Is there a student debt Crisis?!?

Is student debt a crisis or not? That is a very good question! A good way to answer this question is to focus on Statistics. First, of the 20 million Americans that attend college, 60% of them borrow money to help pay for costs. There are about 37 million people with outstanding student debt. This means they are not making payments on their loans due to being enrolled in school still or cannot afford to pay. 14% of people with outstanding debt cannot afford to pay back their student loans. There is about $85 billion in pass due amounts of debt. Two out of 5 borrows become delinquent at some point in the first 5 years. These numbers are terrifying. Over half of college students are borrowing money. This is a large number and it continues to rise. As that number increases so does the amount of people with outstanding student debt. $85 billion dollars is money that could be used for other things, but instead it is just a balance that may never be paid back.

Now, why are students struggling to pay back their student loans? They are going to graduate and get a job in their chosen field and pay back loans immediately. Sounds perfect in theory, but it doesn’t happen that way. There are several different reasons why students are struggling to pay back their student debt. 48% of 25-34 year olds struggle due to being unemployed or under-employed. 52% of students believe their financial situation is fair. 70% of students claim that it is more difficult to make ends meet than the previous four years. 42% of students have other forms of personal debt that they must pay off as well. Based on these statistics, I think that most students are under-employed or unemployed. The job market is rather difficult right now. Often those that go into a career after college are forced to go into a different field due to a lack of jobs. Regardless, if you can pay or not the Federal government wants their money back. This is an epidemic in the making and it will soon burst. The government needs to learn like bank and businesses have learned. You cannot give out money on credit because it will continue to increase. When people are paying back at a slower rate than they are borrowing, then the system is going to crash. People should focus more on this crisis and not dismiss it. Students need help or student debt can create the next recession or worse…depression! Think about it!

Occupy Student Debt

While searching the net to learn more about the student debt crisis, I came across an interesting website. This website discussed a new movement that is starting to sweep our nation. It is called “Occupy Student Debt.” I had to go and figure out more about this. I have only heard about the Occupy Wall St. Movement. I decided to do more research on this movement and investigate. They participate in strikes and also support others that deal with this cause. The movement has four different beliefs/principles that they are trying to get across to the public. The first principle is for public higher educations to be tuition free. They feel this would be the greatest step to relieve student debt. If college is free then you don’t have to take out loans to pay for college. To cover the cost of this would be to end Bushes Tax cuts or to cut the wasteful spending at the pentagon. The second principle is to have zero interest student loans. They feel that student loans are not consumer loans therefore they should not be consumer credit debt. They feel that students are being extorted with such high interest rates. They are paying a vast amount of money, but lenders know that students cannot pay it back anytime soon.  The third principle is that private colleges should open their books. Students at private and for-profit universities should know where their money is going. This places run off of student loans, but experience a tax-free lifestyle. People should be more aware and allowed to see what these colleges and universities are doing with the money given to them. The last principle is to have student debt written off completely.  Debt has been accumulating for decades and students are being humiliated. It would be better to just erase their student debt. It is also tipping the scales at over a trillion dollars.

They even have a debtor’s pledge for people to sign.

Sign The Student Debtors’ Pledge of Refusal

As members of the most indebted generations in history, we pledge to stop making student loan payments after one million of us have signed this pledge.

Student loan debt, soon to top $1 trillion, is poisoning the pursuit of higher education. With chronic underemployment likely for decades to come, we will carry an intolerable burden into the future. The time has come to refuse this debt load. Debt distorts our educational priorities and severely limits our life options.

Education is not a commodity and it should not be a vehicle for generating debt, or profit for banks. Education at all levels –pre- K through Ph.D. — is a right and a public good.

* We believe the federal government should cover the cost of tuition at public colleges and universities.

* We believe that any student loan should be interest-free.

* We believe that private and for-profit colleges and universities, which are largely financed through student debt, should open their books.

*We believe that the current student debt load should be written off.

In acknowledgment of these beliefs, I am signing the Debtors’ Pledge of Refusal.

 

This is an interesting movement. I must do more investigation to get a better understanding. I agree with some of their principles. They are focusing on the students in this nation, which have often been ignored. Not everyone is born with a silver spoon. They do not have the luxury of having their parents pay for college. Often colleges take advantage of their students. They offer classes only at certain times that can hinder a student. This can make them graduate must later and allow the university to get rich off of their students. This movement would allow an equal playing field and allow everyone to get a college education.

Do Students Need A Bailout?!?

