Student Loan Consolidation: Eliminate Them!

I started my student loan discussion by asking virtual friends about their opinions, which quickly spun out into a separate student loan debt entry. The more I started to think about it, the angrier I started to get.

I remember applying for student loans and being nervous about getting turned down. Sorry, but I grew up in the middle class – neither poor nor rich enough to afford a higher education that might keep me from being poorer and potentially help me find financial success. But the idea of student Financial Aid always pissed me off. I was bitter, depressed, and most importantly: offended.

It’s not right that we charge our citizens (of any age) to become a productive member of our society. It’s just… not… right. I’m not saying that education doesn’t cost money, but it’s no wonder why kids today see no hope for their own future – knowing FULL WELL that to get to the future, they’ll need to do the very thing they’ve been told by their elders not to do: climb into debt.

…what the hell kind of lesson is that? Oh, I’ll tell you what kind of lesson it is. It’s student loan corruption, at the highest levels:

America isn’t going to find salvation in charging its people to make America better – period, end of f’ing story. This isn’t about being conservative or liberal, Democrat or Republican… it’s about abandoning the institutions which have already abandoned their constituents. Rather, the institutions which have already begun to serve a completely different kind of constituent.

Student loans? Hell, this country should’ve paid *ME* to go to college.

20 thoughts on “Student Loan Consolidation: Eliminate Them!”

  1. Sorry, Chris, but I think you’re not thinking this one all the way through. Student loans are NOT on par with “consumer debt.” They are heavily subsidized already, offer tax incentives, and ridiculously low interest rates for the average graduate. I work in a Financial Aid office for a private university, and the majority of our students have a mixed bag of public & private loans that help to pay for what their merit-based scholarships would not cover. Higher education isn’t cheap, and it shouldn’t be – much less should it be free. The actual out-of-pocket cost is lower per student under the current system than if we followed Denmark’s example and made all college tuition “free” i.e. tax-payer subsidized. Once “everyone” is paying for college expenses, “no one” has enough incentive left to make sure the costs are kept reasonable and that the educators remain accountable. College is a worthwhile investment, the cost of which insures that those who decide to go also recognize the responsibility that comes with the decision. I think we do our students no good service to remove yet another layer of responsibility from their shoulders.

  2. As pleasant as it might feel to make education “free” by hiding the costs among all taxpayers, we simply can’t revoke the laws of economics to achieve this warm, fuzzy feeling. Colleges have limited space for students. It must ration its services. Demand will drive the costs. With subsidized loans and grants, the rationing is distorted further. Since schools have limited space, subsidies drive prices up for all.

    With grants, generally based on “need”, we divide college students into poor and rich. The middle gets stuck because they’re not eligible for such “free” aid, but they can’t easily afford the tuition that is driven up by rationing limited spaces. More rationing must occur because we suggest that everyone should go to college.

    The solution is not further subsidies. Some students shouldn’t go to college. I’m not placing a judgment on intellect, although some honest assessment of that matters. Instead, we need to understand that not all careers require a degree and not all adults want a college degree. Some people should and will get a degree, but aren’t ready immediately after high school. The problem is that one solution can’t be devised to meet every person’s individual need. Again, economic laws can’t be revoked.

    Perhaps a year or two between high school and college would be good for some people, if they can’t afford college immediately. They’ll learn what it’s like to work, they’ll have more time to figure out what they want to do, and they can save some money.

    If we must talk reform, and we should, focusing on the way we pretend we can ignore economics is a place to start. Success isn’t a right to be guaranteed by taxpayers, but even if it was, simple economics show that government can’t provide it.

    (After that, I’d focus on how we infantilize young adults, which might be the primary problem, anyway. For example, at 18, I was independent, providing for my own education. Yet, my mother had to take on 40% of the loans for my education.)

  3. Good points all, in many countries, education, including college is free.

    One thing about student loans many don’t know is they are not discharageble by anything but death.

    That includes debilitating long-term illness and bankruptcy. You can do a bk but you will still owe the student loan.

  4. “America isn’t going to find salvation in charging its people to make America better – period, end of f’ing story. This isn’t about being conservative or liberal, Democrat or Republican… it’s about abandoning the institutions which have already abandoned their constituents. Rather, the institutions which have already begun to serve a completely different kind of constituent. Student loans? Hell, this country should’ve paid *ME* to go to college.”

    Why stop there? Should AMerica give you a house, a job, and a car, too?

    Have you ever stopped to consider why college is so expensive? Has it occurred to you that the guaranteed floor of loan payments props up an incredible amount of waste in the education industry?

    Have you asked yourself what college would cost if Universities had to deal with market rates instead of artificial floors?

    Or would you instead like to increase your tax burden (and, based on my reading of your blog), be utterly stunned by your taxes going up?

  5. I must have missed the Amendment that made a college education a full-blown Right.

    I’m also bothered by the (perhaps unintentionally) condescending tone that implies people without a college education are nonproductive and doomed to live in squalor.

