Tuesday, January 6, 2009

I know, I know, this isn't supposed to be an activist's blog

...but I just can't seem to help myself. I promise to keep politics out of my blogging, and then I see something like this, something that would really really make a huge difference to me, my husband, and so many other people we know that I can't not blog about it. I promise my next post will be back on topic-or at least as on topic as I get ;)

I'm referring to the idea up for vote at change.org (a very cool site, incidentally) on forgiving student loans. The short version: please please pretty please with a catnip mouse on top consider taking a moment to vote for this idea. The top ten ideas from change.org will be presented to Obama's administration on January 16th, and I'm really hoping both this one and the CPSIA one that I blogged about several posts ago will make the cut.

The long version, for those who are bored, or curious, includes my reasons for supporting this idea below (but since I can't help but chat on about this one in depth, I thought I'd put the most important thing--the voting--up front).

My husband and I have a huge amount of loan debt--I won't name specific numbers because it would probably bother him if I did--but most of it comes from his undergrad, when he was forced to take out a lot of loans to get his BA because his financial status was being judged based on his father's income--which was fairly high at the time--and thus he couldn't qualify for need-based funding. The problem was that his father wasn't actually paying for any of my husband's schooling, and the college he was attending was too small to have much in the way of student work programs (those it did have were reserved for those who had been judged to merit need-based aid) and too difficult, academically, to manage working and taking classes at the same time (the school only allowed full time enrollment).

Once he graduated, he became a journalist--a job he was perfectly designed for, but which unfortunately didn't pay very much (newspaper reporters never made much, even before the decline of the industry), so though he was paying his loans back he was doing so at a fairly slow rate. Then the newspaper industry started failing (it's only hitting public consciousness now, but it began around 2003) and he was laid off. He applied for newspaper jobs all over the place but could find none, and he'd been doing it for 5 years and the job skills didn't exactly translate into another career.

Since then, he's taken more part time jobs than I can name without boring everyone with the length of the list, but has had no luck in securing lasting full time employment despite trying very hard to find it. In the meantime, I've been in school, getting first my MA and now my PhD; I've been getting funding, but not enough not to need to take out a few loans of my own. Consequently, our monthly income is such that we qualify to make much smaller than normal payments on his student loans, which is very nice--except those payments are entirely interest, without any principal. Thus for most of the last 4 years we've been scraping by and paying what we can while never actually decreasing our debt owed.

This seems incredibly messed up to me. Yes, I understand that one's word is one's bond, and that if you agree to something you are responsible for fulfilling your agreement. At the same time, if you are found to be making a strong effort to uphold your end of the bargain and are unable to because of circumstances outside your realm of control (i.e. the economic mess we're all in currently), it seems morally offensive to me that the contract wouldn't be renegotiated in a way that is fair and reasonable for everyone. It's not that I think my husband and I should be let off scott-free from our debts (though that would certainly be nice, I won't lie), but that I think it does no-one any good--the government, the loan companies, nor those in debt--to be trapped in a fairly unbreakable cycle of perpetual payment without actual debt reduction.

One of the elements of the idea up for vote at change.org is the idea of forgiving the interest on student loans, and that seems reasonable to me, especially given all the loans that are being covered by the fed for various banks, etc. Yes, there is such a thing as living by a set of principles--but practicality has to factor into life as well (as we all know all too well, I'm sure), and practically speaking forcing individuals to uphold their debt responsibilities while forgiving large corporations of theirs doesn't seem like a solution, since it will require individual consumer confidence to get us out of this mess, and that confidence is pretty hard to attain when under a mountain of debt with no clear way through it.

Of course, I'm not an economist, so perhaps I'm getting this wrong. I certainly welcome discussion of the idea, regardless of whether you agree or disagree. In the meantime, I'll get off my soapbox.

And, like I said, I promise the next post will have something to do with handmade, cats, or both :)

5 bits of commenty goodness:

Lux said... 1/7/09, 12:44 AM

My mom works at a university and she knows so many people with unbelievable student loans - one of them is older than my mom (okay, Mom's 56, or will be). How is this ex-coworker of hers ever going to be able to retire when she barely gets by as it is? Scary.

PurrPrints said... 1/7/09, 12:55 AM

I know...I dread even thinking about that...

Mishkat said... 1/7/09, 10:19 AM

I am conflicted about this because I work at a state university and we are already stretched to the limit on funding (people are getting laid off; no new hires, etc.) I imagine you think about this too if you're working on your Ph.D! However, I don't understand the process enough to know how student loans benefit the actual college or university (I went to a community college for two years to save money on tuition, and then was fortunate enough to go to a state school back in the day when you could actually get grants for tuition if you were really poor...).

I'm also afraid something like this would cut down on the number of new student loans - and I think education is really important.

But I did read the proposal and some of the comments and I'm shocked at how high the interest is on student loans. I'm really sorry you and your husband are in this situation! It was difficult for me to find a job after I left school too, and I have a supposedly "practical" degree - so I can only imagine.

JMHO, as always :)

PurrPrints said... 1/8/09, 2:26 PM

Interesting point Katie--my understanding is that it isn;'t schools who front the loans, it's the fed itself, or banks, depending on which kind of loan it is--at least that's the kinds of loans we have. I wasn't thinking about whether there might be some school-fronted loans--if those do exist then yes, i could see how that would have a negative impact on higher ed.

I guess mostly I'm just frustrated that banks are getting bailed out to try to address our credit freeze but they're just sitting on the money that's been given to them and nothign is unfreezing, thus people's spending ability still hasn't been freed up. It seems that if people's monthly budget got a smidge more room in it it might do a better job freeing up the flow of money--but again, I'm not an economist, so it's not as if I have expertise backing up my opinions--just too much time thinking about this stuff and discussing it with my political junkie husband :)

Mishkat said... 1/8/09, 3:32 PM

Yeah, after I thought about it, I realized that schools already had the money - it was the banks who held the loans (can you tell my degree is NOT in economics?!) Any negative impact on higher education would come from banks refusing to give new student loans.

That said, I know there are supposed "schools" that I call student loan factories (some "technical institutes" and similar places - there are often ads for them on TV). They purport to train people for jobs, but the training is often relatively worthless - they exist mostly to make money, and because it has been relatively easy to get student loans. It wouldn't bother me if these places got shut down - I think they take money from people under false pretenses.

I actually think forgiving interest on student loans is a good idea - or at least reducing it to a manageable rate. There is nothing more depressing than paying interest only - you can do that forever! I think people might feel some hope if they saw the actual balance they owed being reduced.

And re the comment you left on my blog about consumerism - I just don't see art as a "consumable" :) "Life is short but art is long."