Do students really need a bailout? Many people around the United States think this. According to Robert Davis, other students do not think that students need to be bailed out. Mr. Davis is a master’s student that is attending Virginia Tech. He writes an article about the H.R. 4170 bill and the student debt crisis also. He believes that this bill is too good to be true. He feels that the bill has good intentions, but they aren’t helping the situation. He feels that students may become free riders. He gave an example of the banks and how they needed the help of the American people to bail them out. They in turn became freedom riders. They may do this because he feels that people are self-interested and self-motivated. The article mentions that students would need a third party to help bail them out of their debt situation. The burden would then leave students and fall on the American people or the taxpayers.

He states that Americans would be forced to participate in this because they can either save students or deal with a possible second depression. These are two extremes and no happy median for people. The article then discusses two different types of students. The first kind is the “party students.” They go to keggers, parties and graduate with a “social” degree. This is a degree in just being social and nothing more than that. He mentions that students tend to go abroad which costs money or major in areas that have very little job opportunities for them.  The second kind of student is the ones that are there to get an education. Focusing all of these elements he called it a recipe for disaster. This doesn’t add up because students are graduating in debt. He believes that students need to take responsibility for their actions and their decisions. They need to assess their risks and actions and be prepared to deal with the consequences. He feels that students shouldn’t expect a bailout when things go sour. He doesn’t want the debt to be pushed on his fellow Americans. He feels that we should focus more on the rising cost of college and not the student debt part. He feels that people are the blame for their actions.

This article has an interesting perspective, but there are a vast amount of counter arguments that can prove this argument wrong. I understand his prospective and his points. I just think that he over generalizes. There are many different types of students that have no choice, but to apply for student loans. In our society, education is the needed in order to better yourself financially, economically and socially. He seems to only focus on the aspect of bailing out party students that make bad decisions. I know that actions have consequences. Sometimes those actions are necessary so that people can better their life situations. This bill could help inner city kids have a chance to afford college and not go due to the fact that they cannot afford this. Instead of focusing on the party students, he should focus on the students that will use this bill to help them give back financially. According to the bill, tax payers aren’t the ones that would be bailing out students. Instead, the money that will be generated after we end a war on foreign land will pay for student debts. This is just one solution that can help the problem. Mr. Davis should focus on that. Students may not need a bailout, but they need a solution. Not everyone is priviledged and have parents that can afford to send them in college. Sometimes, you need assistance which can either help or hurt you. Loans are hurting students and soon the entire economy will find out just how bad.

Obama’s View on Student Debt

Next month, several people will be heading to the polls to vote for who they want as president. I figured this would be a good time to do some research on the candidates and their platforms. The issue that I of course wanted to focus on is their ideas of getting rid of student debt. At first I was going to go to each candidate’s website, but then I remembered in my political sciences classes that I should try something else. I went to a third party website to get the facts. Democrats tend to value higher education and want everyone to have an educational opportunity. Democrats have taken on student loans by dealing with banks to reform the program. They increased Pell grants and did the American Opportunity Tax Credit. Obama plans to make higher education institutions keep their tuition down. In order to do this, he is willing to reduce their federal aid until they comply with having lowering their tuition costs. He wants to increase federal work-study and reform the student loan system. He wants to help minorities in school so that the workforce can be more diverse. He also focuses on community colleges which tend to often be overlooked. They are considered just a stepping stone to a four year college and no one really pays attention to them.

Presidents have often ignored the student debt crisis. Most people still view college as a privilege and if you go there, you must deal with the financial circumstances. College shouldn’t be a lap of luxury when it is deemed mediocre when you have just your bachelor’s degree. There must be more focus on education, but especially higher education. Students will be the leaders of tomorrow and if they are swimming in debt, how can they lead? I like his ideas on education, but more has to be done to fix this problem. It isn’t going to just go away. It will rise and rise and cause a catastrophic recession or worse, a great depression. Think about that as you go to the polls. Education is key and now the question is how to not make education be the reason why our country fails.

 

My money covers what?!?!?

Now that I have been blogging for several weeks, I think it is time to narrow down potential topics for my proposal. I have discussed student debt, rise in tuition costs, and a potential solution. Now, I am going to focus on what exactly your money pays for. I am sure that you or your parents have read your Ebill for Longwood University and thought… “What the hell is my money paying for?” Well, I am on your side Longwood Students! I did some research and tried to figure out more about where your money goes.

