Dear US Government: I’ll Pay Back Student Loans If You Set a Positive Example

Along with the joy, relief, and mega-keggers I plan to throw once I get my master's degree in a couple weeks, there comes a new, looming business item to take care of: all of the student loans that have been peacefully sleeping in deferral for the past two years will soon rear their ugly heads. And as it turns out, all sorts of terrible things could happen to me if I don't pay them off:

  • You will not be eligible for any further federal student financial aid.
  • Your employer, at the request of the federal government, can withhold (garnish) part of your wages and forward them to the federal government.
  • Your account will be reported delinquent to credit bureaus, which can damage your credit rating.
  • The entire unpaid balance and accrued interest on your loan could become immediately due and payable.
  • Your account will be turned over to a collection agency. Court costs, collection fees, attorney's fees, and other costs may increase your total debt.
  • The federal government can impose a federal offset, which includes tax refunds, social security payments (up to a specified percentage), veteran's benefits, and federal government pensions.

And finally, and most ominously:

  • The federal government can take legal action against you.

Well, I have a bone to pick with the US government. My debt isn't even condensation in the bucket compared to theirs. It isn't even a single water molecule. According to this article, Why The U.S. Needs To Stop Dodging The Debt Bullet, "Today the U.S. government officially borrowed beyond its $14.29 trillion statutory debt limit." Interesting history lesson: "[A debt] ceiling was first imposed in 1917 as part of a deal that passed the Liberty Bond Act that funded America's entry into the First World War. To make it easy for the Treasury to sell those bonds, Congress also amended the Federal Reserve Act to allow the Fed to hold government bonds as collateral. But given the potential for unchecked Federal deficits, Congress sought to limit taxpayer exposure to $11.5 billion."

In this article, we learn that "In April, ratings agency Standard & Poor's downgraded its US credit rating outlook from stable to negative, increasing the likelihood that the rating could be cut within the next two years." Question: how can the US expect its citizens to be upstanding, maintain good credit, and pay back their student loans when they can't set a reasonable example? (By the way, I see the paradox of the fact that yes, I borrowed from the US government and added to their debt -- but I will pay it back, with interest). Details like that aside, I think we need to look at the bigger picture and examine large-scale financial behavior over the long haul. Children learn to manage money from their parents and -- as far as I'm concerned -- citizens learn from their country as well. If there's no limit on borrowing, loans are defaulted, and credit ratings gradually deplete, what gives me faith that paying back the money I borrowed will be used in an effective manner?

That would be my elected representatives working in their constituent's interest. Hmm. Ok, enough ranting. Gotta somehow figure out how to earn enough money to pay back these loans. Guess I had better cancel that graduation party.

- Sheena Moore

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