Two days ago I reposted my attempt to get student loans forgiven back in 2011. CBS News did a story last night. I am a prophet. I dressed in a funny costume nd walked around Eugene like a crazy man. I rang a bell of warning. I tried to get students to sign a proclamation. Being a prophet is not easy. Folk want to hurt you and list to the President of Ten Thousand Lies. They think he I real. I was trying to help people. My neighbors depict me as a serial killer. I am their Scapegoat because they follow Satan THE DECIEVER who get people to lie for him and break the law. How – Biblical!
You can see the homeless camp that would Soon be Whoville. There I am at the second OCCUPY meeting, and at a march against the Iraq war warning people about the Putin, who is the old Soviet Union who prevented folks from having a victory over evil.
Here’s the definition of a prophet, that I would study, because you got one of these, but, you don’t have a President, a Democracy, and a Way to Vote Honestly. You have nothing with all these Lies and Liars! At least you know I am on your side. How about God?
Last Updated May 1, 2019 8:57 PM EDT
America’s college loan crisis comes to. But if you think it’s only a young person’s problem, think again. Many struggle to pay their monthly minimum, like Seraphina Galante, a 76-year-old social worker in San Diego.
“This is a mountain that I will never be able to climb. I am terrorized,” Galante said.
CBS News met Galante on the campus of San Diego State University, where she got her master’s degree 19 years ago. She still owes nearly $40,000. Galante is one of more than 3 million people over 60 still paying off college loans. Like her, many went back to improve their job prospects, while others are paying off loans for their kids or grandkids’ education.
“I was very confident that … I would pay it back, you know, in due time,” Galante said. “We grow older and then we get more senior. That’s reality of life.”
Yesterday I returned to the oak tree on the University of Oregon Campus where I posted my proclamation on November 15, 2010, wherein I suggest tax shelters for bank accounts in Switzerland and the Cayman Island be brought BACK TO AMERICA and be used to create a Student Bank that would give interest free loans to students. This was the planting of a grassroots movement that had countered the Tea Party Movement – as planned!
While visiting the place where my homeless friend, Hatoon, slept – in front of the UofO library, and Arab student asked if he could be in a photo with me. The Arab Spring, and the Liberty Tree Rebellion – meet!
I am standing in front of the museum where the day before Occupy Eugene made a camp. From here they moved to the Mill Race. I went there to say hello friends.
I then walked up and down 13th. Street, stopping to talk to students about my idea that our President has been putting forth.
It only takes one good man to change things, turn back the tide of ruin and despair!
NEW YORK — Compared to many of her unemployed classmates, Gabby Bladdick counts herself among the lucky ones.
Since graduating with a degree in public relations from Valparaiso University in December, Bladdick has landed a full-time job in her chosen field that even includes benefits.
But she’s quickly learning that $1,700 a month doesn’t stretch far, especially with student loan payments now due. Bladdick, who owes about $40,000, devotes more than a third of her salary — or $590 each month — toward paying them back.
“When I first started looking at colleges, I figured I’d take out loans and get a job and that it wouldn’t be that big of a deal,” said Bladdick, now 22. “But I had absolutely no idea how much of a burden $600 a month really is for a recent grad.”
Earlier today, President Obama announced a new program to help make higher education more affordable by helping current college students not only consolidate their loans, but lower their monthly payments.
Borrowers who graduate next year and in the years following will be eligible to consolidate their federal loans at a slightly lower interest rate.
Further, the plan also alters the existing income-based repayment program to allow graduates to pay 10 percent of their discretionary income over a period of 20 years — versus requiring enrollees to pay 15 percent of their discretionary income over a period of 25 years before any education-related debt can be forgiven.
While the new plan will help current college students who take out loans beginning in 2012, Obama’s plan fell short of providing relief to the millions of debt-strapped borrowers who already struggle to make their monthly loan payments.
“It’s a step in the right direction, but a lot of people who need the relief right now won’t be the ones who benefit,” said Mark Kantrowitz, who publishes the financial aid websites Fastweb.com and Finaid.org. “This plan doesn’t do anything for a majority of distressed borrowers. It only helps those still in school.”
