Three Filthy Words

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I have a guilty indulgence.. watching Ted Talks when I should otherwise be productive. My biggest hot-button, crusader issue is US student loan debt, so I am anxious to see a Ted Talk that addresses this topic and possible solutions. As of today, no talks have been posted, but I have found a few conversations, and I found some of the comments in these conversations to be…. sub-Ted. The mention of just three little words will quickly divide a room:

Student… Loan… Bailout 

For those of us who are drowning in student loan debt (myself included) our stance is a fairly easy to comprehend. The point of view of those vehemently against student loan bailouts is rather simple, too. They don’t feel they should have to pay for our educations and that bailing out students won’t teach them responsibility. Although this point of view has a legitimate concern, their objections are misguided by stereotypes and utterly uninformed. I could go on at great length about the pros, cons and misconceptions about a proposed student loan bailout, but instead I will focus on just one misconception:

The Stereotype of the 20 Something Student Loan Debtor 

I don’t diminish the financial struggles of recent graduates faced with repaying loans, in fact with every passing year students are graduating with higher and higher debts to repay… but…. the 20 somethings are not the group most burdened by their student loan debts. In most situations, this age group will be single, childless and able to live virtually rent free at home with their family. In their late 20s and 30s, when they meet someone special and want to move in together, maybe even get married and have children and/or buy a home, that’s when they will most feel the suffocating affect of their student loans (especially if both partners carry high debt). But it doesn’t stop at the 30 somethings… there are plenty of student loan debtors in their 40’s, 50’s… even their 60’s! That’s right… grandparents are struggling with their student loan payments.

How can this be? Grandparents with student loan debt? There are three reasons (that come to mind) why even grandparents are paying on student loans.

1. Following redundancy, many middle aged and older Americans found themselves uncompetitive in the job force. Despite years of service and experience, they were suddenly considered “unqualified.” In order to compete, they needed to return to school and earn qualifications.

2. Many of the grandparent student loan borrowers are simply still in repayment from the debt of their youth. Deferments, although very simple to obtain, lead to a student loan debt that spirals out of control, as the interest continues to accumulate and then becomes CAPITALIZED. This means that the interest is added to the principle, causes monthly interest accrual to grow. If their situation was ever so bad that they defaulted, the debt can nearly double in a matter of just a few years.

3. Perhaps the most tearful amongst the grandparent student loan debtors are the ones that just wanted to do the best by their own children. These are the cosigners of plus loans.

As it stands now, I am  highly likely to someday be amongst the grandparent student loan borrowers. My son is only 2-years old, but I am 24 years from seeing the repayment or forgiveness of my loans.

I find this idea that a student loan bailout won’t “teach graduates a lesson about financial responsibility” patronizing when applied to the entire population of Americans burdened by student loan debt. I find it utterly disgusting that anyone should wish upon another human being that they “learn about finances” by becoming indebted for sums of money that could buy a house… or two or three houses…. before they have ever had the opportunity to manage the finances of a household; before they have any idea of their realistic income potential.

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TyLean Polley is an avant-garde recording artist. You can get a free download of her music at TyLeanPolley.com