US student debt $1.3 trillion and going up by thousands of dollars a second

0
835

APRIL marks three years since US student debt hit $1 trillion. Now $1.3 trillion and climbing – by thousands of dollars per second (link is external) – unpaid student loans are a burden for more than 40 million American families.

It’s time to turn it around.

That’s why the AFT has joined a broad coalition of organisations, from its sister unions to Student Veterans of America, from the National Young Farmers Coalition to Jobs with Justice and the Center for American Progress, to demand that elected officials take action and address college affordability within the next six months.

They are expected to sign a pledge ‘to act before debt strikes back,’ suggesting that if the burden does not ease, students may ‘strike’ and refuse to pay back their loans.

In fact, some Corinthian Colleges students already went on strike, refusing to pay their loans because the college failed to educate them as promised.

‘Students shouldn’t face a double whammy of skyrocketing higher education costs and high interest rates that will lock them into debt even longer,’ says AFT President Randi Weingarten. ‘We need to ensure that young people and their families aren’t crushed by unfairly high interest rates on their student debt.’

Latechia Mitchell, a second-grade teacher who is saddled with $60,000 in student loans, couldn’t agree more.

She and her husband, who carries an additional $25,000 in student debt, are raising two children and living paycheck to paycheck, unable to save, pay for high-quality child care, or take advantage of summer programs for the children.

While she loves her job, Mitchell is not sure she’d have chosen to be a teacher had she understood how deeply she’d be affected by long-term debt.

Sharon Williams is also struggling: An army veteran, widow and mother of two, she enrolled in the University of Phoenix to advance her career and support her family.

Despite the for-profit college’s promises, she got less financial aid than was initially promised. The federal employee discount she was to receive never materialised, she had no access to instructors and was unable to transfer credits. “I spent my money on a bogus education,” says Williams, and she is still paying for it.

The pledge against student debt promises to change the situation by:

• Restoring public funding to higher education, increasing state and federal investment, and passing policies such as free community college to ensure that college is accessible to all;

• Providing support to borrowers struggling to reduce outstanding debt, with policies such as student loan refinancing and programs that help borrowers meet their obligations without financial hardship; and

• Stopping Wall Street’s privatisation of higher education by holding those who profit off the higher education system—like for-profit colleges and student loan servicers—accountable.

During a week of action April 27-May 1, informational campaigns such as letters to the editor and Twitter feeds with #DebtStrikesBack will work to ensure Americans understand the degree to which student debt threatens our nation.

For those most affected – student borrowers – a new Student Borrowers Hotline is launching, and continued guidance toward paying off debt is available at higherednotdebt.org (link is external). Activists will meet face to face with legislators on Capitol Hill and begin a six-month countdown during which lawmakers can begin to bring down tuition and college debt.

Rep. Mark Takano (D-Calif.) is leading the way, launching the PRO Students (Protections and Regulations for Our Students) Act at an April 30 press conference. This comprehensive legislation would protect students from predatory, deceptive and fraudulent practices, particularly in the for-profit college sector.

Meanwhile, Sen. Elizabeth Warren (D-Mass.) and Rep. Elijah E. Cummings (D-Md.) held a forum April 27, where they listened to Mitchell, Williams and others working to address the student debt crisis.

In spite of the enormity of the student debt challenge, ‘We’re going to keep on pushing,’ said Cummings. ‘If we don’t push, it can only get worse. We want to make sure it gets better.’

• When Michael Adorno-Miranda enrolled in college, he was the first in his family to ‘live the dream,’ he says. Admissions personnel at Everest College, a for-profit school under the Corinthian Colleges umbrella, ‘talked a good game,’ he says, and he felt sure it would prepare him for a successful career in information technology.

Instead of the high-quality education he was promised, his assignments involved outdated software, obsolete hardware and otherwise outmoded technology.

Now, at age 33, he has no job prospects and has moved back in with his mother. Plus, he is saddled with $37,000 in debt. What he thought would launch him toward life as an independent adult ‘turned out to be a nightmare.’

Adorno-Miranda ( is one of the Corinthian 100, students who are refusing to pay their student loan debt because their ‘education’ at Corinthian Colleges gave them no useful credentials – but a whole lot of debt.

The students are pressing the U.S. Department of Education to discharge their loans and advocating for stricter regulations to prevent other institutions from abusing students in the future.

To help them, Rep. Mark Takano (D-Calif.) has launched the Protections and Regulations for Our Students (PRO Students) Act.

Its provisions are designed to protect students from predatory, deceptive and fraudulent practices, particularly in the for-profit college sector. Rep. Susan Davis (D-Calif.) and Rep. Steve Cohen (D-Tenn.) are co-sponsors of the act, and AFT President Randi Weingarten is a strong supporter.

At a press event April 30, these leaders first came out for debt relief, then in support of the PRO Students Act.

‘You can’t make students who have already been defrauded beg for a discharge,’ said Weingarten, noting that she had just signed a letter to Education Secretary Arne Duncan calling on him to cancel the Corinthian students’ debt. ‘You need to discharge this debt.’

Weingarten and Rep. Takano ‘We are a country that tells students that college is really important, but then allows predatory institutions like Corinthian Colleges to stick them with crippling debt, worthless degrees and no prospects for the future,’ said Weingarten (pictured with Takano). The PRO Students Act could help change that.

The act is designed to address the need for stronger regulation of the for-profit school industry. Currently, for-profit schools enroll just 13 percent of all post-secondary students but account for nearly half of all student loan defaults.

They allocate about 23 percent of their revenue to recruiting and marketing, 19 percent to profit, and just 17 percent to academic instruction. And 72 percent of them produce graduates who earn less, on average, than high school dropouts.

Takano noted that, for all those reasons, the PRO Students Act would:

• Require proprietary institutions to derive at least 15 percent of their revenue from non-federal student aid, and include military and veterans’ education benefits in that calculation;

• Prohibit schools from using student aid revenue for recruiting and marketing;

• Establish an oversight committee;

• Strengthen sanctions for violations, establish a Student Relief Fund and bolster consumer protections for students;

• Prohibit loans that waive the rights of borrowers to arbitration against their lenders;

• Prohibit incentive compensation based on recruitment or academic success; and

• Strengthen whistleblower protections for faculty and staff.

‘It is clear we have to get Wall Street out of education,’ said Takano. ‘We are here today to take the first step.’