NYU STUDENT DEBT INFORMATION
The national average debt for students graduating with loans in 2008 was $23,200; at NYU, it was $34,814.
https://nyulocal.com/nyu-doesnt-really-care-about-affordability-cd38b10d1c9f
Two-thirds of students leave college with an average of $27,000 in debt. With too few jobs on the horizon, it’s no surprise that default levels are rising like floodwaters; 41% of the class of 2008 is already delinquent or in default. (The Debt Resistors Operations Manual 30)
In 2012, total student debt in the United States surpassed the $1 trillion mark. This is higher than credit card debt or any other kind of consumer debt with the exception of mortgage debt. (The Debt Resistors Operations Manual 30)
Only 37% of student loans are in repayment at any given time. The other 63% are accruing interest, adding fees and becoming more and more likely to add to the 5 million student loans already in default. (The Debt Resistors Operations Manual 32)
“Unlike almost every other kind of debt, student loans are nondischargeable through bankruptcy, and collection agencies are granted extraordinary powers to extract payments, including the right to garnish wages, tax returns, and Social Security. The market in securitized loans known as SLABS (Student Loans Asset-Backed Securities) accounts for more than a quarter of the aggregate $1 trillion student debt. As with the subprime racket, SLABS are often bundled with other kinds of loans and traded on secondary markets. With all the power on the side of creditors and investors, it is no surprise that student lending is among the most lucrative sectors of the financial industry. As for federal loans, they are offered at unjustifiably high interest rates—far above those at which the government borrows money.”Andrew Ross (NYU Prof), “Are Student Loans Immoral?”
Where our money is going:
The practice at NYU of loaning money to star faculty for their vacation homes, one senator stated “Universities are tax-exempt to educate students, not to help their executives purchase vacation homes. It’s hard to see how the student with a lifetime of debt benefits from his university leaders’ weekend homes in the Hamptons.” The compensation committee of the Board of Trustees approves loans such as these.
http://www.nytimes.com/2013/06/18/nyregion/nyu-gives-stars-loans-for-summer-homes.html
Federal loans have unjustifiably high rates of interest (6.8%). Is the government profiting? Yes, and the proceeds are used to pay the bill for wars and Wall Street bailouts. (The Debt Resistors Operations Manual 30)
“Chances are your university financial aid officials are in cahoots with private lenders. A 2006 investigation by the New York State Attorney General’s Office concluded that the business relationship between lenders and university officials amounted to an “unholy alliance.” Lenders paid kickbacks to universities based on the loan volume that financial aid offices steered their way; lenders also gave all-expenses-paid Caribbean vacations to financial aid administrators, and even put them on their payroll. In addition, lenders set up funds and credit lines for schools in exchange for being placed on preferred-lender lists.” (The Debt Resistors Operations Manual 31)
William Berkley and predatory loans:
“For 16 years, Berkley served as a member of the Board of Directors of First Marblehead Corporation, a Boston-based private student loans firm. Eight of those years were spent as lead director of the Board. Berkley has been a NYU Trustee since 1995, the same year he started profiting off student loans as a Board member at First Marblehead Corporation, raising questions about conflicts of interest. First Marblehead Corporation makes much of its money by offering college students expensive loans after they have exhausted cheaper federal loans.”
“The average interest rate on a First Marblehead loan interest rate was nearly 11 percent, while federal student loans were capped at 6.8 percent”
Fighting for federal loans to become less accessible: “First Marblehead has spent millions of dollars lobbying Washington to improve the business climate for private student-loan lenders by making federal loans harder for students to get, thus driving students to private loans. This includes lobbying congress to fight bills such as H.R. 5715 and S. 2815, which the Congressional Research Service labeled “Proposals to Ensure the Availability of Federal Student Loans During an Economic Downturn.”
“Under Berkley’s leadership, First Marblehead was investigated by the state of New York for deceptive lending practices and conflicts between private lenders and universities. You may be wondering what this has to do with NYU. Interestingly enough, Berkley joined the Board of NYU the same year he joined the Board of First Marblehead. And even more interestingly, NYU contracted with First Marblehead during Berkley’s tenure on both boards to provide high-interest rate loans to international students ineligible for low-interest rate federal loans.”
Ideas/Concepts/Words to Think About:
Andrew Ross (NYU Prof), “Are Student Loans Immoral?”: https://www.thedailybeast.com/nyu-professor-are-student-loans-immoral
Morality -There is a deep running morality in our society about paying back our debts
Race - Race plays a role in student debt as well, “African-Americans are the most indebted of all population groups. Twenty-seven percent of black graduates in 2007–08 borrowed more than $30,000 to pay for college, compared with 16 percent of whites, 14 percent of Hispanics, and 9 percent of Asians.” During the Great Recession, African Americans lost almost all of the economic gains they made after the civil rights movement. As a result, African American students have borrowed more for education than whites, and they are twice as likely to be unemployed on graduation. Worse still, students of color are much more likely to enroll in for-profit schools, which have high non-completion rates and account for nearly half of student loan defaults. It’s no surprise that the default rate for African Americans is four times that of whites.(The Debt Resistors Operations Manual 32)
Our government’s priorities - “On a rough estimate, it would only take $70 billion of the federal budget to cover the tuition costs at every two- and four-year public college. This happens to be the sum the Pentagon wastes annually in “unaccountable spending,” according to a recent audit, a testimony to how skewed our national priorities have become.”
“Foreclosing on futures” - “Foreclosing the future of young people is a callous act, and a self-destructive path for any society. But allowing Wall Street financiers to feed off their predicament is beyond any moral compass, especially—and here I speak as an educator—when the revenue is being extracted from an activity as honest as the pursuit of learning.” Also on page 30 of The Debt Resistors Operations Manual
From The Debt Resistors Operations Manual:
Fear - Lenders profit off fear, fear of a financially unstable future which only a higher education seems to be able to provide (The Debt Resistors Operations Manual 30)
Indenture - Neoliberal policy-making has transferred the financial burden onto individual students. This means your future salary will be used to pay back the debts you got stuck with to prepare yourself for employability in the first place. Having to pay for education through debt is a form of indenture. And unlike traditional forms of indenture, it can take a lifetime to regain your freedom. (The Debt Resistors Operations Manual 30)
What have other groups done/what they asked for:
Student Loan Justice (founded in 2005) and Forgive Student Debt to Stimulate the Economy (founded in 2009) aim at persuading lawmakers to reform the system. Both organizations have pushed for policies restoring bankruptcy protection and partial debt forgiveness. Unfortunately, these reasonable proposals have produced little in the way of legislative change. Four attempts at restoring bankruptcy protection have ultimately failed.
The Occupy Student Debt Campaign (OSDC) emerged in 2011 in tandem with Occupy Wall Street as part of a global uprising against neoliberalism. To fight the debt-financing of education, OSDC proposes diverse collective strategies of direct action, including a campaign of collective debt refusal. SDC believes that our public education system must be free, that any future student loans must be offered at zero interest, that all university institutions must be transparent and accountable, and that all current student debt must be cancelled. These principles, or principles like them, should be the foundation of any student debt movement. (The Debt Resistors Operations Manual)
Andrew Ross helped launch the Occupy Student Debt Campaign, which invited to “pledge to refuse payments after 1 million people has signed up”Andrew Ross (NYU Prof), “Are Student Loans Immoral?
More resources: https://wp.nyu.edu/studentlifeanddebt/resources-and-links/