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The Student Loan Racket

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Public Notices

The American Dream should never be placed so far out of reach.

High school graduates are offered scholarships – and, three decades ago, Troy University gave me $100 per semester to participate in the music department.

That may sound like a drop in the bucket, but school was only around $400 per semester back then.

My grandmother sent me a $300 check each month, and my parents were covering all my bills. I also served as a work study at the Troy University Library, where I made minimum wage but had enough hours each week to get a decent check.

I also had some side jobs through the years, at the grocery store, the video store (remember those?), and a fast-food restaurant.

So why, 30 years later, am I still concerned with student loans? Why did I ever borrow so much in the first place?

My frustration is that the financial aid people lied to my parents and I back then. Big, bold promises. “If you are a teacher, your loans will be forgiven” was what I heard – now, there were other details such as “if you are a teacher in a low-income school, your loans will be forgiven”, followed by another I heard later on, “if you are a teacher in a low-income Title I school for three years, your loans will be forgiven.”

What they said every time was – your loans will be forgiven.

That was a lie. It was not true. It was never true. Maybe for a special education teacher, or core subject (science, mathematics, social studies, English) teacher. Certainly not for a music teacher.

I was among the first in my family to attend college. I didn’t need to borrow the money. Yet, the financial aid people dangled the possibilities in front of me –take out a loan that helps you with living expenses and pays for textbooks. Ah, yes! So, I could pay for those expensive textbooks, but keep whatever was left over for the other important college things. Like, I don’t know, beer and cigarettes. Or whatever else was needed at the fraternity house at the time.

Once I graduated, I was under the impression that those loans would never

MICHAEL BIRD Columnist

come due. I was working in a low-income school, just like they said. Sure, I may owe a couple hundred bucks here and there, but nobody really came calling at that point.

I estimate that I borrowed about $12,000 over the seven years I spent in college – five working on a Bachelor of Music Education degree and two getting my Master of Science in K-12 Education degree.

How in the world did that balloon up to $37,000 over these 30 years, even with me paying between $200-$300 per month?

How come my loan was bought and sold five times to different lenders? It was KHEAA, then Sallie Mae, then Regions, then Navient, then EdFinancial, then whoever else.

It’s time to call this what it really is – a racket.

The loan companies make outrageous offers. The colleges inflate their prices. The banks pay the colleges, the colleges charge the students, the tuition goes up, the loan amount requests increase, the students get hit with fees and high interest rates.

This past week, President Joe Biden attempted to fix the situation with $10,000 forgiveness for people who make under $125,000 a year – and where that number came from, I don’t know, because it would take several years for me to make $125,000.

But it’s a positive step. For people to say, “if you borrow it, you pay for it,” that is true, but this is not just another government handout in my view. This is partially an admission that they got it wrong in the past and are trying to correct it.

Will this fix a thing? Who knows. The lending companies aren’t in this at all, and until they have some skin in the game, it’s doubtful they will change their predatory ways. And the colleges are scrambling as it is to get people to come – once the Covid era of virtual learning hit, the toothpaste was out of the tube and some folks decided they’d rather just join the workforce (or sit at home) instead of getting the Great American University Experience.

Where does that leave us?

I recall the letter I wrote to President Barack Obama back in 2013 when I’d been notified my minimum student loan payment would be increasing to $439 a month.

“Dear President Obama,” I wrote, “I know you once had student loans. “I have no credit cards, one month left on my car payment, a house note, and utility bills,” I continued. “But with seven children, I can’t get approved for food stamps because I am a schoolteacher with three other after-school jobs. Do you have any insight as to how I can lower my student loan payments?”

The President responded with a personal letter, on White House stationery.

“I am glad you took the time to share your thoughts,” President Obama wrote.

“Higher education is the surest path into the middle class. Yet while a college degree has never been more important, it has also never been more expensive,” he continued.

Reading the rest of page one, he talked about things he was going to try and get Congress to do to keep situations like mine from occurring, such as putting a cap on loan repayments, and jumpstarting competition between colleges to try and keep their ever-rising costs down.

Over on page two, I realized that President Obama wasn’t going to address my personal situation, when he directed me to two government websites where I could find out more information about loan repayment options!

He did, however, sign the letter.

So, I have a Presidential signature and, thanks to some of this forgiveness, a light at the end of the tunnel: my final payment will be in October 2023.

Michael Bird is a music teacher for Tallassee City Schools and co-hosts “The Saturday Morning Show with Michael Bird and Scott Adcock” on 580 WACQ and FM 98.5.

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