Students stuck with gargantuan loans for life are bound in a bank-dominated "improvement" of indentured servitude.
By the time of the Revolutionary War, indentured servitude had been a common practice in the United States for 150 years.
Following British laws established during the colonial period, post-Revolutionary public authorities indentured the labor of those who were likely to fall upon the public dole. Appalachian county governments bound out indigent adults and children whose families could no longer care for them. The age, gender, and racial trends are clearly documented in early records of Appalachian poor houses, for women and orphans represented more than two-thirds of the individuals whose labor was auctioned off by county governments.
Isaac Miller of Anderson County, Tennessee, advertised in 1819 for the return of Margaret Hutcheson who had been bound to him by the county poor house. Obviously, the seventeen-year-old girl had tried the patience of her master, for he offered only "a reward of 6 1/4 cents to the person who w[ould] deliver her to [him]," caustically adding, "but I will not thank any person for doing so."
When an orphan was bound out by the county poor house, the child was legally tied to the master until the age of eighteen or twenty-one.
Orphans were often bound to tradesmen or farmers until age 21, and indigent adults were typically bound for three to seven years. However, there is no way to document how many laborers were bound out by their own families. When parents indentured their own children, it was for "a usual term of seven years if a girl, or five if a boy."
Lenders have little risk of losing money on the loans, unlike mortgages made during the real estate bubble. Congress has given the lenders, the government included, broad collection powers, far greater than those of mortgage or credit card lenders.
The debt can't be shed in bankruptcy.
The credit risk falls on young people who will start adult life deeper in debt, a burden that could place a drag on the economy in the future.
"Students who borrow too much end up delaying life-cycle events such as buying a car, buying a home, getting married (and) having children," says Mark Kantrowitz, publisher of FinAid.org.
"It's going to create a generation of wage slavery," says Nick Pardini, a Villanova University graduate student in finance who has warned on a blog for investors that student loans are the next credit bubble — with borrowers, rather than lenders, as the losers.
The University of Phoenix, the nation's largest, got 88% of its revenue from federal programs last year, most of it from student loans.
My Big Island Girl(fun, free MP3 song)
Order Survival+: Structuring Prosperity for Yourself and the Nation (free bits) (Kindle) orSurvival+ The Primer (Kindle) or Weblogs & New Media: Marketing in Crisis (free bits)(Kindle) or from your local bookseller.
|Thank you, Alberto R. ($20), for yet another gloriously generous contribution to this site -- I am greatly honored by your longstanding support and readership.||Thank you, Richard B. ($10), for yet another superbly generous contribution to this site -- I am greatly honored by your steadfast support and readership.|