At Longwood University, there are certain fees that you must pay and tuition. In state students pay $204 dollars per credit hour. Out of state student pay $592 dollars per credit hour. This is already showing a significant difference for those that are in state and out of state. I understand why they do this, but out of state students already have a burden placed upon them. Longwood also has some fees that need to be paid. First, there is a comprehensive fee. This fee covers, safety initiatives, building repair/maintenance, Campus beautification/Grounds maintenance, Student Health and Wellness Services, LCVA, FAB, Athletics, Student Union/ Programming and various other services. This costs $151 per credit hour. There is the Student Activity Fee is an administrative fee that covers student organization costs. This is $6 per credit hour. There is a registration fee, which is $2 per credit hour. This is a fee for signing up for classes on mylongwood. Other fees are just for out of state students, those that take an online class, internship fees, science lab fees, and other various fees.

Now this is rather expensive already and it doesn’t include room and board and meal plans. Room and Board ranges from $2,762 to $3,907 dollars. Meal plans vary in prices as well. Adding up all of these is very high and is only going to increase. I think that this is not right. College is supposed to help people achieve the American dream. It is supposed to put people on an equal playing field. When it comes to college, many people tend to go for the bigger name schools. The prices to attend those schools are even greater. With all of this in mind, is there any question to why students end up in debt. You apply for school get in, pick classes, and then get hit with so many hidden fees and ways that the school wants your money. This is a problem that looks like it isn’t stopping anytime soon.

Longwood’s tuition is considered to be on the lower end of the spectrum, but it is still expensive. There are still schools that have much higher costs than ours. There must be a solution because our money is going into hidden fees and places we may not want to support. So, next time you read your bill for the Spring semester, think about where exactly your money is going to.

H.R. 4170

Could there be a solution to end the Student Debt Crisis? On March 8th, 2012, Representative Hansen Clarke introduced the Student Loan Forgiveness Act or H.R. 4170. I’m very skeptical of this solution, so I figured it would be smart to do some investigating.  What is the purpose of this bill? H.R. 4170 wants to help relieve students of their student debt so that they can have greater control over their financial earnings. This could potentially cause an increase in entrepreneurship and demands for goods and services across our nation. In order to help relieve debt, there must be an amendment to the Higher Education Act of 1965. This bill wants to create the “10-10 standard.” This means that if you make payments equal to 10% of your discretionary income for 10 years, then your remaining federal debt will be forgiven. Now if you are already making payments on your student loans, then the “10-10 standard” would apply to you as well. It would just be less than 10 years and money already paid would county towards loan forgiveness.

The 10-10 standard can help ease the mentality of being in debt forever. It can help people see that in 10 years there will be a light at the end of the tunnel. To pay off your debt for 10 years at a smaller percentage can help you keep more money in your wallet and not be struggling as much. This can boost and stimulate the economy, which is needed at this time. Most of the people in the age group that stimulates the economy the most are the ones in debt.  This bill would also cap government interest rates at 3.4% and it would allow existing borrows whose student debts are more than their income to break free from private loan rates and have them change into federal direct loans. This would allow them to enter the 10/10 program and have a chance at relief. It would reward graduates that enter a public service profession. There is a cap at 45,520 on the forgiveness loan.

This bill could be a great solution to this crisis. Student debt continues to increase and no one seems to notice that it is a problem. Student debt has surpassed credit card debt and is continuing to rise. This is scary because credit card debt is meant to be the scariest debt of them all. Instead, it is being challenged by an invincible opponent. Not even bankruptcy can destroy student debt.  As debt continues to rise they aren’t being paid off quickly. Borrows stay in the negative and accrue more and more interest. This bill will be financed the money that will be saved from the Iraq and Afghanistan Overseas Contingency Operations and not affect t any other existing student aid programs. It is good to know that it won’t harm other programs that were created to aid students. Before today I never heard anything about this bill. I felt the need to do more investigating on this bill. There is currently a movement amongst students and followers about getting this bill passed. It is currently being held hostage by a committee in Congress and needs help to escape. Could this be the solution to ease our financial burdens? Let’s hope that this bill passes.

You Can Run, but You Can’t Hide from the Student Debt Monster!!??!!

This is what students have on their shoulders

Hey, you! Blog Reader, did you know that you can try and run from student debt, but you cannot hide from it? Did you know that debt collectors are using your inability to pay to their advantage? Everyone knows that America is considered the land of opportunity and possibilities. Similar to Andrew Carnegie, everyone wants their own rags to riches story. College is the perfect opportunity to transcend your economic status. This opportunity if far from perfect, instead it is a double edge sword. The glorious side is this sword is that you gain a college education and can use that education in the “real world.” The darker side of the sword is that you graduate with a substantial amount of debt that has accumulated.

