“The collection fees are very, very high and it’s actually more profitable for banks if students default,” he continued. “Why education should be a vehicle for this is beyond all credibility in a democracy.”
On the university side, the increased focus on the problem of student loans spurred by Occupy Wall Street has put some of New York City’s most venerated institutions of higher education in a rather uncomfortable spotlight. David Van Zandt, the president of the New School, was an early responder to the Occupy movement, sending a message to students, faculty and staff that “our academic values dictate that legal, peaceful demonstration furthers key educational goals” and organizing a university-wide “teach-in.”
Brian Connolly, a spokesman for Columbia, responded to our query by saying “Columbia announced a large expansion of financial aid in 2008 and discontinued student loans.” He did not respond to our second query about graduate loans, which were not discontinued under the expansion of financial aid.
Another aspect of student loans is that, contrary to what happens in taking out a mortgage, admissions officers rarely advise that students do not have the financial capacity to take them on. In an email, John Beckman, a spokesman at N.Y.U,, responded to our query about whether the university ever advises applicants not to attend it because of the debt burden: “Our financial aid advisers are not financial planners, but they provide families with information to help them understand the financial implications of attendance,” he wrote. “Still, this conversation has to be undertaken respectfully and thoughtfully: one cannot simply put up a barrier to students and their families because they have to borrow to attend school—borrowing has been part of going to college or graduate school for a long time.”
The question that Occupy Wall Street is raising, however, is, will that change?
“Push will come to shove when students stop going to college,” said Mark Taylor, a professor of religion at Columbia and author of a controversial 2009 New York Times opinion article called “End the University as We Know It.” He has advocated for controversial moves such as cutting athletic programs.
“Colleges are going to have to come clean on what it is that they’re selling,” he said. “They’re not simply selling education. They’re marketing the brand whose value may be declining.”
One person who has appeared to be somewhat affected by the dominance of the debate over student loans at Occupy Wall Street, as well as a petition in circulation advocating for student loan forgiveness, is President Obama. Last week, as part of a series of executive orders, he announced an expansion of the Income Based Repayment plan that will allow students the ability to cap their loan payments at 10 percent of their income starting next year. The plan will forgive the balance of federal student loans after 20 years of payments, but it applies only to students who took at least one of their loans out in 2012 or later. The program currently in place assists borrowers whose debt burden exceeds their income, but students with private loans have no such assistance.
“What’s been going on at Occupy Wall Street and with the petition from the forgive-student-loan-debt people did catch the White House’s attention,” said Mark Kantrowitz, the publisher of the websites FinAid and Fastweb. Mr. Kantrowitz painted a bleak picture of the future, however, saying he was pessimistic Congress would ever make higher education a priority, despite evidence he says shows federal income tax payments from increased earnings more than repay the cost of giving students grants.
“What we’ve got here is, in a way, all about greed,” he lamented. “One group wants to see federal spending cut so they can preserve their tax cuts. Another group wants all their student loan debt forgiven. Corporations have their own agenda. So you have corporate greed, you have personal greed and nothing in all this is being driven by policy thinking.”