Modern Indentured Servitude: the “Student Loan”

“We were so young, so in love, and so in debt.”

(Michelle Obama)Photo88792

Do we raise the interest rate on student loans or do we keep the interest rates down on on so-called student loans? In the past couple weeks, lots has been discussed–and it seems once again that those “the student loan issue” is being discretely brushed off.

Congress is still facing this issue that directly impacts 37 million Americans and indirectly effects us all.

Student debt is nearing one trillion dollars. 37 million Americans owe around $1,000,000,000, 000.00

I started college in the late 90′s. I had a scholarship that covered a more than half of my tuition, my parents assisted how they could– but wasn’t enough and so the dreaded FAFSA was filled out, submitted, and approved.

I was going to get student loans. It sounded…practical.

At 18 years old, taking out a loan was new thing. And it scared me. Sitting in on the first (required by the lenders) informational–well, hell, what do I call it? Class? Info session? Whatever you call it, those who get student lines have “counseling” (yes, the industry calls it that) sessions about student loans.  I held on to every last word.

In my adulthood, this. Was. Serious. I remember learning that my loan payments would essentially be put on hold as long as I was in school–graduate school included. I entered college already assuming I would be attending grad school (although I admit I hadn’t thought how to pay for that), so I thought something along the lines of, “Okay, I’ll be a professional when I need to pay this back. That should be okay. It might delay buying a house or having a baby, but only for a year or two.”

salliemaeIsn’t it hilarious how naive I was at 18?

I could just turn that into a sharing post–”How naive were you when you were 18?”

Really. Laugh. I am. It’s so sadly funny I seriously thought like that. I’m rather disappointed in my 18 year old self for not thinking things like:

  • What if the economy crashes?
  • What if you can’t find a job easily?
  • What if you’re discrimated against?

Et cetera and so on.

I mean, I actually believed student loans were helpful to students. I didn’t realize how corrupt they are. How wrong it is to make people go into debt to go to school. The idea that universal education at the higher levels should be free hadn’t crossed my mind–yet.

Mind-blowing quote:

“Making all public higher education free in the United States would cost between fifteen and thirty billion dollars.

That’s roughly what this country spent on air conditioning in Iraq and Afghanistan last year.”

Let’s pause and use our educated minds to think back to the Jamestown colony, and whatever else you may remember about the history of early settlers in what is now the United States.  Bound_300x200

Many of the colonists (i.e., of British or European descent) came over to the “New World” as indentured servants. For the cost of the voyage over (which was approximately the equivalent of the 4-5 years pay), the servant was provided with food, accommodation, clothing and training as they worked for the next 2-7 years (depending on the contract) as they worked off their debt. For their work, the servant received not wages, but credit toward paying down the cost of the voyage over.

Don’t forget this was a time when debtor’s prisons were around, so it’s not hard to figure out what happened to those servants who didn’t uphold their part of the bargain.

Indentured servitude is often called “white slavery” and to much extent, the comparison is apt.

Via:

The Company clearly felt that [beaten workers running away] threatened the continued survival of their enterprise, for they reacted forcefully to this crime. In 1612, the colony’s governor dealt firmly with some recaptured laborers: ‘Some he apointed to be hanged. Some burned. Some to be broken upon wheles, others to be staked and some to be shott to death.’

[Don't you just love olde-tyme spelling?]

While this sort of physical torture is not occurring over student loans, (that I’m aware of), there remain multiple similiarities between historic indentured servitude and modern-day student loans, or “modern day indentured servitude.”

Similarities:1343878168318_8335741

  • Indentured servants fluxed in numbers, but up to 2/3 of (white, European) immigrants came to the New Land as such. Approximately 60% of American students any given year will rely on student loans to further their higher education.
  • Indentured servants were predominately young and also of the working class or just  plain ol’ poor.
    Many students (but not all!) who receive student loans are young. And many are working class or poor. (But this is America, so we don’t like to talk about class.)
  • Indentured servitude and student loans rely on the idea/myth of mobility. It seems this country was fed the lie of the boot straps from the very beginning!
  • Given the nature of the debts, neither historic nor modern day indentured servitude were/are secured by property. Both were/are debt secured by personhood.
  • Indentured servitude and student loans both take a small (relative to the lender) amount and augment it thanks to rounding error  works some black magic to make this initial amount into a significant burden that will follow the person around for 30 year.
  • Both have extremely limited legal recourse.

And let’s talk about the limited legal recourse, shall we? Most debt is dischargable or at least worked into a more suitable payment plan during a bankruptcy proceeding.

Sutdent loans? Nope. Or rather:

NO! NO! NO! NO! NO! NO! NO! NO!

Student loans are immune to bankruptcy. You cannot discharge your modern indentured servitude by filing bankruptcy.  This means that student loans don’t

“have a natural protection for the consumer receiving credit (a protection, the original synthetic put option, that our Founders were aware of enough to make sure it was provisioned for in the Constitution).”

Washington, we have a problem. A very serious problem that could break the economy (again).

It’s already (figuratively) killing the young.

More reading:13426-312-Infographic on Student Loans_r6

4 thoughts on “Modern Indentured Servitude: the “Student Loan”

  1. That is so true – student debt is the modern version of indentured servitude. 30 years man, 30 years, that’s serious!
    I was fortunate to grow up in a socialist country where education was free. It may not have been the best education there was, but it was completely free and decent enough to get me a PhD at a top US university (which is also free). Thanks to that, I have never had any debt and I feel freer and richer than many of my friends making a lot more than me… It’s really sad.

    That quote about the cost of air conditioning made me sick to my stomach. There is so much wrong with this country when it really could be the greatest country in the world…

  2. The idea that universal education at the higher levels should be free hadn’t crossed my mind yet.

    It crossed mine, because my college education was pretty much free. (I had a very generous scholarship to my flagship State U.) I went there because their offer covered pretty much everything, and I knew I didn’t want to take out any loans. Debt terrifies me, because I’ve never had faith that I’d be able to pay it off.

    • Lindsay, first of all, congrats on the scholarship you earned! Well-done!

      I’m curious when you applied to school, and if that makes any difference? I know when I started in ’98, it wasn’t a big deal.

      Thanks to my own scholarship, I have a much lower than the national average loan amount. I didn’t take anything out for grad school, either.

      I’m also curious as to what state you attended school. For me, state school meant, well, not the education I needed.

  3. Pingback: Student Loans: It Gets Worse | Everblog

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