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A Sleeping Class
The idea for a student PAC started in neighboring Virginia, where in 2002, students at William and Mary formed Students of Virginia to help pass a $900 million bond issue for higher education.

A Sleeping Class
Yet its clout is dwarfed by that of the big student loan companies—it spent $20,000 on lobbying in 2000, as opposed to $1.5 million spent by Sallie Mae.

Ambition Tax
And over a third of student borrowers are simply not prepared to meet their debt service obligations once they've left campus.

Ambition Tax
Aspiring doctors have it the worst, with average loans of $103,855.

Ambition Tax
Given the Kid's low pay and high debt service, there's a good chance he'd join the 17.9 million other 18-to-34ers who lack even the most basic health insurance.

Ambition Tax
In 1980, the average Pell Grant covered 77 percent of the cost of a four-year public college; to-day, it's just 40 percent.

Ambition Tax
Kathryn Rube of the Public Interest Research Group's Higher Education Project says surveys reveal that nearly 40 percent of these debt loads can be classified as unmanageable"—in order to service the debt, recent graduates must fork over more than 8 percent of their monthly income."

Ambition Tax
Last year, student defaults hit an all-time low of 5.4 percent, down from a 1990 peak of 22 percent. The downward trend, of course, didn't come about because students are carrying more manageable debt loads. Rather, the federal government got a lot more aggressive about pursuing deadbeats and using collection agencies to force payment.

Ambition Tax
median debt for grad students has increased 72 percent since 1997.

Ambition Tax
On average, people who had to borrow their way to a graduate degree are already behind $45,900.

Ambition Tax
The average student loan debt for an undergraduate like the Kid is $18,900, up 66 percent since 1997; over the same time period, by way of comparison, per capita income in real terms increased by just 8 percent.

Ambition Tax
The twin burdens of debt and after-hours work, piled atop the rigors of hitting the books, are a big part of why 600,000 undergraduates drop out of four-year schools each year.

Borrow more now! Pay more later!
Consolidations have tripled in the past four years, to $43.7 billion in fiscal 2004, and such loans now make up about a third of the total annual volume of student debt.

Borrow more now! Pay more later!
The average $20,000 student loan burden, locked in at today's low rates, costs around $7,700 in interest. If rates eventually peak at 7 percent, as forecast by the Congressional Budget Office, that interest bill would go up to $17,000, rivaling the amount you borrowed in the first place.

Borrow more now! Pay more later!
Typical consolidators are young—60 percent are under 35—and have fairly low-income jobs, like nursing or teaching.

College on Credit
An increased number of borrowers feel more burdened by their education debt, with about a quarter of the borrowers perceiving themselves as having significant problems.

College on Credit
Fifty-four percent also say they would borrow less if they had to do it over again, up from 45% in 1997.

College on Credit
For those who used alternative loans and did not go on to graduate school, 23% report accumulating more than $40,000 in total debt, compared to 5% of those who used only federal loans.

College on Credit
Law and medical student borrowers report an average accumulated debt from all years (undergraduate and graduate study) of $91,700 while the average combined debt for all graduate students is $45,900.

College on Credit
Students attending graduate school borrow, on average, an additional $31,700 beyond their undergraduate borrowing, an increase of 51% since 1997.

College on Credit
The average undergraduate debt is $18,900, up 66% from $11,400.

College on Credit
The median debt level for graduate school borrowing is $23,700, an increase of 72% since 1997.

College on Credit
The median undergraduate debt rose 74% to $16,500 from $9,500.

College on Credit
Thirty-one percent of respondents are on alternate (graduated, income-sensitive, extended or consolidated) payment plans, far more than the 17% on alternate plans in 1997.

College on Credit
Those who say they feel burdened by their education debt increased to 55% from 50% in 1997.

Debt burden of college graduates
Bachelor’s degree recipients in 1999–2000 were more likely than their 1992–93 counterparts to have borrowed to pay for their undergraduate education (65 vs. 49 percent), and if they had done so, to have borrowed larger amounts, on average ($19,300 vs. $12,100 in constant 1999 dollars). This includes all student borrowing, but not borrowing by parents.