Debt collectors are taking full advantage of the darker side of college. As former college students continue to struggle with paying back their loans, Student debt collectors are steadily increasing. According to Debt collectors are cashing in on student loans , about 1 in 6 borrowers end up defaulting on their loans and about 5.9 million people are at least 12 months behind on their loan payments. Right now there is about $76 billion dollars is defaulted loans. There is an unknown side of student debt that very little people know about. More students are borrowing money from the Federal Government than private lenders. Students don’t realize that the federal government is going to get their money back because they a variety of tools at their disposal. . The government is able to get $.80 cents per dollar compared to the $.20 cents per dollar for defaulted Credit Cards.

Now the big question! How do they get $.60 more cents per dollar more than credit card debt? The Federal government has the power to seize your tax refunds at the beginning of every year and garnish your paychecks. They allow different options to pay back your student loans which may appear glamorous, but they are all just a trap. Your credit will end up ruined before you even get a chance to grow roots in the “real world.” The government loves to give out student loans to students because they know they will never disappear. If you think that filing for bankruptcy will help this burden disappear then you are far from right. Good luck students on never loosing that ball and chain.

This article terrifies me because all of these facts are true. I will have to repay my student debt and I don’t like the feeling of never being relieved of them. Just be wary that student debt will never go away. Instead it is an avalanche that takes four years to create! Just when you think you are finally at the bottom of the mountain the avalanche of debt and life creates a road block. We will have to face our burden head on and deal with it and the debt collectors that are eager to call.

College Costs is on the Rise!

Did you know that the cost of college education is on the rise once again? Did you know that it is estimated to reach 6 figures by the year 2025 four years of college will cost over $80,000? Did you know that college loans are at an all time high? After High School, several students and parents consider college the next step in life. They have no idea about the dark side of college that is lurking just around the corner. Each year thousands of students embark on a journey to college in order to get an education, but is a degree worth it?

In “College Costs out of Control Forbes takes a deeper at the rising costs of college students. Education is considered to be “the great” equalizer amongst Americans. Education has the power to allow people to transcend their socio-economic status and become something greater then they imagined. The article focuses on the relationship between wealth and education. If you only have a High School diploma then you are least likely to be a CEO and make 6figures a year, instead you get less than the average salary. This creates a correlation between wealth and education. The higher the education you achieve the higher wealth shall be achieved. This concept has been around for several decades and is still prominent in our society.

This article also brings an emphasis on inflation. Inflation is one of the main reasons why tuition continues to rise and soar. It has risen 500% of the past decades. This is why your parents all way say, “When I went to school, it was cheaper!” This is because it was. Inflation has driven the cost of college to increase up to 7% per year. This number may seem low, but in retrospect 7% can be a hundreds of dollars per academic year or semester. Why is college so expensive? The answer is… us! More students are attending universities due to the economy. There are other reasons why students are attending college more than ever. Americans are no longer working on farms with their parents and working in factories doing service jobs. To accommodate this rise in college students, colleges have increased their tuition costs. The higher the tuition then less students can attend and the school can afford to have large number of students attend.

The cost of college is outrageous and something needs to be done about it. College increase prices to accommodate and what do the students get…DEBT! In May I am graduating college and I am graduating with more than just a degree. Over my time at Longwood, I have accumulated student debt. Is there any way that students can be relieved of debt? Are we just doomed to pay the price for wanting to better ourselves? Graduating in debt is a scary thing because my life hasn’t begun and I am in the negative. I don’t understand why people consider debt to be a “normal” thing. It is burden placed on students in a time when a job is not guaranteed right after graduation. Four years or more of hard work and all you have is a piece of paper and a negative bank account. I want to investigate this problem further, I hope there is a solution to this growling problem.

http://www.youtube.com/watch?v=IfNGae9bI0g

Hello world!

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Introduction

Hello world, I am Destiney Jones! This is my first blog intoducing myself to the world. I’m a senior and a Political Science major. In this blog we were told to focus on issues. After thinking about it, I have finally decided what issue I should focus on. The community I am going to focus on is the academic community. One thing that greatly affects college students and often causes stress is the growing cost of higher education. This blog will further explore the reasons behind this and help others to learn more about the growing costs.