Groups Say Forgiving Student Loan Debt Would Boost Economy

Student Loan Girl — Thu, 26 Mar 2009 00:16:00 GMT

As student loan debt continues to rise — jumping to $20,098 per graduating student loan borrower in 2007 from $18,796 in 2006 — and employment prospects continue to worsen, college graduates are experiencing greater difficulty repaying their student loans, and some of them have said enough is enough, BusinessWeek reports ("Asking for Student Loan Forgiveness,” March 24, 2009).

In 2008, borrowers fell behind on nearly $131 billion in private student loan payments, according to FinAid.org. There were $544 billion in federal student loans left outstanding for the fiscal year 2009, up from $502 billion in 2008, the U.S. Department of Education reports.

Student Borrowers Use Facebook to Advocate A Break From Loans

While Robert Applebaum hasn’t fallen behind on his student loan payments from law school, he has become frustrated with his mounting student loan debt. The New York attorney saw his $80,000 student loan debt balloon to $100,000 after he put his loans into forbearance for five years when he was working a low-paying job at the Brooklyn District Attorney’s Office.

Fed up with his rising debt and with recent media reports of banking executives from bailed-out banks receiving hefty bonuses or spending taxpayer money on million-dollar office renovations, Applebaum took his gripes online. He used Facebook as a soapbox to promote his own idea for stimulating the economy: canceling student loan debt. He quickly found out he wasn’t the only one interested in this idea.

Within the first two weeks of starting the Facebook group “Cancel Student Loan Debt to Stimulate the Economy,” Applebaum gained 2,500 followers. Just two months later, the group now has more than 138,500 members.

“Despite having a law degree, I’m middle class and I don’t have any money at all,” Applebaum says. “I don’t own a house or a car. My only assets are my couch and television.”

More Change Needed But Reforms Are Taking Shape

Applebaum hasn’t been the only one to take to the Internet to advocate for student loan forgiveness. Alan Collinge, founder of the website StudentLoanJustice.org, has used his site as well as in-person visits with elected officials throughout the country to increase awareness about the problems in the student loan system. Collinge has advocated for a return of what he calls “basic consumer rights” to student loan borrowers. Currently, student loans are one of a few types of consumer debts that are almost impossible to discharge in bankruptcy proceedings.

“Until someone shows me why student loans should specifically be exempt from bankruptcy protections, it’s definitely a fight worth fighting,” Collinge said.

Although it may be some time before the government agrees to forgive student loan debt, legislators have taken steps to make student loan payments more affordable.

On July 1 of this year, the government will implement the Income-Based Repayment plan, which caps borrowers’ monthly student loan payments at 10 percent of their gross income for 25 years, after which borrowers’ remaining debt will be forgiven. And the government’s Public Service Loan Forgiveness program allows borrowers to make income-based repayments on their student loans and have those loans discharged after 10 years of working in public service.

NextStudent, college, college loans, student loans, student loan forgiveness, discharge student loans, student loan debt, college graduates, graduate debt, BusinessWeek, Facebook groups, private student loanns, federal student loans, Finaid.org, U.S. Department of Education, Educaiton Department, Robert Applebaum, Brooklyn District Attorney's Office, cancel student loan debt, canceling student loan debt. Alan Colinge, student loan justice, student loan system, student loan borrowers, bankrupcty debt discharges, affordable student loan payments, student loan legislation, income based repayment plans, public services loan forgiveness

Share this post: email this | del.icio.us | reddit

Student Loan Blog : student loan debt, FinAid.org

Groups Say Forgiving Student Loan Debt Would Boost Economy