Posts Tagged ‘Student’

What is required from a US employer willing to hire a “Work&Travel;” program participant with a J1 student visa

What is required from a US employer willing to hire a “Work&Travel;” program participant with a J1 student visa

The are only a few requirements that a US business has to meet in order to hire a J1 visa student, participating in Work and Travel program.

And there are much more myths, which we’ll dispel.

REQUIREMENTS:

1) Qualifying jobs.  The list of seasonal positions you can cover with foreign J1 students is extensive. Please click the link below the article for a detailed list of job categories*. Only a few job types are restricted for Work And Travel students: childcare, medical/patient care, domestic work (such as a housekeeper in a family’s home), camp counselors, flight attendants, and any job that jeopardizes the student’s well-being and/or safety.

2) Working hours. Employers have to meet the minimum number of hours per week indicated in the employment agreement form. Usually students are looking for a minimum of 32-35 hours/week and are happy to work overtime. There is no requirement as to working schedule. It can be flexible,including weekends.

3) Hourly wage. You must pay international staff adhering to State and Federal Minimum Wage laws. The minimum hourly wage has been .25 since July 24, 2009, for employees covered by federal minimum wage provisions. For workers receiving tips, employers are only required to pay a minimum direct wage rate of .13 per hour, “if that amount plus the tips received equals at least the federal minimum wage, the employee retains all tips and the employee customarily and regularly receives more than a month in tips,” according to an article by the federal Department of Labor’s Fair Labor Standards Act adviser. More information about wages here.

MYTHS:

Myth 1) Employers need to pay a lot of money to bring international students Hiring international j1 visa students is free. You only pay students wages.

Myth 2) Employers have to provide students with housing Students are required to have their own housing arrangements before arriving to USA. However any paid or unpaid housing option makes your job more attractive for a bigger number of potential candidates, which means bigger choice of students for you.

Myth 3) Employers have to pay students transportation costs Students are responsible for paying their own transportation costs to and from USA, to and from workplace.

Myth 4) Employers need to have at least 25 employees on payroll This requirement is only true to Internship program, where students are coming for a year to cross train in different departments. J1 visa students, participating in Work&Travel USA program are coming for maximum of 4 months, 3 times a year to work full time at any entry level job. There is NO “minimum employee number” requirement for employers hiring these students.

Myth 5) Employers need to sponsor students’ J1 visas J1 visa students, participating in Work&Travel program are coming to USA already sponsored by a special organization, called program sponsor, responsible for monitoring students status in USA. program sponsor does NOT provide students’ employment.

Begin hiring best foreign students now!

Why wait? You can start choosing best candidates for your business up to 6 months before they start working. We are already placing students for 2012 season! J1 visa students start applying to the Work and Travel program 7-9 months before their actual arrival date, so we recommend to make an approximation of how many positions you will need and start considering resumes. Contact Wollt Recruiting to provide job description by email, skype or phone call, or Detailed list of job categories

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Quality Education lands a student to a prestigious job

Quality Education lands a student to a prestigious job

Education is the basis of every development of a person as well in the overall growth of the economy. Students need to be instilled with quality education, which in turn helps in framing the future of the student. The students have to be very careful in choosing the course or the education field for their career, which forms the basis for the student to decide his career. While selecting the candidates for interview, the education background is the main criteria on which the candidates are judged. Choosing a school is not in the hands of the child, but the admission into colleges for higher education is in the hands of the student, therefore, the decision should be taken wisely. The admission into good colleges is also not an easy job, a lot of hard work and mind has to put in, to produce good results.

Securing Jobs in good and prestigious organisations is though tough, but once cracked, it sets the future of the student. Big organisations are very finicky about the name and the status of the institute from which the student is coming from. In fact jobs through campus placements are also done in only renowned colleges of the country. Acquiring good Jobs in India as well as abroad, becomes far easier, if the candidate is hailing from a prominent college. Today jobs are not only the result of the entrance tests passed, times have come again, when the students are judged on the basis of the degrees and names of college and universities, they carry in their certificates.

