Students arrested at Sallie Mae headquarters in DC

Student unrest erupting over oppressive student loan debt!

About three dozen student activists were arrested Monday during a protest outside the Washington headquarters of student loan provider Sallie Mae, according to participants.

The demonstration was part of an annual legislative conference by the U.S. Students Association, which ended Monday with a "Lobby Day." That event usually consists of a march to Capitol Hill and meetings with congressional representatives, but because of the outcry over student loans and the challenges of student debt, the protest at Sallie Mae was added to the schedule.

Angus Johnston (@studentactivism) reported that the arrested students attended schools including the University of Central Florida, University of Oregon, Massachusetts, University of Wisconsin-Madison and Rutgers.

The arrests didn’t stop the student group from holding a Capitol Hill news conference with Rep. Karen Bass (@RepKarenBass) of California, calling for legislation to prevent interest rates on some student loans from doubling this summer. Bass said the increase will cost the average student about $2,800 in higher interest payments alone.

Students already facing five- to six-figure debt load
And many students or recent graduates can't imagine even higher payments.

"I will be dead before I pay off my loans," said Katherine Gotthardt, who owes more than six figures and whose monthly payments are about $1,500. "The loans have affected my debt ratio and credit and impact how much money I can earn because if I earn over a certain amount, the government will take more and I will end up earning less than I am now."

While the real estate market, the foreclosure crisis, unemployment and gas prices have dominated the economic news in recent years, student debt has emerged as another challenge to the recovery.

With increases in college tuition, declines in state funding, and the growth of for-profit schools, more and more students are taking out larger and larger loans to pay for college. According to a report from a non-profit, The Institute for College Access and Success, the average amount of college debt for graduates today is $23,000. That amount is up 24 percent since 2004. These high levels of debt may make it difficult for new graduates to afford a car or a house or start a family.

President Obama acknowledged the issue in his State of the Union address in January, when he noted that total student loan debt now exceeds total credit card debt in the country. Reports last week pegged the actual number of outstanding student debt at more than $1 trillion. Obama’s proposed budget includes a series of proposals to help ease that burden by providing more funding to colleges and student loan programs.

"Colleges need to stop running as a businesses and start running as institutions for higher learning again," said Lauren Welker. "There is no reason for school to cost as much as it does these days."

Welker, who graduated from the University of Texas in May 2010, earns about $2,000 a month after taxes. Her monthly student loan payment is $1,154, and she estimates it will take her another 12 to 15 years to pay off the loans.

" barely have enough for rent and groceries," she said. "I do not have money to put away for retirement. I do not have money to buy a house, or to buy a car. I continue to live as a poor college kid, and probably will continue to do so well into my 30s."

Managing expenses: Critical but difficult for students

Kasey Oliver graduated in 2009 from the Illinois Institute of Art in Schaumburg. She received about $15,000 worth of grants and scholarships and worked part-time minimum-wage jobs throughout college to help cover some expenses. But she still had to finance almost 90 percent of her college expenses with student loans.

"I mistakenly took out extra loan money to help pay for housing, health expenses, and to pay for fixing and towing my junk car," she said. "I wish I had been more in tune with my finances in college. If I had known then what I know now, I would have done it all differently."

Alexandra Dellas graduated from Hiram College in Ohio in 2010 with about $19,500 in debt. That covered only about 14 percent of her college expenses because she received a number of academic scholarships, worked on campus and during the summers and kept her expenses as low as possible. “I wouldn’t buy new clothes or anything I wanted - just whatever I absolutely needed. “

Dellas has deferred her payments because she is currently in graduate school but estimates she’ll be able to pay off the loans in about five years."
"I know that it will affect my ability to buy a house, but it may also help my credit,” she said.

Others aren’t so lucky. Oliver, who lives in Norfolk, Va., pays about $360 a month on her private student loans, and won’t pay them off for another 23 years. Her federal student loans are covered under an income-based repayment plan, which means that she does not have to make any payments currently, but if those are eventually forgiven, she will have to report them as taxable income.

Movie draws attention to the topic
The issue is even the subject of a 27-minute movie, "Default: The Student Loan Documentary," which was produced several years ago. Filmmakers organized a “week of action” campaign in which the movie was screened at hundreds of colleges in late February and early March. It was also shown during the U.S. Students Association conference in Washington, and a full-length version is in the works.

Earlier this month, U.S. Rep. Hanson Clarke of Michigan introduced legislation that would forgive student loans for graduates who have made payments totaling at least 10 percent of their discretionary income for 10 years.

Part of the challenge for students is that even though they don't have to make payments on their student loans while in school, interest often starts accruing and then may continue to accrue faster than they can pay down the principal.

Denise Smith, for example, graduated in 1999 with about $50,000 in student debt but now owes $104,000. Her monthly payment is about $800, but she never made more than $49,000 a year since graduation and has been unemployed for 14 months.

"I am currently 52 years old and will never be able to afford retirement," she said, "And the older I get the less chance I have of being hired -- talk about being between a rock and a hard place!"

See more like this at