An inappropriate relationship with Sallie Mae

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I’ve read far too much of this and this and this lately, and I’m furious.

The upshot of it all is that while young Americans are getting way over their heads in student loan debt, while they’re mortgaging their future for education, they see a financial aid counselor at the school. The counselor that they talk to when they’re on their way to taking on this tremendous personal unsecured debt, the person they confide in with their most intimate financial details, just might not be their friend. Many financial aid representatives are getting scandalous kickbacks from the banks.

Is anyone on the side of the college student?

Of course there are the parents, but mom and dad are already borrowing heavily from their retirement funds and mortgaging their homes so their child can go to school. The cost of the education is going far beyond what the middle class American family can afford.

Here are some of the facts, thanks to Anya Kamenetz:

Nearly two-thirds of our nation’s college students are now borrowing to pay for school.

There’s no official figure, the numbers are hard to track, but the average student loan debt for graduates in 2004/2005 was as high as $23,485.

Credit card companies aggressively market to students, with rates of 20 to 30 percent.

Tuition at public colleges went up four times more than the medium family income in the 1990s.

When people graduate with a four-year degree, often they realize that they will not be making enough money to pay off their loans, so they go back to school.

In 2002, graduate student debt burden was over $24,000 for master’s degree holders and over $100,000 for law and medical students.

In the PCUSA, seminarians now accrue $32,959 in debt.

Young Americans are in an excruciating position, with the convergence of staggering student loans, high rents, unobtainable mortgages, and stagnant wages.

When I’ve spoken to higher education officials about this, they say that the students simply need to have more personal responsibility. Well, many students are 16 when they apply for college and 17 when they enter as freshmen. Do we really expect students to understand the full ramifications of their loans as teenagers? Can’t we do better? As a society, shouldn’t we be looking after the least of these?

I must say, it’s difficult. Most of us are concerned for the “real poverty,” the homeless and the hungry. We’re concerned about the war in Iraq. We’re concerned about the atrocities in Sudan. We’re concerned about the environment. We’re concerned about Palestine and Israel. Our concern runs out when it comes to the less pressing issues of the economic injustice toward our young middle class.

But while we’re not looking, our society increasingly heaps more and more financial stress on people in their 20s and 30s.

Our churches can start talking about these things. We can begin to understand the issues and how they affect the young adults in our congregations and the young clergy who are leading them.

We must begin fighting for economic justice for young adults. After all, someone’s got to take the side of the students.

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4 thoughts on “An inappropriate relationship with Sallie Mae

  1. I would question whether they are middle class with those debt to income ratios. It sounds like they are quickly becoming an underclass. Isn’t there a lot more in the Bible about the sin of bad loan practices than homosexuality?

  2. This is a source of a lot of anxiety for my wife and me. She has her Master’s Degree and I am one year from (God willing) finishing my MDiv, and I’d kill for dept that was only in the $30,000 range. Ours is more than twice than that, with a year still to go. The frightening thing is that, even with our education before we moved out here so I could return to school, with the economy in northeast OH we couldn’t afford to support ourselves, even with her working two jobs and me pulling overtime every week. So coming out here to accrue more debt still seemed like the best bet, even though it really looks terrible on paper.

    What people don’t realize is that wages increase around 1%, inflation is about 2-3%, and undergraduate tuition has been rising about 13% per year since the mid 90’s. Even in my four years of undergrad, when I started it was around 25k and when I graduated, the entering class was looking at 30K.

    It’s got nothing to do with personal responsibility, or very little, I think. It has to do with the fact that a Bachelor’s is now a minimum for entry in most careers. It is the equivalent of what a high school diploma was a generation or two ago, except that a high school diploma is free to the student. I honestly think we’re looking at a system that is aimed at collapse. I just hope it isn’t too sever when it comes.

  3. Brian, you’re right. Bad usury makes a bad society. That’s pretty clear in the Bible.

    Doug, I’m afraid of a collapse as well. The individual responsibilty argument makes no sense in our current situation. My husband and I worked eight jobs and lived frugally through seminary and still came out with a load of debt. (On the personal responsibility note, have you ever read Whose Freedom by George Lakoff? It’s pendantic and boring in style, but very interesting in concept…)

    The 30k figure includes people who didn’t draw out any loans at all. And it doesn’t include undergrad debt or the debt of a spouse. The Board of Pensions started a debt forgiveness program which helped my husband and I a lot. Definitely look into it. They used to just give it to small church pastors, so you might even want to factor it in the call process.

    Good luck! I’m glad you came by. Your site is great. I read it all the time.

  4. ::blush::

    I’m actually looking at the debt forgiveness program, not the least because I think I’ll be well-suited to a small congregation. I’m used to churches with about 200 members at the most, and I’m interested in administrating as little as possible (though I’m sure everyone probably says that and gets sucked into responsibility anyway…)

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