Giving job to a candidate who is from a renowned college of the country is preferred, because the entrance to these colleges in itself is so tough, that any student who passes out from these college is surely a brilliant and an intelligent mind, who have to ability to add a lot more to the profits of the organisation. Colleges like ISB, IIM, IIT, are said to produce the cream of the society, so the companies hiring from these institutions are surely very choosy about the selection of the candidates. Education Job is one of the aim of a student, after he completes his education, so to reach the goal, a student should make a proper plan to catch hold of a job opportunity which defines a proper planed future for the student.

A well defined plan and execution accordingly, can definitely help the student in achieving his dream job. The very first and most important step of reaching the goal job is to take admission in a renowned college. Even the pay package offered to such candidates is comparatively high, leading to a lavishing lifestyle. The very first step taken by the student, i.e. taking admission in the college for higher education is the primary and the most important requirement for grabbing good job opportunities.

Therefore, to have a well settled and a flourishing career, a student has to prepare from the starting and give his maximum efforts to produce the best of the results. Today, the competition has increased so much, that every organisations, wants its candidates to be the best among the lot, so that they help in making the organisation reach the top and beat the competition. Each job taken by the student is a step towards the accomplishment of the dream of the candidate. A good job is a sure short way to have a great life ahead and for that a student need to follow a well planned procedure, which lands him to a safe and secured job, in one of the top most agencies or organisations of the country.

Data Entry Part Time Job – How A Working Student Could Take Advantage Of It

Data Entry part time job – How A Working Student Could Take Advantage Of It

There are practical ways on how any student could take advantage of a data entry part time job. It could help students develop more skills and acquire additional practical knowledge that could not be learned at classrooms.

Opportunities For Working Students

Working and independent students welcome data entry part time job opportunities the most. This is because logically, such jobs could provide them greater chances of earning money while they continue their studies. Now, students would not need to be physically exhausted waiting tables or doing messenger tasks at offices just to earn additional income. Instead, they could opt to take earning opportunities through data entry tasks.

Are you a working student who aims to earn money to support yourself and your studies? Do you think taking exhilarating jobs would be disadvantageous because doing so could possibly drain your energy and affect your studies? If so, a data entry part time job is waiting for you. All you need to do is to search for it and grab it the moment it comes to your doorstep.

Requirements For Getting Into The Job

What is ideal about every data entry job is that you could qualify to apply for one even if you are still as student. In fact, many companies prefer students more. This is because they know students are very vigorous and are very knowledgeable about language and basic computer functions. There is no need to present diplomas or college degrees to be able to land such job.

The only logical requirement for any data entry part time job is access to a computer with secured internet connection. That is because the job tasks are to be performed using basic computer applications, particularly those that involve word processing. If you are a student who owns a laptop or a net-book, this could be a timely opportunity for you.

Time Management Schemes For The Job

Just like all other part-time and full-time jobs that working students take, every data entry part time job requires efficient and effective time-management skills. This is because the student needs to make sure he/she would be able to handle all the requirements of the job despite his/her school schedules.

Data entry part time jobs usually do not require specific time when sessions would be performed. Students could opt to perform duties whenever they have time. If you are not good at managing your time, you might find it hard to accomplish job tasks because of school activities and events that also jumble with your social life.

It could be hard to take a data entry part time job while studying. However, it is one way to promote full independence and responsibility among students. This is equally important as all the concepts and theoretical ideas taught at the classrooms. Students should now rave about this wonderful opportunity.

Use Student Loan Leverage To Have A Great Student Life

Use Student Loan Leverage To Have A Great Student Life

When starting your student days, everything is a new experience. However one of the biggest downsides is to ensure your student loan spending is kept under control. This is throughout all your student days. And this is made that much more difficult right from the start as you have to buy loads of new text books to start your course. This is as well as having to buy your own laptop and printer. So loads of costs are incurred right from the start. Soon the amount on your student loan starts to look rather big.

Next you have heard some of the horror stories of how much some owe on their student loan, when finishing their studies. And to make it even worse, the graduate jobs are no longer out there. All professions are cutting back. So it means you’ll be taking that much longer to pay back what you owe on your student loan. But you don’t want this hanging over you for years. So you now start looking at the various options. That is how to reduce your student loan and ways to subsidise your student life.

