Top Ramen For Life: The Student Loan Crisis 

With more than two-thirds of students borrowing money for their educations, student loans are now the largest type of consumer debt. Is this another crisis in the making?

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The Future For the Debt-Ridden

Student loan borrowers like Kyle McCarthy, Cindy Warner, and Thomas Keith have begun to mobilize. They are members of the Student Loan Justice network, a grassroots organization and political action committee, which has chapters in major cities across the country. Their efforts are part of a national movement seeking to bring student debtors out of hiding and to begin actively calling for reforms. They lack the financial means that make their opponents — the student lending industry — so difficult to fight. But they have on their side swelling numbers, growing support, and the hope that one day things will be better.

There are signs of change. Student loan advocates agree that the elimination of the FFELP was an important step toward making loans simpler and cheaper for students. Additionally, private, for-profit colleges have come under intense scrutiny of late. Soon, they may have to meet certain requirements for placing graduates in employment in order to continue receiving federal aid. Borrowers with private loans may also see some relief if the Private Student Loan Bankruptcy Fairness Act of 2010 and the Fairness in Lending Act make it through the House and the Senate. Holders of federally issued loans have gotten help as well through recent improvements to the Income Based Repayment program, which have lowered monthly payments and dropped the length of time required before a debt is discharged from 25 years to 20.

In the meantime, however, McCarthy is too frightened to actually see how much he owes. He has to continue working at Borders in order to keep his health insurance, even though his injury flares up at night, giving him pain.

Mostly, he tries to avoid collection agencies. "At this point, I get called every single day," he said. "I don't even know where they're coming from. I don't even know how much I owe, because the emotional stress is so unbearable. Obviously I don't have seventy or eighty grand. And it's just — it's just crazy. To even think about it makes me feel horrible. That's not why I went to school."

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