At a gathering last week in a public atrium a few blocks from the square that is home to the “Occupy Wall Street” encampment, New York University Professor Andrew Ross lead a discussion about the burden of student loan debt -- now estimated to be between $550 billion and $829 billon -- and proposed a radical solution: “A Pledge of Refusal.” The idea is that protesters to sign a pledge to stop making payments on their student loans as soon as they had gathered 1 million signatures.
Robert Applebaum, a 37-year-old lawyer who graduated from Fordham Law School in New York City
Appelbaum’s idea was born out of his own debt experiences. He said he began championing loan forgiveness after going to work as an assistant district attorney in Brooklyn and realizing he could either pay his rent or make his payments on his student loans. He said he chose to put his loans in “forbearance” — an agreement between the lender and the borrower that prevents a declaration of default but doesn’t prevent the continued accrual of interest — until he left the DA’s office in 2004.” After making his loan payments every month since then, his debt today stands at $88,000, so obviously he is not doing so well in the repayment.
“I welcome the ‘Occupy’ protests,” Applebaum said. “I think it’s long overdue and I think it’s wonderful that people are finally learning to speak up against the raping and pillaging of our country for the last 30 years. No other issue really highlights how badly that’s been done to the middle class than the issue of student debt.”
“Approximately 65 percent of students graduating after four years with a bachelor’s degree in 2007-2008 had some debt,” according to FinAid.org. The median cumulative debt for those graduating with a bachelor’s degree was about $20,000 in 2007-08 — but up to 10 percent graduated with $40,000 or more in debt, it said. Obama’s 2011 plan was brought on by continuing economic problems for persons seeking to go to college or trying to repay current debts. Furthermore, because of continuing higher education finance issues, President Obama will make the lower monthly payments under the new income-based repayment plan available to borrowers in 2012 instead of 2014. Unfortunately, the new plan will not be available to all borrowers (FinAid.org, 2011).
The group debated the idea and tossed out alternative solutions like insisting on “reasonable” tuition, abolishing for-profit schools, reforming the current system or even setting up an escrow account for students to pay into until the system is reformed. There was consensus on one issue: When one person asked if the group considered education to be a “right” or a “privilege,” there was a wave of “twinkle” hand gestures from the crowd (an upwards wiggling of fingers) to show that they agreed education was a “right.”
The overall financing situation seems to be affecting future generations in their journey toward postsecondary education. For example, loan defaults and problems paying for loans can result in termination of future loans. If you lost financial aid eligibility because you defaulted on your federal student loans, you will need to rehabilitate the loans according to the FinAid organization. This involves making a number of full voluntary on-time monthly payments on the loans. Furthermore, after you have made six consecutive voluntary on-time monthly payments you will regain eligibility for federal student aid. Furthermore, if you make 9 out of 10 consecutive voluntary on-time monthly payments, the default will be removed from your credit history.
Cahill, P. (10/26/2011). “Another idea for student loan debt: make it go away.” Retrieved October 26, 2011 from http://www.msnbc.msn.com/id/45040659/ns/us_news-life/2011-10-26T10:35:16
Cantrowitz, M. (10/26/2011). “The Student loan proposal.” FinAid.org. Retrieved October 27, 2011 from http://thechoice.blogs.nytimes.com/tag/finaidorg/.
