Robert Shireman, a senior adviser to Secretary of Education Arne Duncan, says he expects the default rate, which reflects the early part of the recession, to continue to rise. “When people are facing a job loss, figuring out how to pay their student loan is not No. 1 on their list,” he said.

That’s right. For better or for worse, the last thing on many people’s minds at this time is their student loans. Like Mr. Shireman reports, if you’re losing your job and you’re at risk of going into default on your mortgage, then the last thing that you care about is paying back a student loan that is ten, fifteen, or twenty years old!

But you’ve got to make those payments, folks. Student loans are among the few pieces of debt that cannot be discharged in a bankruptcy filing. Further, the government can (and will) garnish your wages if you default on your student loans.

All of this gets back to a point that I’ve made a few times in the last few weeks on this blog – that one of the best ways to stimulate the economy would be to cancel some, if not all, student loan debt for existing borrowers. And this point is related to something else that I think many of us stunted by student loan debt understand that the rest of the people out there don’t get yet – namely that even with all of the stimulus plans and other money being pumped into the economy, those who have a great deal of student loan debt are not going to be able to contribute to the economic recovery.

Now, if there were only a few of us, then the effect wouldn’t be so bad. But the number of people with out of control student loans is growing and that is not a good thing for the economic recovery…

Forgiving student loan debt would have an IMMEDIATE stimulating effect on the economy. Responsible people who did nothing other than pursue a higher education would have hundreds, if not thousands of extra dollars per month to spend, fueling the economy NOW. Those extra dollars being pumped into the economy would have a multiplying effect, unlike many of the provisions of the new stimulus package. As a result, tax revenues would go up, the credit markets will unfreeze and jobs will be created.

Let me be clear. This is NOT about a free ride. This is about a new approach to economic stimulus, nothing more. To those who would argue that this proposal would cause the banking system to collapse or make student loans unavailable to future borrowers, please allow me to respond.

You can go read Applebaum’s group page to see how he responds to the obvious criticism. What strikes me is that that aggregate student loan debt in America is roughly $600 billion. The government passed $700 billion in stimulus spending last October (which has been a failure) and another nearly $800 billion last month. Plus there is a spending bill currently before the Congress that would increase the number of dollars being spent on ridiculous earmark projects. By some estimates, in total we could be spending $2.3 trillion on stimulating the economy…with little of that actual money going directly to benefit the middle class.

Applebaum’s suggestion is an interesting one and given the personal nature of the suggestion, each person who supports or rejects it will have specific reasons why. Many of those who reject it will project their life experiences on the stories of those who support it (a common, aggravating problem in the student loan world). Likewise, many of those who support the proposal will have a level of debt that could likely be paid off after a few years of hard work and saving. But there were always be exceptions that drive the argument forward in some people’s minds. You can find some of those exceptions by reading the a petition currently on The Petition Site calling for Applebaum’s plan to be put into action.

I signed the petition and added a little bit of my story, which I think suggests why enacting a student loan forgiveness policy would be beneficial for me. Here is my little blurb, reprinted for your reading:

I graduated with $118,000 in student loan debt. Without taking out these loans, I would have never been able to receive the high quality education that I did. All I did was pursue the American Dream…and now I pay about $1,000 each month because of those student loans. I have a great job and I still can’t buy a home – heck, I can’t even buy a new car! I’m still making my payments and I’m still paying down my debt (down to $104,000 now). But if I could use that extra money each month to buy a home or a new car, I would do it in a heartbeat. However, on the path that I’m on now – neither purchase will be possible for at least the next ten years. Great…

I’m not sure if either purchase won’t be available for the next ten years, but repaying at the rate that I’m currently going (which is above and beyond the minimum monthly payments) will certainly put me on that timetable. Something needs to be done and though I have a few different ideas about how I plan on addressing this debt (can’t keep a good man down!), it would be so much more effective if the government stopped collecting it’s 4.75% interest rate off of the $50,000+ that I owe it in principle.

I don’t want a handout and I know that if things don’t change, then I’ll be able to payoff my student loans in due time. But during a time when Wall Street executives are getting million dollar bonuses for failing and when banks, insurance companies, and the automakers are getting money hand over fist from the government, you would hope that – at some point – someone in Washington steps back and says, “Whoa! What are we really doing here?!” If somebody would do that and champion this cause over the current bailout causes, I think it would truly stimulate the economy.

