Instead of delving into the testimony from each of the witnesses who testified on Panel I and Panel II at the House Judiciary Subcommittee hearing last week, I want to focus on a few points from the written testimony that highlight the severity of this situation. Moreover, an eloquent post by a new connection, Mr. Blair, on my previous piece about this hearing warrants attention in the second part of this discussion. Based upon the significance of his comments vis-a-vis my own initial and now settled thoughts about this hearing, it precludes me from carrying out the analysis I had planned on doing. In a word, Mr. Blair's comments made me realize the pointlessness of providing the reader with a point by point discussion on the content of each person's testimony. Nevertheless, here's a quick list of the witnesses who testified (for those of you who wish to read their written testimony, their names serve as hyperlinks to those documents):
Panel I
Panel II
(b) Rafael I. Pardo, Associate Professor of Law Seattle University School of Law
(c) J. Douglas Cuthbertson, Attorney at Miles & Stockbridge, P.C
(d) Brett Weiss, Joseph, Greenwald & Laake, P.A.
Ms. Asher and Mr. Weiss were the strongest witnesses. Both were poised and able to relay the most disturbing information, along with substantial statistics, to the Subcommittee (the empty chairs on that end, by the way, was disheartening). One of the most disturbing pieces of evidence came from Mr. Weiss's testimonial document. Prior to reading this document, I had - naively - assumed that one could escape private student loan debt through death. It seems in certain instances that that isn't even a way out! In a portion of his document that discusses the way in which courts have similar "restrictive standards to co-borrowers" (this topic of co-signers also came up, and it clearly overwhelmed Congressman Cohen), Mr.Weiss explained, "We recently heard a particularly poignant experience from a co-borrower looking for solutions:"
"Heather from St. Petersburg, FL (in her own words)
I co-signed for my boyfriend's loans so that he could go to school to become a pilot. When he signed up with the school, they only had 2 banks they wants us to to get loans through (Wachovia or Sallie Mae and only one that was accessible from their web site (Wachovia) were he was supposed to sign up for the loan. So he ended getting a private loan from Wachovia (which is backed by TERI) instead of a federal loan, although I am not sure what the difference is. Unfortunately, he passed away a couple of weeks before his training was complete. Now the loan deferment period is coming to an end and obviously they want their money. I've done outreach to see what my options are and it's not looking very promising . . . They also sent a letter, addressed to him, stating that the loans don't offer a death discharge [my emphasis] . . . . I understand that I am responsible for paying these loans since I did co-sign for them, it just doesn't make sense for me to pay the entire loan amount when I got nothing from didn't even get to go for a ride!"
I realize it's hyperbolic to claim that one cannot escape their loans via death. But why is it not possible for a company like this one to at least re-negotiate the terms of this debt? It's also amazing that a company can be so brazenly cruel and send a letter addressed to the widow's dead husband.
There are also examples of how they criticize people for having had children. Again, Mr. Weiss's document explains this type of situation. A borrower seeking to reclaim some semblance of a life was accused of being reckless for making a personal decision to have a family. Weiss continues:
"Creditors have presented a wide range of aggressive arguments to discredit borrowers' testimony about hardship. In one recent case, creditors aggressively questioned a woman about why she had children [my emphasis] after she took out student loans if she was not going to be able to afford both children and loans. In this case, the creditor's counsel got the borrower to acknowledge that she had borne all of her children after she took out the loans. He then asked her if her children had been 'planned' to which she responded that she was Catholic. Counsel then dropped the subject until closing argument, at that time referring to her religious choice. Counsel said that 'you have to make the decision to have a family in light of what you can afford."
I won't even get into the story about an aspirant who can't take a vow of poverty until she's paid off her student loan debt! (Rest assured, supporters, I've already been in touch with Ms. Torres - the aspirant - and told her about the Forgive Student Loan Debt Movement).
Why have so many people in this country been put in such a shameful financial situation? Why are so many of them struggling to just make ends meet? Even worse, why does it seem that no one seems to give a damn?
I have some other questions I'd liked answered:
(a) Why did the House wait until after the proverbial train had left the station to hold a student loan bankruptcy hearing?
(b) It is is my understanding too that the Senate is trying to keep Senator Sherrod Brown's debt swap bill from being considered. Why is that?
(c) Why are both of these bills just about putting a cap on the riches the lenders receive, and aren't doing a damned thing to address the existing debt problems from which we're all struggling?
(d) Finally, I wrote on behalf of one particular student who was clearly misled by her university.
When she stepped foot on her campus as a freshman with a clean academic record, the Financial Aid Office had her take out the wrong loans. I'm almost certain of it. I wrote to Sec. Arne Duncan, to the Attorney General of her state, to President Obama, etc. I haven't heard one thing. Nothing. I think that her case alone warrants some sort of official investigation into possible wrongdoing at the school she attended. So why hasn't anyone responded? Why are we all being forgotten here? Have we not raised our voices enough? Where's that so-called "change" we can believe in?
