Monday, December 7, 2015

Literature Review 5

Literature Review 5


Kevin Carey


Carey, Kevin. "Student Debt in America: Lend With a Smile, Collect With a Fist." The New York
Times. The New York Times, 28 Nov. 2015. Web. 7 Dec. 2015.


This is an article published in the NY times about Liz Kelley and how she was able to accumulate $410 thousand in debt.  It brings up how she took out loan after loan in and out of school.  The lender was the federal government, and has different rules then private lenders.  The article states  how Ms. Kelley was able to repeatedly take out loans while deferring her payments, not making a single payment in 25 years.  The government allowed Ms Kelley to have her debts pile up, and now with interest is states that it will take her a long time to pay back her loans, past retirement if she sticks with the same job and how she cannot declare bankruptcy- she is stuck with the loans.


"Of the 43.3 million borrowers with outstanding federal student loans, 1.8 percent, or 779,000 people, owe $150,000 or more. And 346,000 owe more than $200,000."

"A private sector lender approached by a potential borrower with no assets, a modest income and $350,000 in debt who had never made a payment on that loan in over 20 years would not, presumably, lend that person an additional $7,800. But that’s exactly what the Department of Education did for Ms. Kelley in 2011. Legally, it could do nothing else."


The article highlights a lot of what is wrong with how loans are being handled.  This is not a unique case, students take out loans to afford going to college.  But with the government pushing people to go to college and allowing them to take out loans with reckless abandon results in loans that are often unpayable.  The government allows people to take out loans, and while the alternative may be harmful to the individual, there are other options.  But instead of taking those options, the people are conditioned in to just taking out loans and then become stuck with them for the rest of their lives.  Since my paper is about student loans and debt, this was pretty much directly related.

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