Tuesday, January 18, 2011

Preview Review of Default: the Student Loan Documentary

There is an illness afflicting our country.  It hits one of the most valuable and significant segments our populace, our intellectual seed crop - our students in colleges and universities, undergraduate and graduate, law and medical schools.  It punishes the students it hits with back-breaking financial obligations, which can and do afflict them for the rest of their lives.   I'm talking about student loans, and the way some of them are administered - the subject of this crucially important, new documentary, Default: the Student Loan Documentary, which will soon be shown on television.

As a Professor (of Communication and Media Studies) at Fordham University in New York City, I'm naturally always concerned about students and their future well being.   But this documentary makes vivid an abuse which, while tragically all too commonplace, is way out of the ordinary in its destructive effects.   Did you know, for example, 
  • that going into "forebearance" - getting a delay on when you as a student who has graduated must start repaying your loan - can result in astronomical increases in what you ultimately owe, to the tune of $20,000 borrowed requiring more than a $60,000 repayment?
  • that even a lawyer who landed a job in the Brooklyn DA's office has been driven to financial collapse because of usurious "forebearance" charges?
  • that even bankruptcy will not save you from loan repayment collectors?
That's right, even though these charges can drive the afflicted to bankruptcy, that will not get them off the hook.   Student loans can be recouped even from your Social Security payments, if you make it that far.   And the culprits are not just banks - according to this movie, Sallie Mae, the nation's biggest originator of student loans insured by our own Federal government, is a big part of this problem.

To be clear - of course loans should be repaid, if at all possible.  But life-destroying rates and the policies of some of the lenders to students are unconscionable, as well as deeply damaging of the future of our society.

I learned most of this in Default: the Student Loan Documentary.  Its air dates have not yet been established.   Keep your eyes out for it.   In the meantime, check the documentary's Facebook page.
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