Why "Student Loan" is a dirty phrase to me.
Student loans were part of the aid package that helped me through college in the 1970s. But let me unpack some differences between then and now:
Annual tuition at the major state University I attended back then was about $1800 (we were on the "trimester" system, so figure $600 a trimester) and room and board (at that time required for Freshmen and Sophomores- live on campus) was another $1500 or thereabouts, IIRC. Call it $3300 for the year.
About $17,000 in 2019 dollars.
Since the residency requirement was only two years, the rock-bottom total of "checks to the University" for a 4-year undergraduate degree back then approximated $10,000 or perhaps $52K in today's money.
I had "survivors benefits" from my deceased father's military service saved up, and my family qualified for Pell Grants, which at the time were called "BEOG" (Basic Education Opportunity Grant?). I also qualified for the University's Work-Study program. After the first two years I moved off campus and worked actual jobs, which ended up stretching my undergraduate time, as I had to go part-time for most trimesters in order to work and attend classes.
Between all of that, I ended up accessing Federally guaranteed "National Direct Student Loans" for approximately $6800 over the 6 years it took me to complete an undergraduate degree. About $21K in today's money.
Most of those loans were accorded the Federally-subsidized interest rates and came in at between 2% - 3% interest. One, IIRC, was unsubsidized, at a higher rate, 5%.
My subsidized loans were all from the same bank, which bundled them together and sent me payment coupon books for monthly payments of (again, IIRC) $68 or so. The unsubsidized one was separate, and my stepfather paid it off as a graduation present.
Sixty-eight dollars a month doesn't sound like a lot now. Call it $210 a month in today's dollars. But it was enough to keep me economically precarious for years, and more than once I considered chucking the whole "be responsible" thing and disappearing into the shadows, especially since an undergraduate Liberal Arts degree back then qualified me for exciting career opportunities like managing a tee-shirt shop, serving cocktails, and selling clothes in retail stores.
Plus ça change, plus c'est la même chose...
And I was one of the "lucky ones". I had the savings of those survivor's benefits. I took full advantage of FAR more generous Federal grants and subsidies than today's students are eligible for. I qualified for that work-study program. My stepfather made me that generous graduation gift. Being white, I could get shitty jobs with relative ease.
I cannot imagine what it must be like for today's students, especially those starting out with much less than I did, trying to access the shamefully mingy remaining Federal education assistance, looking at an economy so infinitely worse than the one I graduated into... AND...
...falling into the hands of the most vicious collection of grasping, predatory grifting sharks to wear the label of "educational aid" imaginable. Correction, UNimaginable. I could never in my wildest nightmares have come up with today's sleazy, greedy, bloated parasites masquerading as "lenders".
When I got my Federally-guaranteed student loans, I got them from an actual bank. A locally-owned, small-town bank that embraced the student loan business for local customers not as a way to fatten their bottom line, but as a way to demonstrate they were "investing in the community" while doing all the usual folksy-cobra profiteering banks did back then. Which looks positively quaint and benign compared to what banks get away with nowadays, but I digress...
A couple of years after I graduated, those loans were sold to a student loan processing company, but back then, the regulations for federally-guaranteed loans required such companies to retain the terms of the original loan agreement, so all that changed was the typeface on the payment coupons and the address I sent them in to.
And that meant that when I went back to school, enrolled in another certified higher education program at another University, the loans went into NO-INTEREST SUSPENSION for as long as I was enrolled full-time.
And that also meant that when I got very ill a few years after I completed my second degree, I was able to move those loan payments into "hardship suspension" for more than six months, which accrued additional interest at the original rate but no additional penalty or fees.
I didn't have to argue or plead or fill out masses of paperwork or get major documentation for any of this. I sent the proof of enrollment for the no-interest suspension. I sent a form letter from my doctor in to the loan processing company and received the notice of hardship suspension a couple of weeks later, in time to save me from having to scrape the next payment out of the couch cushions.
And, had I needed to, I had the option of renegotiating my payment amount down to a smaller amount for a longer repayment time horizon- again, with additional interest accruing at the original rate, and a small fee for the transaction, but no penalty or bump in the interest. There were a couple of times I seriously considered that, especially when my partner wanted to go back to school and we took on joint payments for her tuition.
I toughed it out on the original terms, but I had the option of doing it, and (and this is critical) I knew I wasn't going to get screwed over to the nth degree if I missed a payment, which I did a few times. In fact, I had two "skip payment" coupons in each 36-month coupon book, that entitled me to a no-penalty one-month extension at the original interest rate. The ONE time I needed more than those two coupons, I was hit with a $50 penalty, which seemed steep, but they also offered me the option to just add it onto my loan amount.
Would any of today's vampire student lenders do any of that? Is it even possible to get a 2% student loan anymore?
If we could re-institute the loan programs as I experienced them, I would still not be thrilled about it as an option. With all that generosity, those loan payments made my life hell for nearly two decades, and seriously limited my choices and options, and damn' near turned me into a criminal once or twice.
I don't want today's students to go through what *I* went through (and again, I was one of the lucky ones!) much less what faces them now.
So... no... I think investing in the future of our students is more important than any kind of tit-for-tat value-for-value monetary calculation. The value of education is beyond dollars.
opinionatedly,
Bright
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