Why part-time jobs are not really the answer

The first option is looking for part-time jobs locally. Yes, this is a great option if it offers flexible working times. But the other consideration to bear in mind, are there any additional travelling costs? And does it take up much of your time travelling to and from where you live or study. But the real problem is you’ll start to put in even more hours to keep your student loan in check.

Yes, working longer hours may be helping your student loan out and subsidise your other spending, but the chances are your studies are now starting to suffer. You’re now under pressure to get assignments in on time. You’ll find you’ve no longer have the time to do things. Your student life is starting to be affected.

The real problem with earning in the traditional way, it’s linear in nature. This is how 97% of incomes are earned. That is for every hour you work you are paid a set amount, only once. And the only way to earn more is do one of the following:

1. Try to get a pay rise

2. Put in even more hours

3. Find another job with a higher salary

But the real problem with linear is you can only put in so many hours. So this dictates how much you can possibly earn. Much of this will depend on the amount of hours you can put in. Yes, setting yourself up in business lets you earn even more. But even then you are governed by the business and by the hours you can put in.

Use student loan leverage and have residual incomes

But the good news, there is an alternative to earning money than through linear incomes. Many think it does not really apply to them. It is residual incomes. That is you only have to do something once and yet you are paid again and again for it. So there is no limit on how much you can earn from having done something only once. So if you want even more income coming in all you need to do is set up even more income streams on exactly the same basis. Many start by setting up at least 8 income streams. But the real benefit is there is no limit on how much you can earn from each income stream.

What passive incomes can do for you

And all you need to do to start setting up your own residual incomes, is do exactly the same as those that have been making a living out of it full time for some time. And most of these do it only on a part-time basis as they can afford to. Many prefer to spend long periods of quality with their family instead. And when they take holidays abroad they can still do it. Some have even said the 2 hour week maintenance is too much like hard work. So they have even out sourced that to others for a small flat fee from the income generated each and every month.

You’re shown how to do it step by step all the way. Nothing is left out. You’re not left wondering what to do next. And best of all this can be done around your studies when you have a free moment or period. And to set these up, cost next to nothing depending on how you set them up. And once you have set up one you just do the same again. Just set up as many income streams as you want. As they very much look after themselves, you can set up as many as you want. Some take more looking after than others. But to look after them all should take no more than 2 hours a week in all. So this allows you to spend more time with the family. You decide. And should you wish to stop doing student loan leverage, you can stop your income streams just like that. There are no comebacks. Most prefer to hand it on to others for a share of the income. This is student loan leverage at its best.

And once you have set up a few, you’ll see your student loan start to go down. Worried about doing it? No need to be. If you want to, you can set up your own self group of like minded friends to help each other out. This is so you can help each other out like fellow students also with student loans. But best of all you’ll now be able to live your student life to the full without any financial worries or any big student loan to pay off. And during the term breaks, you can go off to see other parts of the world without the need to take up any part-time jobs like most other students. With your student days coming to an end, you’ll now have little or no student loans to pay off. The next step is to find a job in your chosen career.

Plan for your future by using student loan leverage

Unlike most, when it comes to starting your working life in your chosen career, you’re under no pressure. You have your passive incomes streams still working for you. So you have regular income coming in all the time to keep you afloat. So even if you have no job there is no real financial pressure on you. And when you start work, you can set up even more passive income streams to supplement your main day job income. This could be so you can buy the right house or flat in the best areas. In the meanwhile other ex students with huge student loans struggle when they start their working life. They find it hard to make ends meet every month. They still have to pay off all of their student loan for years to come.

This is your route map of how to stay ahead of others financially by setting up your own passive income streams that are residual in nature, just like those that do this for a living full time.

The Student Loan Debt Bubble Curse of the First “Austerity Generation”

The Student Loan Debt Bubble Curse of the First “Austerity Generation”

It was announced last summer that total student loan debt, at 0 billion, now exceeds total US credit card debt, itself bloated to the bubble level of 7 billion. And student loan debt is growing at the rate of billion a year. 

