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On Monday, a group of student and faculty organizers unveiled the Occupy Student Debt campaign, a part of the Occupy Wall Street movement that asks at least one million student loan borrowers to default on their loans in protest of a system of higher education financing that organizers say saddles college students with debt they may never be able to repay.
If I were a lender I would be "cheering" for this. Student loans are not dischargeable and the fees and penalties incurred by this temper tantrum would be a windfall for the banks.
It's incredibly dumb. They're going to have to pay one way or another, because at some point they're going to have their wages or their tax refunds garnished. I'll be curious to see how many people they actually get to sign on to this--I think it's a lot of talk.
Actually, defaulting on a student loan doesn't affect a credit score all that much. From the documents I've seen, it's much worse to get foreclosed upon, or even to default on a consumer credit card. Credit scoring agencies don't treat student loan defaults in the same manner as other forms of credit, for various reasons.
Regardless of the consequences, Ashley Dawson, an associate professor of English at the Graduate Center of the City University of New York, said that she and many others see little alternative to mass defaults if higher education financing reform is to be achieved.
“I see my students who have to work not only one but two jobs just to afford our relatively reasonable tuition rates,” Dawson said. “For students faced with debt, this campaign is important because it will help provide them with a collective organizing vehicle. We’re aiming to galvanize sweeping political change.”
I have to wonder how much socialist talk about politics takes place in Dawson's English classes. Of course, Dawson would call the costs reasonable, since he/she gets wages from those reasonable prices.
I think I see two very important words in what Ms. Dawson says. Those two words would obviously be campaign which could be talking about Obama's campaign and collective organizing.
I say that the collective organizing of non-payment of debt is dangerous and can result in something really sad for the students who get sucked in by this movement. They may find that their ability to borrow in the future may have flown away with the collective movement.
If I were a lender I would be "cheering" for this. Student loans are not dischargeable and the fees and penalties incurred by this temper tantrum would be a windfall for the banks.
Didnt the Federal government take over most of these loans meaning they are screwing tax payers, not the banks?
The federal government took over servicing for federally-backed loans. Those were always backstopped by the government. Private loans direct from private lenders (such as banks or financial companies) remain private loans.
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