Slavery by Debt – School Loans and More…

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An infamous document, the “Hazard Circular,” American and British banking interests discussed the advantages of debt slavery over physical slavery. These interests favored the former, as the latter came with costs (e.g., housing, food, medical care, etc.).

A “free” people housed and fed themselves. And, a “free” people could be kept enslaved by debt, through wages insufficient to meet their cost of living, as the amount repaid exceeded the amount lent.

Such slavery continues today in many different forms. Of particular importance to us is the plight of college-bound students and their families.

College graduates leave campus with a handshake, a diploma, and an average of $37,000 in student debt. Even more, if you include private loans co-signed by their parents.

Our government’s student loan portfolio totals almost $1.4 trillion. Student debt has increased by approximately 164% in 25 years, while median wages have increased by under 2%.

Unlike other consumer debt, student loan debt must be repaid. Bankruptcy, absent the direst of circumstances, is not an option.

Students assume the debt burden on the promise that their degrees will lead to jobs that will provide the means for repayment. Unfortunately, the jobs may not be there or, if they are, the pay is not enough to meet expenses.

Based on recent statistics, five years after leaving school, nearly one-third of borrowers have been unable to pay down their debt. While not in default, their payments have consisted only of interest. This can mean a lifetime of “slavery” if the loan remains unpaid.

Human nature dictates that a debt that can’t be paid won’t be paid. If default occurs, it damages credit and limits the ability to borrow for such things homes, autos, furnishings, etc.

Pretty depressing picture we just painted, isn’t it?

What, then, can be done to relieve the school debt burden on both the students and their families?

Consider looking into our debt elimination program, a program we will ask (i.e., require) every college planning client to implement. Why would we require it?

Because the families who implement and follow it typically eliminate all debt, including mortgages and school loans, in 9 years or less, without spending more than they currently spend and with little effect on their current lifestyle.

Contact our Professional College Planners for more information.