There are far fewer students than there are credit card holders. Could there be a student debt bubble at a time when college graduates’ jobs and earnings prospects are as gloomy as they have been at any time since the Great Depression?

The data indicate that today’s students are saddled with a burden similar to the one currently borne by their parents. Most of these parents have experienced decades of stagnating wages, and have only one asset, home equity.  The housing meltdown has caused that resource either to disappear or to turn into a punishing debt load. The younger generation too appears to have mortgaged its future earnings in the form of student loan debt.

The most recent complete statistics cover 2008, when debt was held by 62 % of students from public universities, 72 % from private nonprofit schools, and a whopping 96 % from private for-profit (“proprietary”) schools. 

For-profit school enrollment is growing faster than enrollment at public schools, and a growing percentage of students attending for-profit schools represent holders of debt likely to default. In order to get a better handle on the dynamics of student debt growth, it is helpful to sketch the connection between the current crisis in public education and the recent rapid growth of the for-profits.

Crisis of Public Education Precipitates Private School Growth

Since the most common advise to the unemployed is to “get a college education”, and tuition at public institutions is at least half or less than private-school rates, public higher education institutions have been swamped with an influx of out of work adults. This has resulted in enrollment gluts at many state colleges. At the same time, tuition is increasing just when household income and hence the affordability of higher education are declining. 

Here is how this scenario unfolds:

With few exceptions, state-funded colleges and universities set tuition rates based on policy and budget decisions made  by state legislatures. High and increasing unemployment and declining wages have resulted in  declining public revenues. This in turn leads to  budget cut directives from legislative bodies to public higher education institutions, often accompanied by the authority to increase tuition. 

For example, a 14% budget cut to an institution may be “offset” by giving the governing boards of the school the authority to raise tuition by a maximum of 7%. Often the imbalance created by a cut to the base budget and an increase in tuition is made worse by limits on enrollment. A state legislative body may cut an institution’s budget, allow it to increase tuition, but not provide per-student funding increases to keep pace with the accelerating enrollment demand. 

This affects tuition rates at for-profit institutions. More students who would otherwise attend a state institution or a private, non-profit school are finding themselves without a seat at over-enrolled campuses. More students are pushed into the online and for-profit sectors, and proprietary schools sieze the day by inflating their tuition costs. 

Because online colleges lack the enrollment constraints of a physical campus, they are uniquely poised to capture huge proportions of the growing higher education market by starting classes in non-traditional intervals (the University of Phoenix, for example, begins its online classes on a 5-week rolling basis) and without regard to space, charging ever-increasing rates to students who have no other choice. 

Instead of waiting for an admissions decision or a financial aid package from a traditional college, students can enroll immediately online. This ease of use and accessibility to any student has allowed the for-profit sector to capture a growing portion of the higher education market and a growing proportion of education-targeted public money. Enrollments at for-profit colleges have increased in the last ten years by 225%, far outpacing public institution increases. 

Thus, the neoliberal assault on public education not only tends to push more students into private institutions, it also generates upward pressure on tuition costs. This results in growing pressure on enrollees at proprietary schools to take on student loan debt.

How Healthy Are Student Loans?

The extraordinary growth of student debt paralleled the bubble years, from the beginnings of the dot.com bubble in the mid-1990s to the bursting of the housing bubble. From 1994 to 2008, average debt levels for graduating seniors more than doubled to ,200, according to The Student Loan Project, a nonprofit research and policy organization. More than 10 percent of those completing their bachelor’s degree are now saddled with over ,000 in debt.

Are student loans as financially problematic as the junk mortgage securities still held by the biggest banks? That depends on how those loans were rated and the ability of the borrower to repay. 

In the build-up to the housing crisis, the major ratings agencies used by the biggest banks gave high ratings to mortgage-backed securities that were in fact toxic. A similar pattern is evident in student loans. 

The health of student loans is officially assessed by the “cohort-default rate,” a supposedly reliable predictor of the likelihood that borrowers will default. But the cohort-default rate only measures the rate of defaults during the first two years of repayment. Defaults that occur after two years are not tracked by the Department of Education for institutional financial aid eligibility. Nor do government loans require credit checks or other types of regard for whether a student will be able to repay the loans.

