I am passionate about reforming student loans. I personally know so many tragic stories. If these stories were common knowledge, I reasoned, how could our society possibly ignore the problem?
The answer is complicated. Perhaps we need to make the problem visible. To start, I went to my friend Zac, Student Loans:Collection Agencies. Zac went to a state school, but never graduated. His loan balance is several times his original loan, inflated by penalties and escalating interest rates. Zac is in a good place right now. He has a good job and a healing life style. Zac’s income would allow him to make payments on his student debt, but the payment would not even cover the interest. The student loan balance gets higher in either case. Zacs comment – “I am screwed no matter what I do.” So Zac does nothing.
If Zac had credit card debt, his credit card company would negotiate a payment plan with him, perhaps forgiving some interest, reducing the interest rate or agreeing to a fixed monthly payment that Zac could handle to discharge the debt.
Why would the credit card company negotiate a fair settlement and the student loan company would not? BANKRUPTCY. The credit card company knows that Zac can file bankruptcy; the student loan company knows that he can not. The credit card company has an incentive to treat Zac fairly; the student loan company has an incentive to bully Zac.
What is everyone announced their relationship to student debt on their Facebook page? What if Facebook included Student Loan Debt in the Education and Work section of Profile? What information would we need to include?
College or University
Date of Graduation or Last Year Attended
Balance and Date
Current, Forbearance, Default?
Federal or Private Loan?
Right now Zac’s student loan debt problem is invisible. He is ashamed of his situation and only a few close friends know about it. If everyone could post their student loan debt on Facebook, we could remove the shame and make the problem visible. Once the problem is visible it is hard to deny there is a problem.
I am interested in your thoughts.