I’m certainly not opposed to student loan reform. The economic game has changed, and you can’t reliably assume that you will progressively make increasing amounts of money throughout your lifetime as long as you stay off drugs, stay thin and avoid illness. Now, even if you do manage the previous three, you still may wind up using your degree to get people who do make more money than you half-caff lattes with extra foam ((C’mon, you have a degree – which does promote you beyond asking about fries with that.)).
That said, I’m curious as to why it’s added as a rider to the healthcare reform rather than having its own bill. While I’m impressed that something relevant to me and possibly useful to the economy is going through, I’d like to know a lot more about it, and as a student loan debtor myself, I would like a few goodies for me in there somewhere.
I’ve found very little about this out there.
Here’s the salient quote from Slate.com – and I know the site slants, but I’m not entirely sure which way the parallelogram lies with them.
“Tucked inside the House-passed reconciliation bill (which won’t become law until the Senate passes it too) is a second reform bill, this one concerning the student loan program. This second bill completes a reform, begun in the first year of the Clinton administration, to eliminate the wasteful subsidizing of private banks in the granting of government loans to college students. If you haven’t heard anything about it, that’s because its “socialistic” premise that the government can lend its own money more efficiently without a middle man has stirred controversy only among the middle men themselves and their friends in Congress.”
You can read the full post here. I have already benefited from Clinton’s switch to Federal Direct lending, and I encourage all other student loan debtors who are able to also move their loans directly to the federal government. If you can, always choose the Income Contingent repayment.
I think removing student loan lending power from private banks is a good thing in the long run; at the time I was college age there was a certain cultural strong-arming into college education that forced most of us to start out our official adult lives in serious debt and without proper health insurance. While indirect, I suspect that the marriage rates will drop for awhile after all this goes into effect – but so will the divorce rates. Less people will need the security of a family unit when starting their lives as adults and consequently will get marriage right on the first try because they’ll finally have the time to stop and figure it out, grow up, get heads out of asses and so on.
Still, I want to know more about this. How will my student loans be affected? Will they not be? Will standard payment lower? How will deferment and forbearance work now?
Also, one situation I ran into: I paid for school myself, and I wound up maxing my student loans. Were it not for a private supplemental lender, I would not have the bachelor’s degree that I have never used directly. Still, I’m glad I finished college – it was the only way to know for sure that there is no such thing as a complete education. This applies to all subjects, ever.
Will those private loans be barred? Mine was predatory, and I truly had no other options at the time because state residency laws had changed and my mother had once again dinked with my voter’s registration without my permission ((I got stuck paying income taxes for Indiana and Minnesota because of parental financial and political screwing around with my life. As far as I’m concerned, my mother still owes me the back taxes since she caused the problem.)). This prevented me from getting state residency without a marriage license, and also prevented me from getting the much easier Wisconsin residency, so I could not attend UW-Madison, the school I actually wanted to attend. I’m not sure I ever explained this to my family – they were really petulant and creepy about me going to Minnesota, and I received no indication any of it was out of concern for me. ((Mostly I think they just wanted me stuck at that place that was never my home so they had someone to dump work on. Despite only having two children my mother never got past the farm-work mentality that kids are basically household appliances, especially youngest children.))
Admittedly most college students these days and even then stayed a lot closer to home, but even those who like me who drifted further away from their families still received more support than I did, if not financially then emotionally. My situation was pretty extreme, and despite my best efforts it did haunt me in my professional life for a long time after I graduated. While my father did do what he could under the radar to support me, materially I was completely on my own and without the basics I needed to truly support myself. As it is, I’m approaching 35 with only a little over $100 stashed back for retirement, looking at a future with no Social Security and emergency savings only by the grace of a husband who does not fully understand his own privilege.
And oh yes, boy howdy, do I still have student loans to pay.
While there are unique emotional elements to my situation, I know I’m far from alone here. After credit card debt, health bills and mortgages a lot of people hold up student loans as what stands between them and saving for their future. So really, I want to know how this is going to change my life.