ON THE ROAD: Chicago
I was reading Rolling Stone and this amazing article about Student Loans.
Sure enough my barkeeper Klarny last night here at the Public Hotel confirmed all this. His degree in Asian Politics failed to launch any kind of career. He makes the minimum payments on his loan contract with a bank, yet they call and hound him twice a month to pressure him for more! He tips his tax refund in every year to work it down. He relies on bar work to live, and is contemplating a trade as a carpenter now. He says the problem is wider – every college has ‘extra’ costs (in the thousands) that are not on the loan, and if you don’t pay these they withhold your results!
The article points out in depressing detail how some people in the USA get unemployed after their bank has called their work and left a message with reception that they are ‘in legal trouble’. You cannot escape repaying those loans, and the interest and fees ratchet up if you fall behind. Even bankruptcy is exempt – you are screwed for life, if you fall off the employment bandwagon.
Matt Taibbi is a great writer, he flags a monster on the loose. We have a watered down version of the problem in Australia with HECS and Fee Help. When our college (in 2010) was attempting unsuccessfully to get Fee Help accreditation, it became apparent the student would be oblivious to the tuition fees. It also emerged that other colleges we competed against (SAE, AIM, JMC) had hiked their fees as soon as they got accredited for Fee Help. We planned to do the same thing!
Three years on, I see those colleges have expanded a lot, and it would appear that is off the back of Fee Help, funded (thank goodness) by our Government and not the banks as in the USA. But a structural problem nontheless since kids are left to pay. And there is no one less able to be rational when signing a college contract than a 17 or 18 year old.