Earlier today, during a speech about college affordability at the University of Colorado, Denver, Obama announced his plan while also highlighting the increasing cost of higher education.
“Over the past three decades, the cost of college has nearly tripled. And that is forcing you, forcing students, to take out more loans and rack up more debt,” Obama said. “Last year, graduates who took out loans left college owing an average of $24,000. Student loan debt has now surpassed credit card debt, for the first time ever.”
In addition to Obama’s plan to help future graduates better manage the issue of rising debt loads, the College Board also released its annual “Trends in College Pricing” report.
The report underscored the worsening issue of college affordability. It found that over the past three decades, average costs at four-year public universities have nearly quadrupled.
While the average public in-state tuition rates at four-year institutions are 8.3 percent higher than they were in 2010-2011, tuition and fees at private colleges and universities increased by 4.5 percent.
“While the price of college goes up every year, it’s very clear that public college prices are rising more rapidly than private college prices and that’s certainly related to the decline of state budgets,” said Sandy Baum, an economist at Skidmore College who co-authored the College Board’s report.
Kantrowitz sees today’s report as only the latest indication of the decreasing affordability of college for the average American.
“Everyone is struggling, not just to pay for college, but in all aspects of their lives,” said Kantrowitz, who highlighted that the rising cost of college occurs at a time when family income and starting salaries have largely stagnated over the past decade.
In the longer term, he sees future college students either graduating with thousands of dollars in additional debt, shifting their enrollment to less expensive colleges and subsequently graduating at lower rates — or simply foregoing the dream of a college education altogether.
Given the increasing cost of college, Matthew Segal, the 25-year-old founder of Our Time, a national membership organization for Americans under the age of 30, sees Obama’s plan as a hopeful first step in the right direction.
“More money in the pockets of cash-strapped young people already struggling to pay their rent and buy groceries is definitely a good thing,” said Segal, referring to the future changes in income-based repayment rates. “In a perfect world, this would also address the larger problem of why higher education is so expensive in the first place.”
It’s a question that Bladdick often ponders, especially at the start of each month when her loan payments are due.
Bladdick grew up in a middle class home in St. Louis. Her father is a real estate agent and her mother is a mail carrier.
In recent years, when her family fell on tough financial times, the sole burden of paying for college fell squarely on her shoulders. Still, she can’t help but feel frustrated by how quickly the rules have changed.
“I wouldn’t change having gone to college for anything,” said Bladdick, during her lunch break. “But it’s frustrating to hear that Obama’s new plan won’t really apply to us. We’re the people who went through college and graduated when the economy collapsed and these loans, they’re absolutely killing us.”
For twelve years I lived a block away from the UofO campus. Every year, they came, with their card tables and cookies, the Gleeful Banker Babes who set up on 13th. street, and gave away Credit Cards – with a free cookie!
“Just sign on the dotted line – and don’t tell your parents!”
Next to these Babes, were the Cell Phone Darlings – with more sweets!
“Just sign on the dotted line – and never call your parents from your new phone!”
Then – here come the Parking Meter Maids!
“Hello, Dad! Can you pay for my parking tickets for starters?”
By Ellen Brown
Among the demands of the Wall Street protesters is student debt forgiveness – a debt “jubilee”. Occupy Philly has a “Student Loan Jubilee Working Group”, and other groups are studying the issue. Commentators say debt forgiveness is impossible. Who would foot the bill?
There is one deep pocket that could pull it off – the Federal Reserve. In its first quantitative easing program (QE1), the Fed removed $1.3 trillion in toxic assets from the books of Wall Street banks. For QE4, it could remove $1 trillion in toxic debt from the backs of millions of students.
The economy would only be the better for it, as was shown by the
GI Bill, originally instituted in 1944 and which provided virtually free higher education for returning veterans, along with low-interest loans for housing and business. The GI Bill had a sevenfold return. It was one of the best investments congress ever made.
