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Debt for Diplomas: The Crisis of Student Debt by Nat Sowinski twitter: @natsowinski | email: natsowin@gmail.

com Column | Thought Control Caf The Daily Targum | This Thursday, April 25th, marks the one-year anniversary of 1 Trillion Dollar Debt Day the day that the total amount of student debt in America reached 1 trillion dollars and things havent gotten much better since. The amount of student loan debt in America has surpassed total credit card debt but, unlike credit card debt, these loans cannot be discharged by declaring bankruptcy. In many cases, private lenders do not forgive loans even if the borrower dies. After the death of Christopher Bryski, an undergraduate at the University, KeyBank asked his parents to assume responsibility for the debt. KeyBank only forgave his debt after public pressure via an online petition with over 78,000 signatures. Much like the American mortgage crisis, student debt in our country has formed an economic bubble and, like the mortgage bubble, this bubble is in danger of bursting and sending our country into another economic crisis. Since the government backs most student loans, the risk rests on the backs of public and this risk is getting riskier. Student debt is increasing in risk as a result of immense volatilities and restrictions on economic growth, which, in turn, are a result of the increasing burden of the cost of tuition and student loans. A staggering number of college graduates face unemployment after entering the job market. According to a report by the Center for American Progress, the unemployment rate for young Americans between the ages of 16 and 24 is at 16.2% a number that is over double the national unemployment rate. Its bad news that many graduates wont have jobs and therefore wont have the means to pay back their loans. And nothing hampers economic growth quite like being too poor to pour money into the economy. To make matters worse, some institutions are profiting off of student debt namely Sallie Mae, the nations top private holder of student debt (totaling over $160 billion and 20% of total debt). Where does the profit money go? According to the Valley Advocate, Sallie Mae CEO Albert Lord has received $225 million in compensation between 1999 and 2004, and, according to the Baltimore Sun, Lord built himself a private 18-hole golf course in 2007 money made from students who struggle to pay their loans. This is unjust. Sallie Mae lobbies the federal government with the purpose of loosening restrictions and expanding their profit margin. In a Center for Responsive Politics report, Sallie Mae was found to have spent 27 million dollars on lobbying since 2002. Much of this lobbying is centered around increasing interest rates on student loans.

On July 1st, interest rates are set to double from 3.4 percent to 6.8 percent if Congress and the American people do not take action. This would result in an increase in Sallie Maes profit margin. If doubled, consequences for students and for the economy will be dire. Such consequences that are national in scope are not disconnected from New Jerseys economy or even the University. After the Universitys merger with UMDNJ (which came after pressure from Governor Christie and state legislators), millions of dollars in debt were absorbed with little foresight into the means of paying it off. Despite his pressure to pass the reorganization bill, Christies $1.38 billion higher education budget for the next fiscal year sets aside no money for the reorganization plan, according to a Friday article in The Star-Ledger. The amassing of hundreds of millions of dollars in UMDNJ debt is a huge concern to students at the University, especially the debt burden falls onto the backs of students in the form of tuition increases. According to an NJ Spotlight article, both Christie and Barchi have promised that the cost will not be borne by students in higher tuition bills. Students can raise their voices to ensure that this claim is followed through. This Thursday, April 25th, is One Trillion Dollar Debt Day. It is also the day that the Universitys Board of Governors convene in a meeting and hear from students about tuition increases. The meeting will be in the RSC at 6:30pm. This is a call to action. Come rally in Brower Commons at 6pm on Thursday. Tell the Board of Governors that students cannot bear this burden. Speak up to demand an end to the tuition hikes!