Default: The Student Loan Documentary

“Can I get married? Can I honestly have children, because of a loan? And you know I don’t feel like I can do that.”  Those were some of the first words I heard when I was recently given access to screen the 27-minute Default: The Student Loan Documentary. The movie chronicles the stories of student loan borrowers from all different backgrounds and the issues facing them and the student loan industry. Recently, I wrote an article here about President Obama’s newest change to the federal student loan program. As I said, there is also the issue of the many students who had to take out private loans, which are unaffected by the new changes.

The issue of student debt and default is very well on its way to being the housing bubble crisis of our generation. The student loan issue has hit lower-income families hardest, or families who can’t afford to send their kids to college. It used to be that Pell Grants covered around 3/4 of the cost of college, today it’s around 1/3. That usually means that more private loans with high interest rates must be taken out by those from lower-income households where parents cannot help them cover the costs. Lower-income students aren’t the only ones relying on private student loans these days – many from middle class families are using private loans to help obtain a college education. This debt is extremely oppressive to those who get swallowed up in it, but we must start to fight back. Hit the jump to tell us YOUR story…

Posted by:

Justin Burkhardt

The End of The “College Industry”?

This semester, I’m not in school. I’ve almost completed my degree but like so many other Americans, I’m taking some time off to step out into the “real world” and make the money that will get me through the rest of school. It’s not a surprise. College costs – both public and private – have been skyrocketing, often outpacing the cost of living by 200%. Basically, for every new dollar earned, college costs go up two.

But colleges aren’t the ones making bank here – the lenders are. And they push so successfully on profit measures that students wind up paying down their debt for decades. But check it: right now, there’s a measure in the House to push private companies out of the college loan business for good, expanding the government’s direct loan program as well as boosting the Pell Grant.

I’m a big fan of the almighty P.G.; the Pell Grant has saved my ass for the past few years. Without the Pell Grant, I wouldn’t be able to afford school at all. But even now, the Pell Grant – which were my two favorite words in the English Language – isn’t enough. Even though I won’t see the positive effects of this bill during my years as a student, it’s a welcome and necessary change to the financing of higher education.

But questions still remain and there are many loose ends.

Is this measure enough? And is it a sustainable way to curb college costs?

Many believe that rather than simply reacting to bad lending practices, we need to proactively get to the root of why college costs are increasing so dramatically and rebuild educational financing from the ground up. Others believe that these privatized companies are the root of the problem and when they are taken out of the equation, the ‘system will right itself’.

And a few believe that students can live on ramen and beer alone, so screw ‘em.

What do you think?

Posted by:

Steve Romain