There are arguments against a complete student debt write-off, including that it would reward private universities that are already charging too much, and it would unfairly exclude other forms of debt from relief. But the point here is that it could be done, and it (or some similar form of consumer “jubilee”) would represent a significant stimulus to the economy.
Toxic student debt: the next “black swan”?
The Occupy Wall Street movement is heavily populated with students. Many without jobs, they are groaning under the impossible load of student debts that have been excluded from the usual consumer protections.
A whole generation of young people has been seduced into debt peonage by the promise of better jobs if they invest in higher education, only to find that the jobs are not there when they graduate. If they default on their loans, lenders can now jack up interest rates and fees, garnish wages, and destroy credit ratings; and the debts can no longer be discharged in bankruptcy.
Total US student debt has risen to $1 trillion – more than US credit card debt. Defaults are rising as well. According to Department of Education data, 8.8% of recipients of federal student loans defaulted in the 2010 financial year, up from 7% the previous year. With an anemic recovery from a severe recession and a difficult job market, the situation is expected to get worse.
The threat of massive student loan defaults requiring another taxpayer bailout has been called a systemic risk as serious as the bank failures that brought the US economy to the brink of collapse in 2008. To prevent another disaster like the one caused by the toxic debts on the books of Wall Street banks, we need to defuse the student debt bomb before it blows. But how?
The Federal Reserve could do it in the same way it defused the credit crisis of 2008: by aiming its fire hose of very-low-interest credit in the direction of the struggling student population. Since September 2008, the Fed has made trillions of dollars available to financial institutions at a fraction of 1% interest; and in audits since then, we’ve seen that the Fed is capable of coming up with any amount of money required or desired. To the Fed it is all just accounting entries, available with the stroke of a computer key.
The Fed is not allowed to lend to individuals directly, but it can buy Treasury securities; and with the Student Aid and Fiscal Responsibility Act (SAFRA) of March 2010, the Treasury is now formally in the business of student lending. The Fed can also buy asset-backed securities, including securitized student debt; and there is talk of another round of quantitative easing aimed at just that sort of asset.
After QE3: the market wants more
When the Federal Reserve’s expected “QE3” turned into the tepid and ineffectual “Operation Twist”, the stock market reacted by plummeting. To appease investors, Fed chairman Ben Bernanke then assured them that the Fed was “ready to do more”. How much more and in what way wasn’t specified; but Alan Blinder, former vice chairman of the Federal Reserve Board of Governors, suggested some possibilities. He wrote in the Wall Street Journal on September 28th:
To maintain the size of its balance sheet, the Fed has been reinvesting the proceeds in Treasurys. But starting “now” (the Fed’s word), and continuing indefinitely, those proceeds will be reinvested in agency bonds and MBS [mortgage-backed securities] instead. … A future round of quantitative easing (QE4?) that concentrates on private-sector securities like MBS, rather than on Treasurys, is now imaginable. … Indeed, if we indulge ourselves in a bit of blue-sky thinking, we can even imagine the Fed doing QEs in corporate bonds, syndicated loans, consumer receivables and so forth.
Syndicated consumer loans include asset-backed securities (ABS) of the sort purchased by the Fed through its Term Asset-backed Securities Loan Facility (TALF) created in November 2008. According to the Fed’s website, “Eligible collateral initially included US dollar-denominated ABS that … are backed by student loans, auto loans, credit card loans, and loans guaranteed by the Small Business Administration (SBA). …”
Buying securities backed by bundles of student loans thus falls within the Fed’s purview. Quantitative easing is a tool reserved for economic crises, and toxic student debt appears to be the next “black swan” on the horizon.
Buying up a trillion dollars in student loans could be a nice stimulus package for the economy. The money supply is estimated to have shrunk by about $3 trillion since the 2008 collapse of the “shadow” banking system (an array of non-bank financial institutions including investment banks, hedge funds, money market funds, structured investment vehicles, conduits, and monoline insurers). In July 2010, the New York Fed posted a staff report on its website titled “Shadow Banking”, showing that the shadow banking system had contracted by $4 trillion since its peak in March 2008, when it was valued at about $20 trillion – actually larger than the traditional banking system, which was then only about $12 trillion.
