Student Loan Debt – The Most Oppressive Debt on the Planet
Some people use the adjective “good” to describe the debt students take on during the pursuit of their college diploma. We would use a different word to describe it:
A quick check of the dictionary has this to say about the adjective oppressive:
1. burdensome, unjustly harsh, or tyrannical.
2. oppressive sorrows, causing discomfort by being excessive, intense, elaborate, etc.
3. distressing or grievous:
So now I am sure some of you would insist that we are being a tad bit excessive with our rhetoric, that we are invoking extreme levels of hyperbole in our use of the word oppressive. We would suggest you need to think again.
As proof positive, today we learned that 42 Tennessee nurses have had their licenses suspended because they were in default on their student loans. That’s correct, 42 nurses lost their ability to actually earn a living in their field of study because they had not paid off their loans.
A disciplinary action report released this month by the Tennessee Department of Health made this issue public. Though only brought to light now, the report revealed the large number of suspensions actually took place last October.
The suspensions were based on the actual implementation of a law that dated back to 1999. At that time, state law was enacted that allowed officials to revoke the professional licenses of those in default on their student loans.
That bears repeating, the law has been in effect for the better part of ten years but state authorities were just now getting around to cracking down on those students that were delinquent. The Chattanooga Times goes on to note that 20 of the nurses have been able to work out repayment plans and have subsequently been reinstated. Of course that also means that the other 22 have not done so.
Across the state of Tennessee, since the recession began in 2007, loan default rates have risen to about 9 percent. This means that one of every eleven students in the state is in default.
Of course, the basic assumption that the local authorities make (read the article) is that these individuals are simply not taking their responsibilities seriously. That could well have been the case with the 20 who were able to square things away immediately.
But it could well be a different story for the other 22. Perhaps they were not simply ignoring their loans but instead had reached the position where they were over-committed and thus unable to pay their loans along with their basic living expenses. Nurse salaries being what they are, that could just as well be the case.
Need to Limit Your Debt
We have noted on many occasions the importance of limiting the amount of money students borrow for their education. We have expressively made mention of the need for students to understand the terms of student loans prior to signing on the dotted line.
When you borrow money for a car and default, you lose the car, your down payment and any money you paid to date on the vehicle. When you borrow money for a house and default, you lose the house, your down payment and any money you paid to date on the house.
In both cases, your credit rating suffers as well. But in both instances, the debt does not follow you – instead you can keep your wages and your job and thus move on with life.
Not so with student loans. They will follow you. If you default on your student loans the IRS can withhold your tax return and the government can garnish a portion of whatever you earn to make payments on the loan. And, as noted in the Tennessee case, the government can go so far as to revoke your ability to earn a living in your chosen field by suspending your professional license. We suspect that the situation in Tennessee is harbinger of more to come in this arena.
In very simple terms, student loans are unlike any other form of loan you can take out. And if you find yourself in tough economic straights, well then it appears you would then be privy to why we call student loans oppressive.