Debt, today, seems to be part of the student condition; books, tuition, room and board are all expenses that continue to rise year after year. Meanwhile, one of the big topics in Washington is credit card debt, another social malady which has found its way into the profile of the American college student. The questionable practice of having credit card representatives on campus has come to light and much to the alarm of many parents. But there is a bigger threat to students these days that won’t be addressed in the Credit Card Holders’ Bill of Rights, as a matter of fact the predatory lending practices haunting college students these days make card holder agreements look down right honest and forthcoming. The threat to the financial futures of our students isn’t credit cards but the regulations surrounding the financing of their education.

While tuition costs skyrocket, approximately 50 percent in the past 10 years, so does the necessity for student lending in order to obtain a college degree. An economist from the Center for Economic and Policy Research, Heather Boushey, performed an analysis on college students from 1981 which showed a full time summer job at minimum wage could raise two-thirds of their annual college costs. Today a college student would have to work 40 hours a week for an entire year at minimum wage to afford one years worth of tuition from a four-year public college, according to the same study.

With student loans practically a necessity the stalled economy is illustrating the predatory nature of these loans through the stories of the dire financial situation of college grads. These are stories of ordinary students who were not able to obtain a job with a salary high enough to make the payments, if they were able to find employment at all. With their degree in hand they are now mired in massive debt leaving them worse off, financially, then when they started; it gets scarier when refinancing, hardship deferrals or defaults become part of the story.

Credit card companies will be facing stricter policies if the Credit Card Holders’ Bill of Rights is passed into law while the rules and regulations surrounding student loans make them one of the most lucrative types of loans. The problem, as described by StudentLoanJustice.org is this:

“In 1997, under intense lobbying from student loan companies, The Higher Education Act (HEA) was amended, and defaulted student loans became among the most lucrative, and easiest to collect type of debt. These amendments allow for huge penalties and fees to be attached to defaulted student loan debt, take away bankruptcy protection for student borrowers, disallow refinancing of the debt, and also provide for draconian collection and punitive measures to be taken against student borrowers…”

Consumer protections such as fair debt and collection practices, adherence to laws governing interest rates, truth in lending requirements and statutes of limitations no longer applies to student loans. Those who go on to further their education rarely plan to default, but if health issues, lack of employment opportunities or other life altering events occur resulting in a hardship deferral or default those loans could easily double, triple or quadruple due to the massive penalty fees that are allowed which also makes them nearly impossible to repay. Credit card companies have been accused of many inhumane collection tactics, but student loan companies have the added power of being able to garnish the social security of a disabled student if a loan is in default. Since they are also no longer protected by bankruptcy laws, loans bloated by fees and excessive rates are impossible to negotiate or escape; they sentence their victims to a life time of crippling debt with little hope of assistance or relief. The situation some students face is far beyond the worst predatory lending practices that led to the mortgage melt down and the staunch support of the Credit Card Holders’ Bill of Rights by president Obama, and yet no one in Washington is talking it. While companies who took unnecessary risks are receiving bail out funds, some students are languishing under the weight of loans they took out in hopes of a brighter, productive, future.

R.S., an office administrator for a financial company in Sheboygan, Wisconsin, requested anonymity due to her and her husbands professions, offers a glimpse of what the organizations who house student loans are at liberty to do.

“My husband has student loans which we consolidated about five years ago at about 2 percent and a payment of $180,” she says. Today her rate is 3.25 percent, her payment has more than doubled to $400 a month and the balance has actually increased. What spurred these changes?

“The company that housed my husband’s loans sold them to another lender; they called us up and basically said ‘we don’t offer that low of a rate or payment.’ They added transaction fees for taking over the loan and there was nothing we could do about it. No one refinances student loans anymore.” Mortgages offer protection against rate and payment hikes if the loans are sold, why are students denied the same protection? Thankfully both her and her husband have full time jobs enabling them to make the increased payment but despite having strong credit scores they were helpless to do anything except agree to the new terms. What happens to a new graduate who hasn’t acquired adequate employment let alone had time to generate a favorable credit rating?

Another example comes from Alternet.org, an independent news magazine and site. Their article entitled, College Loan Slavery: Student Debt is Getting Way Out of Hand illustrates the situation of two new graduates, Raya Golden of San Francisco, California and Rebecca Gretzinger of Green Bay, Wisconsin. Golden graduated with a degree in traditional illustration and is still searching for a full-time job besides her position as a Barista at Starbucks. What started out as $75,000 in student loans, after hardship deferrals, has ballooned into $112,000. She was able to negotiate a short-term reduced payment of $650 per month to which Golden is quoted as saying, “It doesn't even cover the interest. If I pay that for two years I'll wind up owing $150,000. But I can't see that I have any other choice.” Refinancing is not an option without a full-time job and due to the credit crunch most financial companies don’t even handle student loan refinancing.

Rebecca Gretzinger, who graduated with a Business Administration degree and a minor in Marketing, has loans that are not yet out of deferral but they soon will be and she doesn’t have the resources to pay the $640 per month they will cost. “I don't know what my plans for the future are,” she says. “But I realize now that I will never be able to have children or even a house of my own. I went to college to better myself but found myself much, much worse off then I ever could have imagined.”

Many students begin college with high dreams and aspirations for the future and rarely picture themselves being financially crippled by their education loans; America’s future is being formed today! Perhaps fewer students will go into non-profit or low paying positions; fewer will passionately pursue the path that motivated them to obtain their education in the first place. Perhaps fewer students will fulfill their entrepreneurial ambitions by creating new and innovative businesses and industries due to the risk associated with defaulting on their loans. Only time will tell what effect this will have on future generations; the question is, do we want fear and endless debt to sculpt the future of our leaders, society and culture?