a 1099 sub contractor), so now I owe the IRS about $40,000 that I can’t afford to pay them. The hole just keeps getting deeper and deeper. I’m still fighting to get above the water but it feels like there’s no end in sight. It seems our government takes care of people who can’t help themselves (EBT, welfare, minority grants, etc) and screws people who are actually productive and actively contributing to society. It should be the other way around, the active and productive people should get the assistance they need and the counter productive leaches should get NOTHING. This is just my story, I’m sure it resonates with many others. I hope we are able to make way with the student loan forgiveness act, but doesn’t seem like it’s going to happen any time soon.
The whole idea of student loan program was to provide a way for poor minorities so forth to get them away to go to college and loans were administrated largely by the Federal government banks but in the late 1990s through the privatization of Sallie Mae they turned over this extremely important function largely to the private banks, financial institutions and private equity companies. Sallie Mae not just issued bonds but more importantly they privatized delinquent loans collectors.
After the privatization Sallie Mae CEO Albert Lord made so much money that he build his own private golf course in Southern Maryland near Annapolis so he and his buddies could play golf. Under Albert Lord, Sallie Mae paid colleges to drop out of the federal program and make Sallie Mae the loan provider. It put their own employees in university call centers as if the students were getting advice from college loan officers. It lavished exotic trips on college financial officers. It even paid a New Jersey agency $15 million to steer business to Sallie Mae. Needless to say, the Department of Education didn’t have a budget to entertain college aid officials with free cruises on the Potomac River.
It didn’t matter that their terms sucked compared to the direct loan program. It didn’t matter that interest could skyrocket if you missed a payment. The direct loan program never stood a chance. Lord retired in 2013. The following year, Sallie Mae spun off most of its student loan business into a new company, Navient. Fast forwarding to 2017, the newly appointed Secretary of Education Betsy DeVos contracted Navient to processes and service education loans on behalf of the U.S. Department of Education.
To-date the company has been charged with:
- Harming servicemembers including ruining their credit scores due to clerical errors.
- Steering borrowers away from lower monthly payments by directing them toward forbearance instead of federal loan repayment options.
- Miscommunication and failure to communicate vital deadlines that impact borrower’s bottom line.
- Misapplied payments that lead to late charges and more fees incurred to student loan borrowers.
President Lyndon B. Johnson signed the Higher Education Act of 1965, he hoped federal scholarships and loans would make college possible for everyone. “This nation could never rest,” he said, “while the door to knowledge remained closed to any American.”
If you are burdened with thousands or tens of thousands in student debt, and can’t find employment, I just wanted you to assure you that Wall Street is making very good use of your money :)
| May 18, 2018
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