There is about 0 billion in total outstanding federal and private student-loan debt. Only 40% of that debt is actively being repaid. The rest is in default, or in deferment (when a student requests temporary postponement of payment because of economic hardship), which means payments and interest are halted, or in forbearance. Interest on government loans is suspended during deferment, but continues to accrue on private loans.

As tuitions increase, loan amounts increase; private loan interest rates have reached highs of 20%. Add that to a deeply troubled economy and dismal job market, and we have the full trappings of a major bubble. As it goes with contemporary bubbles, when the loans go into default, taxpayers will be forced to pick up the tab, since just about all loans to date are backed by the federal government.

Of course the usual suspects are among the top private lenders: Citigroup, Wells Fargo and JP Morgan-Chase.

Financial Aid and the Federal Tilt to Private Schools

A higher percentage of students enrolled at private, for-profit (“proprietary”)  schools hold education debt (96 %) than students at public colleges and universities or students attending private non-profits. 

Two out of every five students enrolled at proprietary schools are in default on their education loans 15 years after the loans were issued. 
In spite of this high extended default rate, for-profit colleges are in no danger of losing their access to federal financial aid because, as we have seen, the Department of Education does not record defaults after the first two years of repayment. 

Nor have the disturbing findings of recent Congressional hearings on the recruitment techniques of proprietary colleges jeopardized these schools’
access to federal funds. The hearings displayed footage from an undercover investigation showing admissions staff at proprietary schools using recruitment techniques explicitly forbidden by the National Association of College Admissions Counselors. Admissions and enrollment employees are also shown misrepresenting the costs of an education, the graduation and employment rates of students, and the accreditation status of institutions. 

Student Loan Settlement
These deceptions increase the likelihood that graduates of for-profits will have special difficulties repaying their loans, since the majority enrolled at these schools are low-income students. (Forbes magazine, Oct. 26, 2010, “When For-Profits Target Low-Income Students”, Arnold L. Mitchem)

A credit scoreisnot requiredforfederal loan eligibility. Neither is information regarding income, assets, or employment. Borrowing is still encouraged in the face of strong evidence that the likelihood of default is high. 

Loaning money to anyone without prime qualifications was “subprime lending” during the ballooning of the housing bubble, when banks were enticing otherwise ineligible candidates to buy houses they could not afford. 

Shouldn’t easy lending without adequate credit checks to college students with insecure credit also be considered “subprime lending”? 

Government’s Bias Toward the Private Educational Sector

In 2009 President Obama initially pledged billion in stimulus funds to help community colleges through the economic crisis. Last March that sum was slashed to billion.The umpteenth example of a broken Obama promise.

We see a drastic cut in federal stimulus funding even as state funding for higher education is expected to fall even further. At a time whencommunity colleges across the country are overflowing with returning students seeking new skills and high school graduates who can’t afford ever-rising tuition rates at many four-year schools,the majority of education-bound stimulus funds are going to for-profit institutions, not community colleges. (Our home state of Washington illustrates the general direction of the administration’s “reform” of higher education: for the first time in the state’s history, public funds no longer pay the majority of higher education costs.)

Apart from stimulus funding, overall government student aid is disproportionately aimed at those attending proprietary schools. Nearly 25% of federal financial aid is spent on students attending for-profit colleges, even though these colleges enroll less than 10% of the nation’s college students. 

Proprietary schools now rely on federal financial aid – PELL Grants and federal loans – as their primary source of revenue. 

Even the most profitable proprietary schools receive the majority of their funding from federal financial aid programs. According to a U.S.-Senate-sponsored study, The University of Phoenix, the largest private university in North America, receives 90% of its funding from the federal government. Not-so-incidentally, proprietary schools are among the largest donors to Education Committee members.

Proponents of the system defend it by pointing out that public colleges also rely on taxpayer subsidies for the majority of their revenue. But this overlooks a decisive difference: what proprietary schools don’t have that  public schools do, is an obligation as a state agency to deliver a high quality education to its students. Instead, proprietary schools have a legal fiduciary duty to their stockholders, like any other for-profit enterprise. As a result, according to a PBS Frontline investigation, the sector spends 20 to 25 % of its budget on marketing and only 10 to 20 % on faculty.

