“I am 25 years old now, and shacking up in my parents’ guest bedroom,” he told me. “I have successfully made four payments on my student loans in the past three and a half years. I have over $48,000 dollars of student loan debt, and absolutely nothing to show for it. No degrees. No certificates. No qualifications. I have continued my education to the best of my ability since leaving A&M, but always at community colleges and always paying for everything out of pocket. As you can imagine, since I’m not ‘qualified’ for a decent paying job, my savings for school piles up very slowly, and then disappears when August and January roll around. I haven’t been back to school in about a year now, and I currently work at Subway, making sandwiches. I don’t make my loan payments.”
He’s about to join the military because he sees it as his only option. “I am depressed at the idea of signing my life away for four years so I can fight someone else’s wars. I am angry beyond belief that it’s come to this,” he said.
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ABOUT THE FILM
Default: The Student Loan Documentary is a 27 min. long documentary chronicling the stories of borrowers from different backgrounds affected by the student lending industry and their struggles to change the system.
No matter when their loans were taken, many borrowers now find themselves in a paralyzing predicament of repaying two, three or multiple times the original amount borrowed, with no bankruptcy protection, no cap on fees and penalties and no recourse under the law. The consequences are dire, with stories of borrowers in financial and emotional ruin.
While the media has focused on the disaster that sub-prime mortgages have turned out to be, only superficial attention has been given to financial giants which have been profiting by approving loans to low-income students with variable interest rates up to 25%.
As The National Consumer Law Center concluded in their March 2008 report titled “Paying The Price: The High Cost of Private Student Loans and the Dangers for Student Borrowers”, there are ominous signs that “the student loan market is headed for the same fate as the subprime mortgage industry .”