The proposal just changes current consolidation options, income caps, and repayment plans for certain students, but will not help many others. It also has some hidden IRS penalties that takes away loan debt and increases tax debt. Most people are unaware of this.
One the positive side, it does reflect that politicians are beginning to look at the issue of excessive student debt in this country, and are listening to Occupy protesters and other activists in this area.
It does not help those in default or in private loan hell. It does not address the cost of education and skyrocketing tuition costs. It also does not deal with the unethical relationship between lenders like Sallie Mae, the government, and the colleges and universities. And it certainly does nothing to address the fact that there simply are not enough jobs for college graduates in the US to support the kind of debt people are getting themselves into- erroneously believing they are making a sound investment.
Student loan activism in the US right now is mainly centered around the following ideas. These ideas were discussed in the previous post, but are worth revisiting after Obama's pitiful response to the student loan crisis was revealed.
1. College needs to be affordable. If not free it needs to be close to it. We had a system like this once in this country and other countries have it now. It is possible. The public university system needs to be expanded, and subsidized by the federal government. The student loan system as it stands now hurts students, and helps lenders and university administrators get wealthy. So that system has to go. Private school tuition should only be payable through grants, scholarships, and private funds. That's it. They are not worth the debt in almost all cases. For profit pig-schools like University of Phoenix can take their garbage degrees and get out. The student loan gravy train they have been exploiting has come to the last stop.
2. People need to be able to make a living wage without a college degree. College is simply not something everyone wants or really needs. Vocational and trade schools are great, and they can be expanded as part of the public university system. Minimum wage needs to be increased and society needs to respect all occupations and recognize that people have a right to be compensated and treated decently even in "unskilled" positions. Social attitudes about this have led to too many people pursuing education solely as a means to survive in America. Barack Obama wants a more educated America, and encourages people to go to school, but it costs too much, and there aren't enough jobs.
3. Restore student loan bankruptcy protection. This will not solve the issue of student lending corruption and overpriced tuition. But it will offer relief to those in the most trouble, and it will begin to change the system, as it will show just how over-rated these degrees are. All other consumer debt in the US can be discharged in bankruptcy. This includes million dollar corporations, and gambling debt. It is simply unfair that students don't have the same protection. Bankruptcy is no joyride for people. It is a tough thing to go through, and has many consequences.
4. Forgive student loan debt. The student loan scam is just that. It is fraud. As other activists have said, when debt is fraud it needs to be forgiven. Not everyone agrees with this, but the more one learns about how there came to be 1 trillion dollars in student loan debt in this country, the more likely one is to see that the behavior of the colleges and lenders is criminal- and the government sanctioned the crimes. The way to make it right is to forgive the debt, and leave the colleges, lenders and government to absorb the losses. A variation of the forgiveness plan would be to charge the students flat rates for already earned degrees (ex: $8,000 for a 4-year public university degree) and forgive the rest.
1. ALL EDUCATION MATTERS is an organization that works to improve the system of higher education and how it is funded, and approaches this from various angles.
2. STUDENT LOAN JUSTICE fights for restoring bankruptcy protection to student loans.
3. FORGIVE STUDENT LOAN DEBT TO STIMULATE THE ECONOMY is lobbying for forgiveness of student loans on the basis that the system is out of control and the lending practices have been deceptive and unethical.
There are many Facebook groups associated with the Occupy movement that provide informative links to all sorts of activism in this area which you can participate in. Momentum is building!
HERE IS A GREAT ARTICLE ON THE CRIMINALITY OF STUDENT LENDING PRACTICES.