The Track Record of For-Profit Colleges

The track record of for-profit colleges does not justify their disproportionate share of government largesse. 

Drop out rates are higher than they are at public and non-proprietary private schools, often as high as 50 %. Irrespective of whether a student drops out, the for-profit college has already pocketed tuition and fees. The student is left still burdened with a substantial loan obligation.

As for graduation rates, a 2008 report by the National Center for Education Statistics puts the graduation rate for students at for-profits beginning their studies in 2002 at 22%,  an 11% drop from students enrolling in 2000. The same cohort attending public and private non-profits graduated at rates of roughly 54% and 64%, respectively. Graduate or not,  the debt burden remains.

Suppose the student does not drop out but either seeks to transfer to a public or another non-profit, or completes her studies and enters the job market with a proprietary degree?  Many students assume that credits are transferable to a public or nonprofit, but they aren’t, so they pay twice to attain their degree. The school holds out the lure of high-paying jobs upon graduation, but either no such jobs exist or they require education or experience beyond what the school provided. Congressional studies have shown that the earnings of proprietary graduates are the lowest of all graduates. According to a 2009 Bloomberg report on salary comparisons between traditional and online degree-holders, graduates with bachelor’s degrees from traditional colleges earn a median salary of ,200, while those with degrees from the University of Phoenix earn only ,500, and ,100 from for-profit American Intercontinental.

On top of these earnings and job-prospectdisadvantages, proprietary graduates bear the heaviest academic debt burden. The Education Department reports that 43 % of those who default on student loans attended for-profit schools, even though only 26% of borrowers attended such schools. Many of those who attended for-profits don’t earn enough to repay their loans. It’s not uncommon for a student who either paid out of pocket or took out a loan for a ,000 degree to find herself stuck in a ,000 a year job. This only adds insult to injury: a Government Accounting Office study reports that “A student interested in a massage therapy certificate costing ,000 at a for-profit college was told that the program was a good value. However, the same certificate from a local community college cost 0.00.”

Paying back student loans out of low income and over a long period of time can rule out the possibility of making other financial investments required for the vanishing American Dream, such as buying a house, or saving for retirement or for one’s children’s education.

All in all, the for-profits’ track record is more than dismaying. In too many cases, students leave proprietary schools in worse financial shape than they were in before they enrolled. The problem is not limited to proprietary graduates: most of this generation of college grads now possess more debt than opportunity. 

You might think that the unflattering record of for-profit schools would restrain government gift-giving. After all, the Obama administration’s current education policy would punish “underperforming” public schools and teachers. But these policies target the public sector exclusively: the aim is to undermine teachers’ unions and encourage privatization by boosting charter schools. It is entirely consistent with Washington’s agenda that the dismal performance of proprietary schools does not jeopardize their future access to public financial aid funds – as long as the student does not default on their loan within two years of dropping out.

The Career College Association, the lobbying arm of publicly traded colleges, finds all this to be irrelevant. It relies on a different type of indicator from the rest of the higher education sector to measure the success of its for-profit colleges: stock prices. Remarkable. We see the disproportionate flourishing of  ”schools” whose primary concern has nothing to do with education.

Proprietary Schools and the Military

Proprietary schools target the military market with an aggressive and highly successful marketing campaign. For-profit colleges are the destination of high numbers of active duty and recently discharged military personnel. Data from the US Army and Defense Department show that the University of Phoenix is the third largest receiver of education funding from the US Army. 

29% of military enrollments are in the for-profit sector, and 40% of annual tuition assistance to veterans winds up going to proprietary schools. Often targeted while still enlisted, military personnel are attracted to the relative ease with which they can attend school, often at night, on the weekends, or for active-duty military, even while deployed. With the recent reduction of troops in Iraq, more service members are returning to the United States. Waiting for them are generous G.I. Bill benefits, allowing them to pursue vocational or baccalaureate degrees at accredited colleges. The for-profit sector is poised to corner that market aspublic institutions squeezetheir enrollments, raise tuition and watch public support of higher education dwindle in the current resurrection of pre-Keynesian economic policy. 