Graduate and Professional Borrowing
Among those with monthly student loan payment-to-income ratios exceeding 10%, 76% of borrowers say they feel extremely or very burdened, while only 41% of those with low ratios gave this response.

Graduate and Professional Borrowing
Eighty percent of graduate student respondents borrowed to finance their studies, with median debt for graduate students (including any undergraduate debt) equaling $20,300 (average debt was $28,500), compared to a median of $12,500 for those who did not go on to graduate school.

Graduate and Professional Borrowing
Low-income graduate borrowers are much more likely to feel burdened by their loan payments, with 65% answering 1" or "2" (extremely or very burdened) on a 5-point scale, compared to 47% of those earning at least $35,000."

Graduate and Professional Borrowing
Most of these borrowers feel very burdened by their student loan payments.

Graduate and Professional Borrowing
Sixty-five percent of those with low earnings and high debt in typically high-earning fields say their loans are causing them more hardship than anticipated, compared to 52% of borrowers in typically low-paying fields.

Graduate and Professional Borrowing
Those with high ratios are also significantly more likely to say they are experiencing more hardship than they anticipated (53% versus 23%).

Graduate and Professional Borrowing
Twenty-two percent use over one-fifth of their monthly income to repay student loans.

Greed Aid
According to President Bush's latest education budget, loans made through FFEL in 2004 cost the federal government $12.09 on every $100. Direct loans cost just 84 cents.

Greed Aid
According to the Congressional Budget Office, even a modest expansion in the Direct Loan Program could save up to $12 billion in the next 10 years.

Greed Aid
For Sallie Mae, which dominates the student loan market, profits ballooned from $384 million in 2001 to $1.3 billion last year. And every dollar it lends is still underwritten by the federal government.

Greed Aid
Only about 1,200 colleges now use direct loans, making up about 30 percent of total loan volume.

Greed Aid
Since 1994, student loan volume has nearly quadrupled to $85 billion annually, and it's still growing.

Greed Aid
Student lenders are some of the most profitable companies in the country.They pad their bottom line by trading loan portfolios and marketing private or alternative" loans at higher interest rates."

Life after debt
25% of undergraduates who attended four-year private institutions, compared to 21% of those who attended four-year public institutions, have student loan debt greater than their current incomes.

Life after debt
About 40% of students who did graduate work in medicine, law or business have student loan debt levels exceeding their current salaries.

Life after debt
Average debt in 1997 (for a sample consisting of 65% undergraduates and 35% graduate students) is $18,800 (compared to $8,200 in 1991). Median total debt (half higher, half lower) is $13,000.

Life after debt
Average percentage of borrowers' monthly income which goes towards student loan payment is 12% (median is 8%).

Life after debt
For example, between 1984 and 1997, medical students' borrowing increased by 248% while their starting salaries only increased by 68%.

Life after debt
In 1997, 40% of borrowers said that their debt had caused them to delay buying a home, up from 25% in 1991; 31% said that they had delayed purchasing a car due to their student loan indebtedness, compared to 16% in 1991; 22% said that their student loans had caused them to delay having children, up from 12% in 1991.

Life after debt
Since Nellie Mae's last study was completed in 1991 (The New England Student Loan Survey, Pedalino et al, 1991) the average total debt level for student loan borrowers rose from $8,200 to $18,800 in the 1997 NASLS survey, an increase of 129%.

No Exit
In the 20-year period from 1977 to 1997, tuition increased by 304 percent, student-loan borrowing by 704 percent, while the level of grants and financial aid remained stagnant.

Sallie Mae not
Furthermore, Sallie Mae has recently gone into the debt-collection business, which means it can reap even more interest and fees of up to 20 percent of the balance from defaulted borrowers.

Sallie Mae not
In addition, more than a million borrowers have seen their monthly payments increased by as much as $100 or more, due to what the company describes as a computer-software glitch, and will see their overall payoff amount increased if they want to extend their loans to keep their monthly payments level.

Sallie Mae not
Interviews with 22 consumer-finance attorneys, plaintiffs in lawsuits against Sallie Mae, consumer advocates, and higher-education experts show that Sallie Mae engages routinely in questionable business practices.

