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Letters: Student loans and Occupy Wall Street
Letters in a computer with red mailbox flag
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Kai Ryssdal: There's no actual list of demands from the people at Occupy Wall Street. Their manifesto that came out last month just has a list of things they're against -- one of which is high and rising student debt.
We used that the other day as a way to get into a commentary earlier this week about whether the government should forgive that debt. Justin Wolfers said no, but Dina Gachman from Los Angeles said even a bit of loan forgiveness goes a long, long way.
Dina Gachman: If companies like Sallie Mae could possibly forgive at least a portion of the interest, especially if people are laid off or unemployed, having trouble looking for a job, to forgive even a portion of the interest would be a huge help to a lot of us out there who can't even afford health insurance, let alone paying off our monthly loans.
James Vineyard from Dallas said that's a bad idea.
James Vineyard: If we forgive a bunch of student loan debt, private lenders are going to be much more hesitant about making student loans in the future, fearing it will happen again. This could lead to fewer people being able to get a loan and afford a college education.
We've been discussing Occupy Wall Street quite a bit this week. And judging by our inbox, satisfying absolutely no one. Richard Johnson wrote from New York to say our characterization of the protests was just wrong.
Richard Johnston: I was there yesterday and I can tell you the crowd was mainly middle-class, normal, non-funky, non-counterculture, not unreformed hippies. They were average people who are simply fed up with the status quo and the egregious imbalances that have developed in our society in the last 30 years; and they are starting to speak up.
Keep sending us your comments, especially if you don't like what we're doing.
The predicament that we're in began with institutions being irresponsible and now OWS wants people to not have to pay their student loan obligations? HYPOCRITES. Does OWS really hate bailouts or are they mad they didn't get one? Those of us who've lived within our means, who received an Associates instead of a Bachelors because that's what we could afford, we're tired of fixing the lives of people who over extended. TAKE RESPONSIBILITY FOR YOUR OWN OBLIGATIONS. OWS is beginning to sound like a bunch of spoiled brats who don't want to pay their bills.
Given that short trader Steve Eisman recently identified the student loan market (a securitized commodity) as his prediction for the next investment bubble (out of the mouths of Wall Street traders), it doesn’t seem too extreme to imagine that student loan debt might be forgiven; in fact, it seems outrageous to me that students should be required to scrape together whatever is required, doing whatever is required, to meet the demands of financiers, and particularly when bankruptcy laws were changed in ’05 to make it more difficult for any debt to be discharged. Forgiven (discharged) debt is not debt that is entirely left for taxpayers to assume; it is also debt that investors will lose out on. It is only when lobbyists successfully convince Congress, the Fed, and Treasury that we must bailout high finance without limit (legally or not) that taxpayers get entirely screwed (as with the $85 billion bailout of AIG). Forgiving student loan debt, AND changing the law to make student loans dischargeable in bankruptcy, would not only restore fairness to the system and relieve students of unsustainable burdens, it would also smarten up the banking/securitization/student loan/secondary education market and make all involved in the industry more responsible and accountable. What we have now is another investor-led, “risk distribution†business model like subprime, less the recourse to bankruptcy.
How can you justify student loan forgive? Let us take two students out of high school: One decides not to go to college and starts working immedeately. The other goes to college and gets a degree and enjoys college. Now you are telling tax payers need to bailout the second guy who went college? What kind of logic is this?