The job prospects for military personnel at for-profits are predictably poor. A Bloomberg report quotes a retired Marine Corps Colonel who now directs human resources for U.S. Fields Operations at Schindler Elevator Corp., as saying “we don’t even consider” online for-profit degree-holding candidates for the company’s management development program.

THE PRIVATE LENDERS: SECURITIZATION AS USUAL

The two largest holders of student loans are SLM Corp (SLM) and Student Loan Corp (STU), a subsidiary of Citigroup. SLM -Sallie Mae-  was originated as a Government Sponsored Enterprise (GSE) in 1972. The idea was to prime it for eventual privatization. In 1984 the company began trading on the New York Stock Exchange under the ticker symbol SLM.In 2002  Sallie Mae shed the its GSE status and became a subsidiary of the Delaware-chartered publicly traded holding company SLM Holding Corporation.Finally,in 2004 the company officially terminated its ties to the federal government. 

As the nation’s largest single private provider of student loan funding, SLM has to date lent to more than 31 million students. In 2009 it lent approximately .3 billion in private loans and between .5 billion and billion in 2010. 

In the 1990s, well before its full privatization, Sallie’s operations were increasingly swept into the financialization of the economy.It jumped whole hog onto the securitization bandwagon, lumping togetherand repackaginga large portion of its loansand selling them as bonds to investors. SLM created and marketed its own species of asset-backed securitized student loans, Student Loan Asset Backed Securities (SLABS).When derivatives trading went through the roof following the 1998 repeal of Glass-Steagal, increasingly diverse tranches of Sallie-Mae-backed SLABS entered the market. The company is now also buying  and selling the obligations of state and nonprofit educational-loan agencies. 

Student loans were included in the same securities that are blamed for the triggering of the financial crisis, and financial products containing these same student loans continue to be traded to this day. The health of these tranches and securities is, as we have seen, highly suspect. 

SLM’s risk was minimized as long as the feds guaranteed its loans. But as part of last March’s health care legislation, starting in July 2010 federally subsidized education loans were no longer available to private lenders. What do education loans have to do with health care? Since the government took federal loan originations in-house, making them available only through the Department of Education, it no longer has to pay hefty fees (acting as the guarantee) to private banks. The Obama administration expects to save billion between now and 2020. billion of this will be used to pay for the 0 billion health care bill.

SLM will do quite well despite this seeming setback. The company anticipated the change in government lending policy by executing an ingenious trick as a borrower. Early last year it made its insurance subsidiary a member of the Federal Home Loan Bank of Des Moines, which agreed to lend to big-borrower SLM at the extraordinary rate of .23%. And anyhow,  subsidized loans are almost always insufficient to cover the entire cost of a college degree. For a while the student gets to enjoy the benefits of a government loan. Interest rates are lower and during deferment interest does not accrue. But eventually many students must also take out a private loan, usually in larger amounts and with higher interest rates which continue to mount during deferment. Defaulted Student Loan Assistance

THE WORST-CASE SCENARIO: GOING BANKRUPT

Credit card and even gambling debts can be discharged in bankruptcy. But ditching a student loan is virtually impossible, especially once a collection agency gets involved. Although lenders may trim payments, getting fees or principals waived seldom happens.

The Wall Street Journal ran a revealing report on the kinds of  situation that can lead to financial catastrophe for a student borrower. (“The 0,000 Student Loan Burden: As Default Rates on Borrowing for Higher Education Rise, Some Borrowers See No Way Out”, Feb. 13, 2010) Here is an excerpt:

“When Michelle Bisutti, a 41-year-old family practitioner in Columbus, Ohio, finished medical school in 2003, her student-loan debt amounted to roughly 0,000. Since then, it has ballooned to 5,000.

It is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single ,870 fee for when her loan was turned over to a collection agency.

Although Bisutti’s debt load is unusual, her experience having problems repaying isn’t. Emmanuel Tellez’s mother is a laid-off factory worker, and 0 from her 0 unemployment checks is garnished to pay the federal student loan she took out for her son.