Sallie Mae not
Moreover, tens of thousands of students enrolled in failed, improperly licensed computer-training schools are being held accountable for their loans — even though student lenders are required by law to make sure the schools they loan to are properly licensed.

Sallie Mae not
President Bill Clinton established the William D. Ford Federal Direct Loan Program, in 1994, which offered borrowers a low-interest alternative with no origination fee (a three-to-four-percent charge lenders take off the top), an income-contingent repayment option, and more streamlined servicing. In other words, by removing the middleman, the Department of Education offered cheaper, more convenient loans.

Sallie Mae not
Today, Sallie Mae has $86 billion in assets, nearly double its worth in 1994.

Student debt
According to Department of Education data, nearly 40 percent of recent college graduates with student loan debt make monthly payments that are unmanageable, according to the student loan industry's own recommendations.

Student debt
Current Congressional legislation, H.R. 609, would reduce origination fees from 3 to 1 percent, but this change would not fully occur until 2010.

Student debt
In 2001, Congress passed legislation to ensure that students wouldn't be forced to pay more than 6.8 percent on their student loans starting in July 2006. Now, Congress is proposing rolling back this change and keeping the interest rate cap at 8.25 percent.

Student debt
In the mid-1980s, financial aid associations set a benchmark of an 8% student loan debt to income ratio as the point above which burden does occur. Average student loan debt burden is now 10% of borrower income.

Student debt
The Congressional Research Service estimated last year that the average undergraduate borrower would pay an additional $5,500 in interest costs under this change.

Student debt
Today, the average undergraduate borrower leaves school with nearly $20,000 worth of student loan debt.

Student Loan Debt
Between 1994-95 and 1995-96, PLUS borrowing increased 29%.

Your Misery Is Their Profit
According to political contributions compiled by The Chronicle of Higher Education, sources affiliated with five big student lenders have given more than $400,000 to members of the House Committee on Education and the Workforce in the 18-month period ending in July 2004, with 75 percent going to Republicans.

Your Misery Is Their Profit
Around 5 percent of students default on their school loans, compared with just over 1 percent of home owners who miss mortgage payments to the point of foreclosure.

Your Misery Is Their Profit
As recently as 2001, student loan providers sold just $11 billion in bonds. That figure rose above $27 billion in 2002 and hit $52 billion last year.

Your Misery Is Their Profit
Critics cite a May report by the General Accounting Office that shows cash outflow for the direct-loan program exceeding inflow by about $10.7 billion between 1995 and 2003.

Your Misery Is Their Profit
Critics of this measure say that it would force the average student with $17,000 in debt to pay $5,500 more in interest over the life of his loan.

Your Misery Is Their Profit
Despite the change in Sallie Mae's corporate classification, this year 90 percent of the company's $98 billion in student loans are federally insured. And the company can now act as lender, servicer, and collector.

Your Misery Is Their Profit
Each year, 13 million people apply for federal student aid; the Department of Education expects to grant about half those petitions in loans this year, to the tune of $52 billion.

Your Misery Is Their Profit
Its chief executive, Albert Lord, has collected about $10 million in bonuses since he rallied support in 1997 to make Sallie Mae fully private.

Your Misery Is Their Profit
It's evidenced that the fat is there, said Robert Shireman, a former Clinton education aide. He's crusading to have the government's direct-loan program replace the guaranteed program. "The government takes all the risk, and we give away the profit."

Your Misery Is Their Profit
Meanwhile, the U.S. is experiencing a population explosion among 18- to 24-year-olds that rivals that of the baby boom generation. All of these trends are playing right into the hands of the nation's big student lenders.

Your Misery Is Their Profit
Sallie Mae has roughly doubled its profit in each of the past three calendar years, closing out 2003 with a net profit of $1.53 billion on $89 billion in student loans managed.

Your Misery Is Their Profit
Shireman calculates that if all of the loans given between 1995 and 2003 had been direct, then the government would have saved more than $20 billion, or enough to give an extra $4,000 grant to every low-income student in college today.

Your Misery Is Their Profit
The bonds are an easy sell because most student loans are 98 percent guaranteed by the U.S. government.