By July 2010, the shadow system was down to about $16 trillion and the traditional system was up to about $13 trillion, leaving a $3 trillion gap to be filled. Adding back a trillion dollars in student aid could go a long way toward curing this shortfall.
Debt relief as economic stimulus
What could such a stimulus do for the economy? Consider the GI Bill, which provided free technical training and educational support, along with government-subsidized loans and unemployment benefits, for nearly 16 million returning servicemen. Economists have determined that for every 1944 dollar invested, the country received approximately $7 in return, through increased economic productivity, consumer spending, and tax revenues.
The GI Bill not only made higher education accessible to all, but it created a nation of homeowners, new technology, new products, and new companies, with the Veterans Administration guaranteeing an estimated 53,000 business loans.
Eliminating, reducing or deferring student loan debt would free up the budgets of millions of students, allowing them to spend more on goods and services, increasing demand and creating jobs. More jobs would mean more taxes for the government, and a more educated and skilled work force would mean higher paying jobs in higher tax brackets.
What the economy sorely needs today is purchasing power. Without customers to buy their products, businesses cannot expand and cannot hire. And to get the needed purchasing power, consumers need more money in their pockets. Getting it there by quantitative easing has been branded dangerously inflationary, but with a $3 trillion hole in the money supply, we need an injection of new money today.
As long as the money is spent on goods and services rather than on financial money-making-money schemes, the result will not be inflationary. Retailers will just put in more orders for goods, causing producers to produce more and to hire more workers to do it. Supply will rise along with demand, keeping prices stable. Overall prices will not increase until the country hits full employment, which is far from where we are today.
Another alternative: interest-free student loans
Many countries offer free tuition for higher education, including Argentina, Brazil, Denmark, Finland, Greece, Norway, Scotland, and Sweden. Another program that has proven to be very fair and workable is a program of interest-free student loans. The government of New Zealand now offers 0% loans to New Zealand students, with repayment to be made from their income after they graduate. For the past 20 years, the Australian government has also successfully funded students by giving out what are in effect interest-free loans.
The loans in the Australian Higher Education Loan Programme (or HELP) do not bear interest, but the government gets back more than it lends because the principal is indexed to the Consumer Price Index (CPI), which goes up every year. The indexation rate was 2.8% in 2006 and 3.4% in 2007.
To avoid this increase, borrowers can make voluntary repayments, for which they also get a 10% reduction in the principal. Thus if a person voluntarily repays $1,000, the debt is reduced by $1,100. The loans are “contingent loans,” repaid only if and when the borrower’s income reaches a certain level. If the borrower dies, any compulsory repayment must be paid from his estate, but the remainder of the debt is canceled at death.
Following the Australian model, the Federal Reserve could buy up $1 trillion in US student debt, waive the interest, and collect on the principal only when the borrowers’ incomes reach a certain level. In the meantime, the loan money would circulate in the economy, stimulating economic activity.
Even assuming a 10% default rate, the Fed would get back $900 billion on its $1 trillion advance. The $100 billion difference is only one-seventh the bailout money authorized by congress to rescue Wall Street banks, and it would stimulate the economy more than the bailout money, which just shored up the balance sheets of insolvent Wall Street banks that then declined to return the favor by lending to Main Street.
If the Fed’s investment generated anything close to the returns from the GI Bill, its $100 billion outlay could produce a several-hundred-billion dollar return.
To prevent abuse of the system, colleges should be required to stay within certain well-defined parameters for providing affordable, high quality education; and students should meet well-defined standards as well.
Properly monitored, a federal investment in higher education can be a win-win-win, good for the economy, good for the government, and good for the people. A generous student loan program will create jobs, increase tax revenues, and give young people a fair shot at the American dream, a dream that has become a mirage for 99% of the population.