A word from John Gear

John Gear is an attorney in Salem, Oregon.  I’ve met him, he’s a good guy.   Back in 2011, he quoted a letter I’d written to the newspaper about student loans.  Here is his blog entry, referencing my letter.  I think he does an excellent job in expressing why the current laws need to be changed.

More on the Gangster known as “Sallie”

Sallie Mae that is.  An excellent link dropped in one of the comments to this letter to the editor in the Statesman-Journal (text below).

There is not a week that goes by that I don’t see people who found out that, when they weren’t even old enough to buy a beer, they signed up for a lifetime of outrageous above-market interest rates and backbreaking fees, all courtesy of the student loan-sharks who are not taking any risk on student loans, since the government guarantee eliminates the risk!  This is the kind of legalized piracy that threatens our nation’s future — oppressing people following the conventional wisdom (“Get an education”) is like pouring gasoline all over the barn floor and lighting matches randomly.  Every year the debt tsunami floods out more and more young– and now middle aged people — who have been carrying these absurd loans for years and still wind up facing bigger balances than ever.  This is highly toxic stuff for a democracy.

I spoke at the recent town hall meeting with Rep. Kurt Schrader about how consumer protections need to be restored to student loans.

If you get in over your head with credit cards, you can get a fresh start with bankruptcy. If you can’t afford your home, you can give it back to the bank. Student loans are the only loan that it is impossible to get out from under when you can’t afford to pay them.

Lenders can garnish wages, pensions or disability payments. You can be forced to pay no matter how low your income or whether you are old or disabled.

After I spoke at the meeting, two member of the audience turned around in their chairs and thanked me for my comments. Another asked to read my notes.

These laws really need to be changed. There is no protection for consumers who could not find better jobs and afford to pay off their debt.   — Jessica Hopkins, Salem

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Student loans vs. Being an Indentured Servant

A friend gave me the idea for this post.  Here’s a definition of indentured servant from Simple English Wikipedia:

“An indentured servant was a worker in a contract with an employer for a certain length of time. Usually a laborer or craftsman would have to work three to seven years[1] in exchange for the cost of transportation across the ocean, food, clothing, land, a place to live and other things they needed to live or work during their contract. This kind of contract was called “indenture.” Indentures were quite common in Colonial America in the 17th and 18th centuries.”

While being an indentured servant could involve very tough, sometimes dangerous work, it was only for a limited time.  Once the three to seven years was up, the person was free to go on with their life.

Contrast this with today’s student loans in America.  The choices are: high payments (these are sometimes mortgage sized or larger) for ten years or slightly lower payments for twenty five years.  In my case, I couldn’t afford any of the payment plans, including the so-called Income Based Repayment plan.  With current law, the student loan lenders can garnish paychecks or Social Security if you don’t come up with the amount they are demanding.  So I was forced to start pleading for money online, or face the possibility of homelessness once my savings ran out.  So it’s pay up or else!  For twenty-five years.  Which in my case, would be until I am eighty five years old, or dead, whichever comes first.  Never mind that I couldn’t find a better job.  Never mind that because I was a single parent for years, I wasn’t able to save nearly enough for emergencies or retirement, which is looming.  It’s come up with the money or else!  One friend, looking at a letter showing me paying thousands every year until advanced old age expressed it well.  He said, “This isn’t a payment plan.  It’s slavery!”

I’d have been better off as an indentured servant.  At least there would be an end to it.