Stef Gray, 23 , of Sheepshead Bay, Brooklyn stands in...

Stef Gray, 23 , of Sheepshead Bay, Brooklyn stands in her cap and gown at the entrance to Zuccotti Park. Gray recently graduated, has three degrees in Graphic Information Systems, and is $135,00 in debt after taking private student loans. Credit: Charles Eckert

The sign at the Occupy Wall Street demonstration revealed the struggles of America's young: "A B.A., $30,000 in student debt and no job." Young people are graduating from college into the worst jobs market since the 1930s while carrying record levels of student debt. The sad truth of Occupy Wall Street is that for many of the young activists, Wall Street occupied them first.

Students are borrowing twice what they did a decade ago, even after adjusting for inflation. Total outstanding debt has doubled in just the past five years. Student debt now exceeds credit card debt, and is likely to exceed $1 trillion over the next year.

This is a bubble that is inflating faster than the housing bubble did before it exploded. As states cut back on college support and grants, college tuitions have been rising faster than the cost of homes, health care or energy. More and more Americans believe that getting a college education is key to their children's future, so more and more are borrowing what they can to give their kids a chance.

As a result, students are now graduating with average debts of over $24,000. When I speak to families in mining towns in Appalachia, I ask how many have lost a job, how many are facing foreclosure, how many are facing costly medical bills. Many hands go up. But when I ask how many are worried about student loans, the biggest portion of the audience stands up. It is working families - the families stretching to give their children the chance that they never had - who are taking on the greatest debt, and are at the greatest risk.

The banking industry has used its clout to make these loans the harshest of all debt. They survive bankruptcy. The lenders have broad collection powers, far greater than with a mortgage or a credit card. They can garnish wages or even Social Security payments, if the loans last that long. Interest keeps accumulating when payments are missed; penalties are brutal. Students who graduate and then lose their job suddenly find themselves owing twice what they originally signed up for.

For an increasing number of college students, the debt burdens constrict normal life events. They must put off moving out from their parents' home, or buying a car, or saving for a home or retirement. They delay getting married or having children, burdened by debts that consume their salaries. And in this economy, defaults have soared amid a difficult job market. In 2008, the most recent year for which data are available, nearly 3.4 million borrowers began repayment, and more than 238,000 defaulted on their loans. The number of loans that went into forbearance or deferment (when borrowers receive temporary relief from payments) rose to 22 percent in 2007, from 10 percent a decade earlier, according to The Chronicle of Higher Education. Over a 15-year period, default rates range from 20 percent for federal loans to 40 percent on loans to students who attend for-profit schools.

President Obama and his wife, Michelle, knew this reality personally, struggling to pay off student debts long after they graduated from the best schools in the land. The president increased Pell grants and provided relief that would link government loans payments to income, and provide potential forgiveness for those taking public service jobs. But despite the largest increase of student aid since the GI Bill after World War II, the debts keep getting bigger. Americans are tightening their belts in this Great Recession, paying down credit cards, mortgages and personal loans. But student loan debt continues to soar.

The scope of this debt not only enslaves the borrowers, it threatens the economy. With millions of young people burdened by debt, demand for apartments, homes, cars, and any discretionary goods is reduced.

Even conservatives like Republican House Majority Leader Eric Cantor acknowledge that the Occupy Wall Street demonstrators have a point.

Occupy Wall Street can take the lead to hold congressional hearings and ask these hard questions and demand answers and remedies:

Banks were guilty of the same predatory practices in issuing student loans as in their subprime loan practices. The banks employed their lobbyists and corrupted Congress with campaign contributions to facilitate their fleecing of the most vulnerable of students with the most onerous of provisions.

Why should big banks be able to get virtually interest-free money from the Federal Reserve, while students are forced to pay far higher interest rates? Why should bankruptcy courts be able to rewrite mortgages on the vacation homes of the wealthy while student loans are untouchable? Students need legislation to allow their loans to be refinanced in bankruptcy court, or forgiven. If advanced education and training of our next generation is vital to our country, why don't we provide students with the grants or low-cost loans the banks get?

Many young people forgo college, unable to afford the education that they have earned. Others begin school, but drop out because of soaring costs and an unwillingness to rack up the debt. Students saddled with now more than $1 trillion in student-loan debt are the latest blocked artery of our nation's economy. If there is anything that is too big and too important to fail, it is our next generation.

You can write to the Rev. Jesse Jackson care of this newspaper or by e-mail at

(c) 2011 Tribune Media Services, Inc.

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