By the time Tellez graduated in 2008, he had ,000 of his own debt in loans issued by SLM… In December, he was laid off from his ,000-a-year job in Boston and defaulted.

Heather Ehmke of Oakland, Calif., renegotiated the terms of her subprime mortgage after her home was foreclosed. But even after filing for bankruptcy, she says she couldn’t get Sallie Mae, one of her lenders, to adjust the terms on her student loan. After 14 years with patches of deferment and forbearance, the loan has increased from ,000 to more than ,000. Her monthly payments jumped from 0 to 6. Last month, her petition for undue hardship on the loans was dismissed.”

THE FIRST AUSTERITY GENERATION’S JOB PROSPECTS

Most of those affected by the meltdown of 2008 had completed their education and were either employed or retired. The student loan debt bubble signals a generation that enters the work of paid work cursed with what is more likely than not to be a life of permanent indebtedness and low wages.  

Both recent trends and the most informed projections for the future of the labor market reveal that most of the current cohort of indebted students will face earnings prospects far poorer than what job seekers could expect during the period of the longest wave of sustained economic growth and the highest wages in US history, 1949-1973. The present generation will experience the indefinite extension of Reagan-to-Obama low wage neoliberalism. 

According to the National Association of Colleges and Employers more than 50 % of all 2007 college graduates who had applied for a job had received an offer by graduation day. In 2008, that percentage tumbled to 26 percent, and to less than 20 % in 2009. And a college education has been producing diminishing returns. For while a college degree does tend to correlate with a relatively high income, during the last eight to ten years the median income of highly educated Americans has been declining.

Every two years the Bureau of Labor Statistics issues projections of how many jobs will be added in the key occupational categories over the next ten years. The projected future jobs picture indicates that the grim employment situation is not merely a temporary reflection of the current unusually severe downturn. But you miss this if you get your news only from mainstream sources. The New York Times’s report on the most recent BLS projections, issued in December 2009, paints an unduly optimistic picture of future employment opportunities. (Catherine Rampell, “Where the Jobs Will Be”, Dec. 15, 2009) Here is how a misleading report can be produced without falsifying the facts:

BLS releases two job projections, on the Fastest Growing Occupations (www.bls.gov/emp/ep_103.htm ) and on  Occupations With the Largest Job Growth (www.bls.gov/emp/ep_table_104.htm). The Times focuses on the former, where the two fastest growing occupations, biomedical engineers and network systems and data communications analysts, require a college degree.  The Times echoes BLS’s comment that occupations requiring postsecondary (a bachelor’s degree or higher) credentials will grow fastest. This is redolent of the ideology of the “New Economy” : the US is turning into a society of professionals and knowledge workers, and the key to success in this upgraded economy is a college education.

But we need more information, about  the degree requirements of the total number of job categories listed in both projections, and about the number of new jobs expected to materialize in each projection. Of the total jobs listed, only one of five require a postsecondary degree. By far the fastest growing category is biomedical engineers, projected to grow 72.02 %, from 16,000 in 2008 to 27, 600 in 2018. That’s 11,600 new jobs. Is that a lot? Well, compared to what? The percentage figure, 72.02, is high, but what about the number of new jobs? Let’s compare that Fastest Growing occupation with retail salespersons, the fifth occupation on the Largest Growth list. Retail sales workers will grow by a mere 8.35 %. But that amounts to almost 375,000 new jobs, an increase from 4,489,000 jobs in 2008 to 4,863,000 jobs in 2018. Compare that to the 11,600 new jobs at the top of the Fastest Growing list. Just do the simple math on all the categories on both lists: the great majority of new jobs will be low-paying. 

The US is a nation of knowledge workers? Most new jobs will offer the kind of wage we would expect from an economy in which, according to one of Obama’s most repeated mantras, “we” will “consume less and export more”. BLS avers as much when it projects 51 million “job openings due to growth and replacement needs,” fewer than 12 million of which will require a bachelor’s degree. 

Our first austerity generation will be in debt to its teeth and stuck with low-wage work. The relative penury will require more debt still. Michael Hudson calls this debt peonage. We need to begin thinking of political organization that has little to do with the ballot box. And thinking won’t be enough…