Friday, December 9, 2011

Debt: The Real American Way

Natalia got me going on this topic, so read her piece first.

I graduated from college in 2007, and got a job later that year that didn't pay enough that I was able to pay my student loans, which at the time totaled somewhere around $45,000. The majority of my student loans are federal loans, subsidized and unsubsidized Stafford loans, which are guaranteed by the federal government. My Stafford loans and one private loan are serviced by Sallie Mae, and since 2007 over $9,000 has been added to my total amount owed in "capitalized interest". That's a nearly 25% increase in total amount owed in just 4 years.

The other loan, a Perkins loan, which is also a federal loan, and is serviced by the school that I attended, has accrued less than 10% "capitalized interest" in the same amount of time. Granted, it's a much smaller loan, but my point still stands.

It could be argued that this is my own doing. After all, I went to college. I got a degree in something other than finance (which is the only thing that our society values), and was unable to find a job that paid me sufficiently to make payments on my student loans when I was working full time. It could be argued that I am to blame because I chose to start a business rather than scratching my eyes out to try to get another J-O-B after being laid off in 2009.

However, what cannot be argued is that my debt wouldn't have increased by a CAR (which I don't have) if I had been making payments all this time. Even if I had been paying some $600 a month for my student loans for the last 4 years, nearly a third of that $600 monthly payment would have gone toward INTEREST.

It doesn't matter who you are, that's usury.

I'm far from innocent in all of this. I know that I am responsible for my student loans and I intend to pay them back, not because any of that money has any value in my life, but because I spent 4 years living in a Bohemian paradise (as much as I might like to complain about it...), and that experience will end up being worth far more than whatever I will end up paying to Sallie Mae. However, many people are in much worse places than I am, and the fact that debt is what's discouraging Americans from becoming more educated is disgraceful. It's disgusting, and corporations like Sallie Mae who are "servicing" tax payer dollars should be ashamed of themselves, and quite possibly dismantled. (SOCIALISM! There, I yelled it for you so you don't have to waste your precious time in the comments.)

The people who should profit from educating Americans are teachers, not corporations. Sallie Mae did nothing to enhance my educational experience, and so they should be charging less interest on my student loans than the school I went to has charged.

Fortunately, no one I know is without some amount of debt either from a mortgage (that is worth more than the house its for) or student loan debt (more than one of my friends owes more than double what I do!), or even credit cards. So, debt is the American Way. That's it. Debt.


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