  6. America isn’t going to find salvation in charging its people to make America better

    They’re not paying to make America better, they’re paying to make themselves better.

    It’s not right that we charge our citizens (of any age) to become a productive member of our society.

    You can be a productive person without being a college graduate. But if you want to be more productive (improve yourself), why shouldn’t you pay? You’re the one receiving the benefit, why shouldn’t you bear the costs?

    Hell, this country should’ve paid *ME* to go to college.

    That implies that other people receive more benefit from your education than you do. Or that they owe you a debt.

  7. Chris – I grew up in the same situation as you. I had student loans and I paid them off and I am thankful I had them. The interest rates were reasonable in my opinion. If anything, student loans are the reason millions of students get a college education. It is a burden that they bear, but I would argue it’s well worth it. I finished mine in less than 5 years, but if it took 10 years it would still have been worth it.

    Having something handed to you, without having to pay back, yield much worse results. It’s human nature.

  8. Chris,

    I just finished reading “Boomsday” by Christopher Buckley. Go read it. The book will not address the student loan issue specifically (it focuses more on social security), but the analogies are there and you’ll at least laugh out loud about it (until, that is, you get your monthly loan payment invoice).

  9. I simply want to know…How or with who do I apply for amnesty on my student loan in Lou. Ky? On the internet I get everything except WHAT TO DO or HOW TO DO. Please can you direct me to the right program. Thank you.

  10. One thing about student loans many don’t know is they are not discharageble by anything but death.

    That includes debilitating long-term illness and bankruptcy. You can do a bk but you will still owe the student loan.

    ACTUALLY what many people don’t know is that a student loan IS dischargable by death. You just have to apply with the Dept. Of Ed and submit a death certificate. I work for a student loan consolidation company and there are a lot of loopholes to student loans that people don’t know about. In some circumstances you can have a loan discharged by bankruptcy. I have seen both of these situations occur. In addition I agree with the argument that states we teach our children to NOT go into debt them force them into it with the idea of a college education. However, eliminating the student loan industry also elimates hundreds of thousands of jobs for many people all over the country. Is that really the best solution or our economy.

  11. There are at least 3 good reasons to consolidate all your debt with home equity:

    1. Lower interest rate. As compare to other loan, home equity loan is comparatively much lower that other loans, which make it easier to be paid off. If you continue repay the same amount you pay now and the interest rate has been lower, meaning that you pay more toward the principal and making your debt to be paid off faster.

    2. The interest of your home equity loan is tax-deductible; you save on interest pay for home equity loan from the tax-deduction.

    3. Lower monthly payment. If you find hardship repaying your current debt repayment, then selecting longer repayment term with a home equity loan will help to lower the monthly payment so a level that is affordable by your current financial situation. Be aware that by taking long period of loan term, you will be paying more in total interest.

  12. Interest rates are supposedly low for student loans, but mine are almost 9%. I feel like I’m being crushed.

  13. 9 percent, u think you got it bad? I just found out student loans I thought were taken care of in 94 bankrutcy are still growing and that I’m looking at a wage garnishment!

    Im hal a paycheck away from being bankrupt again, paying off several loans and the state (2 accounts) that I got while I was out of work for a year. 1/3rd of my check is gone before I get a dime of it. Now they want
    to cut it again.

    Ive been researching on the internet and what I have found is down right criminal. The government is as much to blame as anyone for this stuff.
    We need HELP! And im not living high off the hogg. Ive got a 15 yer old car, that I cannot afford to replace. And I at least have a full time job.

    With the interest growing faster than I can pay, I will never be able to pay off the principal. If it were just that, I might some day see the light at the end of this ttunnel.

    But even if I get the “income based payment” plan, 25 years from now, I will be 70. These things are nearly 20 years old!

    Well, there goes my hopes of being able to retire.. Now I know why some students just give up and others take the final round out (If ya know what I mean,- suicide)
    .

  14. Hey Mac,
    I fee really bad for you.
    Suicide is not the answer. Look-did you read the post from the lady who said she settled for half of what she owed after owing for 20 years. You can do the same. Just call them up and arrange something. Don’t let the garnish your wages once that happens it seems to never end. VEAP ran out before I finished undergrad. Didn’t have the GI Bill. But, what I am looking for is someone to assist a disabled vet with paying off over one-hundred thousand in student loans.

  15. I agreed with Vet-N-Debt. All you have to do is put an extra effort on finding appropriate resources that provides information about student loan consolidation. In addition, you will find extensive information on leading student loan consolidation to help you on your way to success.

    Wish u luck Mac..

  16. consolidating the loans will also become easier to manage and pay off. Once the loans are consolidated, you can retain your right for forbearance as well as for deferment.

  17.  Students can consolidate all of the loans taken throughout their education right into a single bulk and begin repaying them in a single rate of interest. This method also locks the eye in the current rate. Yet, a student continues to have … There are several sites online claiming they are able to eliminate student education loans. But students should be intelligent enough to see the small print. Within those lines it’s explained, though not clearly, that loans can’t be …

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