Occupy Student Debt Urges Graduates to Default on Student Loans
Image source: OccupyStudentDebt.com
Over the last few months, college students have voiced a number of demands like these during Occupy Wall Street protests:
- American colleges and universities should freeze tuition at current levels.
- The government should intervene and cancel all student loans.
Those demands look pretty pale in comparison to those that have just been voiced by Occupy Student Debt, a new organization that wants one million students to sign a pledge that they refuse to repay their student loans. The organization is hoping that a mass default will force the government to intervene to help debt-burdened students, or force lending institutions to cancel outstanding loans. To date, the number of graduates who have signed the pledge is hovering only the hundreds, not the thousands or beyond. But if the movement really catches on, it is bound to cause some major ripples among colleges and loan providers.
To quote from the Occupy Student Debt website . . .
“We were told to work hard and stay in school, and that it would pay off. We are not lazy. We are not entitled. We are drowning in debt with few means of escape.
“We would give anything to pay our debt, but we are un(der)employed due to the jobs crisis and lack of consumer protections and refinancing rights make things extremely difficult.
“The student loan bubble may not burst with a bang, but it is slowly suffocating us.”
Will simply refusing to repay loans have the impact that Occupy Student Debt is hoping for? At this point it is difficult to tell. However in a recent post on Huffington Post our friend Anya Kamenetz, who writes for EduPunks, is quoted as offering the following cautions:
- There are consequences for actually defaulting on loans, such as the garnishing of wages and tax refunds in future years.
- Students who refuse to repay loans could trigger a backlash, especially from older Americans who took loans and then paid them back responsibly.
Those are realistic possible outcomes of refusing to repay loans. But let me tell you a personal story. When I was in graduate school, I borrowed $2,150. (Thankfully, not a penny more.) And a decade later, I finally closed out that loan after repaying nearly $9,000. If I had borrowed $10,000, I’d really be in one deep hole and default would look pretty doggone rosy to me too.
So all I can say to the Occupy Student Debt people is that come what may, my heart is with you.
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