Posted 10/30/2011 02:55:00 PM by Douglas

Narrow, unenlightened self interest isn't difficult to grasp, so it's not surprising that the occupy Wall Street squatters are tired of paying their bills. But the mentality behind the movement to negate student loans is a bit more troubling.

While economists say there is little chance that such tactics could succeed, the fact that they are even being talked about — including the recent introduction of a congressional resolution calling for student loan forgiveness — shows the depth of the frustration and anger brewing over what is cumulatively a crushing debt load for U.S. students and graduates.

Wow. I've been reading about how the higher education bubble is going to be the next one to pop. Something has to be responsible for a five-fold increas in tuition over the past 10 years, and just like the housing bubble, most of the blame can be levied on too many government dollars telling lenders and borrowers that the money will be spent. So now you've got millions of people that owe hundreds of thousands of dollars with a relatively small probability that they'll have the ability to pay it back? What does that breed:

Robert A_____, a 37-year-old lawyer who graduated from Fordham Law School in New York City in 1998 with about $65,000 in debt, is the creator of ForgiveStudentLoanDebt.com. He said the website grew out of a proposal he first posted on Facebook in 2009 speculating on the economic impact there would be if student loan debtors suddenly had hundreds of dollars a month to spend. Within weeks, the post went viral and he had 300,000 “likes” on Facebook, he said.

Applebaum's idea was born out of painful experience. He said he began championing loan forgiveness after going to work as an assistant district attorney in Brooklyn and realizing he could either pay his rent or make his payments on his student loans. He said he chose to put his loans in “forbearance” — an agreement between the lender and the borrower that prevents a declaration of default but doesn’t prevent the continued accrual of interest — until he left the DA’s office in 2004. After making his loan payments every month since then, his debt today stands at $88,000.

That spells out everything, doesn't it? Not only is the college education a right, not a privledge, but also his house. He doubeled down on the interest payment for a decade so he could live in one of the most expensive real estate market in the country. Then, as the interest is still stacking up, what does he decide to do? Whine about it.

But I think the most disturbing part of all this is that the President is now listening to them, and has a plan to buy their votes with your money.

On Wednesday, President Obama introduced two changes to the federal student loan program that could affect several million borrowers. The broad outlines of his plans to encourage loan consolidation and assist people who are struggling financially are reasonably clear.

People with at least one federal loan that they borrowed directly from the federal government and at least one that originated with a bank or other lender. If you have a bunch of bank-issued federal loans but no loan directly from the government, you can consolidate them under an older federal program, but it won’t save you as much money.

The PLUS loans that some graduate students have taken out in recent years are eligible. Perkins Loans and many federal loans for people entering health professions are not eligible. And again, private student loans are not part of the mix here either.

Also, if you’re in default on the loans, you won’t be eligible.

Don't worry if your student loans haven't been affected by this yet. It's only the beginning.