When she stepped foot on her campus as a freshman with a clean academic record, the Financial Aid Office had her take out the wrong loans. I'm almost certain of it. I wrote to Sec. Arne Duncan, to the Attorney General of her state, to President Obama, etc. I haven't heard one thing. Nothing. I think that her case alone warrants some sort of official investigation into possible wrongdoing at the school she attended. So why hasn't anyone responded? Why are we all being forgotten here? Have we not raised our voices enough? Where's that so-called "change" we can believe in?
The little that has been done on the Hill is too little and perhaps too late for millions of Americans struggling with student loan debt. Some of the Representatives who happened to attend this hearing struck me as . . . to put it bluntly . . . painfully out of touch, and so unaware of what it means to be a struggling professional today that they made me dream of being in a place of power that would allow me to draft legislation that would actually mean something for people who are caught in this student lending crisis . . . It also made me think about the stark division between baby boomers and the generations who have come after them. (Mind you, I'm speaking thematically by the way. I'm aware that there are a large number of people who are described as baby boomers who support our cause).
I will defer to the eloquence of Mr. Blair to make this final point. After I posted the first part of this discussion, Mr. Blair wrote in response:
"Excellent report, and very encouraging. Thank you!
I believe very much in your statement regarding advanced degrees hurting ex-grad students in the current job market.
In America large corporations thru small businesses value people that they can subjugate
more than they do people who possess critical thinking skills. Companies want someone
who is programmable, not someone who wants to learn and excel, or improve the organization for which they work. This attitude is contrary to best management practices (see learning organizations - Peter M. Senge).
We (recent graduate students - irrespective of age [my emphasis]) paid to gain those skills which are abrasive to incumbent baby-boomers who want nothing more than to retire fat and happy, just like they were planning to retire before they lost all their money in risky investments. But now they must "work" longer to retire at the same level they had planned. Now the baby-boomers are in fierce competition with themselves, and others outside of their demographic, to 1. keep their jobs, 2. do as little work as possible, 3. make as much money as possible before they retire.
So, our generation(s) must now bear the weight of having to compete with a glut of older workers who are in many ways obsolete in their productivity by default of an unwillingness to learn from younger people who they may consider to be a threat to their positions of authority (and perceived superiority). We must also pay back our over speculated student debt.
We recent graduates of more advanced degrees who are younger seek innovation and efficiency out of a real economic necessity; to pay back our student loans in a timely equitable manner. We also seek the leverage to take our own risks with our own ventures, just like the baby-boomers have. Right now with a disproportionate burden of debt we cannot pay off more quickly we do not have the freedom to organize and innovate, particularly for start-up type ventures. This hurts America. We need the leverage to take risks to innovate. Right now we can only follow orders; orders which are leading us in a direction of dilution, without a clear vision for the future. Let them put our money back into our mouths where it belongs. We've over-speculated on the value of our student loans because of promises of a chance of higher wages which are less likely to obtain."
We (recent graduate students - irrespective of age [my emphasis]) paid to gain those skills which are abrasive to incumbent baby-boomers who want nothing more than to retire fat and happy, just like they were planning to retire before they lost all their money in risky investments. But now they must "work" longer to retire at the same level they had planned. Now the baby-boomers are in fierce competition with themselves, and others outside of their demographic, to 1. keep their jobs, 2. do as little work as possible, 3. make as much money as possible before they retire.
So, our generation(s) must now bear the weight of having to compete with a glut of older workers who are in many ways obsolete in their productivity by default of an unwillingness to learn from younger people who they may consider to be a threat to their positions of authority (and perceived superiority). We must also pay back our over speculated student debt.
We recent graduates of more advanced degrees who are younger seek innovation and efficiency out of a real economic necessity; to pay back our student loans in a timely equitable manner. We also seek the leverage to take our own risks with our own ventures, just like the baby-boomers have. Right now with a disproportionate burden of debt we cannot pay off more quickly we do not have the freedom to organize and innovate, particularly for start-up type ventures. This hurts America. We need the leverage to take risks to innovate. Right now we can only follow orders; orders which are leading us in a direction of dilution, without a clear vision for the future. Let them put our money back into our mouths where it belongs. We've over-speculated on the value of our student loans because of promises of a chance of higher wages which are less likely to obtain."
While I am inclined to believe that what we're seeing is a type of internecine warfare between those in the middle-class, Mr. Blair's remarks about a generational struggle have persuaded me to rethink my original beliefs (i.e., that the crisis resembles an internal type of class struggle). Regardless of theoretical speculation and which one makes more sense, we're all finding ourselves in a desperate collective situation. When you begin to receive emails from college grads telling you, "Thanks for your help! I have a college degree and just went on food stamps today!" you know this problem is serious and that it's not going away.
Try as they might to ignore us and this serious issue, the student lending crisis is here to stay. Allowing for private loans to be discharged in bankruptcy is, as Mr. Applebaum put bluntly, "like putting a band aid on a gunshot wound."
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