Something Really Scary!!

Student loans are now at a $1 TRILLION level.  That is almost as much as the entire housing debt.  There is a huge difference in the two debts.  Housing debt represent physical buildings and land that exist now.  We can argue about how to price that debt, but we know there is something behind that debt.

Student loans are different.  They do not represent anything tangible.  They represent some kind of pay out in the future.

To mortgage today is one thing, but to mortgage the future is entirely different!!

Here is one young man's story.  I think you will find it interesting.

latimes.com

Student loans add to angst at Occupy Wall Street

Many of the twentysomethings protesting in Manhattan have racked up sizable debts, and some are left to wonder whether their diplomas may be worth less than their cardboard signs.

By Geraldine Baum, Los Angeles Times
6:03 PM PDT, October 25, 2011
Reporting from New York

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For almost a week, Nate Grant has sat cross-legged on a wall at the Occupy Wall Street encampment, holding a cardboard sign that bears his scrawled grievance: "Students Ought Not Be a Means of Profit."

Strangers have harangued him: "Get a job, you commie." Tourists have photographed him. Others have stopped to engage in existential standoffs. "I have to pay interest on my car loan," a banker told Grant. "What's the difference between that and you paying off a student loan?"

This sparked a debate that lasted so long that the 22-year-old protester from New Jersey missed out on getting a free sleeping bag. He spent his first night at the protest sleeping on cold concrete.

With the nation's student loan debt approaching $1 trillion, the issue has also generated debate in Washington. The Obama administration announced plans Tuesday to expand a government program to help 1.2 million borrowers reduce their payments and consolidate their student debt.

Republicans, including some presidential hopefuls, have demanded in recent days that government student aid programs be reduced or eliminated.

About two-thirds of the students who were in four-year colleges in 2009 used loans to pay tuition, accruing an average debt of $24,000, said Lauren Asher, president of the nonprofit Institute for College Access & Success. One in 10 owed $40,000 or more.

And even at a time when new tools have been developed to help poor students negotiate federal payments, an increasing percentage of them are defaulting. Last year, 320,000 people who recently left college defaulted on a federal payment.

"Compared to a generation ago, a lot more people have student loans and are carrying debt that is much greater," said Asher, adding that besieged state governments are passing on costs to students at public schools by driving up tuition.

"Most people look at the sticker prices at Harvard and Yale," Asher said. "But most students go to public schools, and tuitions there are also rising rapidly."

Republicans in Congress are seeking to lower the $5,000 cap on federal Pell Grants, which aid low- and middle-income students and do not require repayment.

"Look, I worked three jobs to pay off my student loans after college," House Budget Committee Chairman Paul D. Ryan said last week at a town hall meeting in his native Wisconsin. "I didn't get grants, I got loans, and we need to have a system of viable student loans to be able to do this."

Presidential candidate Ron Paul also reminded voters last weekend that he had worked his way through college and medical school, and promised that if he was in the White House he would eliminate federal student loans altogether.

But President Obama has supported loan programs and tried to improve them. He also has reminded voters of his personal experience: Both he and his wife, Michelle, came out of college and law school with $60,000 in student loan debt. "We were paying a bigger amount every month than our mortgage," he said last summer. "And we did that for eight, 10 years. So I know how burdensome this can be."

It doesn't take long before any conversation in the strikingly youthful crowd in Lower Manhattan turns to the loans many of the twentysomethings have racked up. It's not a central theme, like corporate greed and unemployment, but rather a subtext to all the chanting and marching.

Grant left Ithaca College in upstate New York in May with a degree in English and $90,000 in private and federal loans.

An honor student in high school, he could have had a "free ride" if he had gone to a public university in his home state. But he loaded up on student loans so he could enroll in Ithaca's communications program to study film directing. Within a year, Grant became disenchanted with the program and switched his major.

Unable to find a good job that pays a decent wage using his degree, Grant decided this summer to join the military, hoping to take advantage of a student loan repayment program that could shave $60,000 off his debt.

"I just felt I had to do something to get this monkey off my back," he said.

Since graduation Grant has been living with his parents in Little Egg Harbor, N.J., and doing odd jobs.

This summer, while he was mowing lawns and working at a kayak concession, he began questioning his decision to attend college. His father, who wraps meat at a local grocery store, hoped it would give him an advantage. But Grant looked at his older brother, who never went to college and is a UPS driver, and wondered.

"He is married and debt free except for his mortgage, and here I am with $90,000 and a piece of paper," Grant said. "Well, in a weird way I regret the whole college thing."

But then he smiled and pulled his gray knit cap tighter over his long blond hair, as if he was embarrassed.

"College makes you cynical," he said quickly. "I guess I'm proud of my degree. I just don't see where it gets me."

Cynical, perhaps, but when he read on the Internet about the rumblings down near Wall Street, he decided to join the fray.

"I kept seeing posts that everyone there was upper-middle-class and while their hearts are in the right place, they're trying to represent something they don't know," said Grant, who hitched a ride the two hours to Manhattan on Thursday.

His first day at Zuccotti Park, he seemed baffled by some of the flakier characters around him.

" 'I choose compassion,' " he said, reading a sign near him. "What the heck does that mean?"

He figured he was seeing "my generation's hippies.… At least they're better than hipsters. We don't like them."

The longer Grant spent perusing this poor man's Olympic Village, the more he became intrigued by the variety of grievances and the spirit. At one point, a chorus of protesters called people over, announcing, "The think tank is going to be discussing corporate personhood. Right here, right now."

Grant looked interested. But before he could say anything, a man who said he was from New Hampshire photographed Grant's sign and bellowed at him: "Lame, you're lame.… Stop complaining. Get a job."

Grant had been mostly silent the last few days, but this time he fired back: "That's why we're here, buddy. We can't get jobs."

By Tuesday, Grant had found work with the organizers running a camera — something he learned in college. It won't pay, but he said it felt good to have purpose.

"I've gotten a job with the movement," he texted. "It's eating up all of my time."

geraldine.baum@latimes.com