The link for that portion of the White House’s website may be found by clicking here. I hope that Americans really take this opportunity to send messages to the White House to talk about the things that are affecting them everyday. Personally, I’ve sent two messages to the White House so far – both of them dealing with a tax issue related to student loans.

For those of you who have student loans, you’ll know that you can deduct the interest paid on your loans on your taxes. The problem is that you can only deduct up to $2,500 per tax year. Well hey, if you have massive student loan debt, you may be paying upwards of $5,000 or $6,000 per year in interest alone!

If you’re out there in the world and making good money, but are saddled with gigantic student loan debt, you know that being able to deduct the entire amount of interest paid on student loans would be a great way to put more dollars back in the pockets of the working class…the very people who would not have been able to attend college if it were not for those loans. So this is what I’ve been sending Obama – that you can go ahead and fix the economy, but if people with massive student loan debt are still spending an exorbitant portion of their income on this interest, then fixing the economy won’t matter.

One way to mitigate this problem is allowing Borrowers to deduct the entire amount of their student loan interest. If you agree, here is a short message that you, too, can send to the White House on the contact page listed above:

Tax policies should be revised so that 100% of annual interest paid on student loans can be deducted on personal taxes. Many Borrowers with high student loan debts pay a high portion of their annual, post-tax income as interest on student loans. Currently, only $2,500 may be deducted annually. Borrowers with larger student loan debts routinely pay upwards of $5,000 each year in interest. Allowing the total amount of interest paid to be deducted will better position these citizens in the economy.

You’ll see that you can only submit 500 characters worth of a message to the White House (which makes sense). The italicized blurb above is 500 characters on the dot. So if this is something that you can agree with, please copy and paste the text above into the contact form on the White House website!

Example #1: Spent time reviewing applicants and deciding whether or not they would fit in with the company’s mission statement

In this example, someone is seeking a job in human resources and is describing one of her regular tasks at her previous company. However, remember that your potential employer does not read your resume to read a description of your previous job. Instead, they want to know about how effective you were at your previous job.

Resolution #1: Hired 14 staff members over a 5 year period including 3 executive level positions; managed an average of 4 employee complaints per month; designed and successfully implemented an annual department review program

The resolution tells a little bit more about what you actually did while in that position.

Example #2: Managed a loan portfolio and analyzed potential new borrowers for the company’s various loan products

Blech! All this tells the reviewer is that you went to work each day and did your job. How exciting?! Talk about what you managed at work and describe your analyzing.

Resolution #2: Manage a $60 million loan portfolio including $30 million in residential mortgages, $20 million in federal grants, and $10 million in commercial real estate; analyzed new business opportunities through cash flow statement and audited financial reviews and background credit checks on applicants

This resolution gives specifics and tells the reviewer much more about your daily work load.

Quick, pertinent details are what you’re looking for in your resume. Keep it simple, but make it count!

This post is also scheduled to appear on GradSpot.com – Your destination for life after college with all the content, tools, and services you need to ease your transition from college to the real world.

But one thing bothers the hell out of me and that’s when credit card companies try to hoodwink students into signing up for their product. Sure, this falls into the parameters of learning about the rules of the game, but it’s cheap. The New York Times covered this last Friday in an article entitled, “Colleges Profit as Banks Market Credit Cards to Students.”

If you clicked over to see the article, then I’m sure you noticed the Bank of America table set up at Michigan State University. Anyone who has been to college has seen a similar setup on their campuses – you have a perky representative behind the table enticing students who are walking by to sign-up for their credit card and in return you get a free t-shirt, a gigantic discount at the bookstore, or some other not-really-needed benefit. When I was in college I once signed up for a credit card because they were giving away free t-shirts…which were two sizes too small for me to wear.

Hundreds of colleges have contracts with lenders. But at a time of rising concern about student debt — and overall consumer debt — the arrangements have sounded alarm bells, and some student groups are starting to push back.

The relationships are reminiscent of those uncovered two years ago between student loan companies and universities. In those, some lenders offered universities an incentive to steer potential borrowers their way.

Here at Michigan State, the editors of the student newspaper wrote this fall that “it doesn’t take a giant leap for someone to ask why the university should encourage responsible spending when it receives a cut of every purchase.”

Good for the student newspaper at Michigan State! Keep probing the issue and asking those questions. For example, if Michigan State has this credit card arrangement with Bank of America whereby it profits when students use credit cards (responsibly or not), then with which organization does the university have a contract to teach students how to use credit responsibly? And what are the metrics for either program? In other words, how much has the university generated from its Bank of America relationship versus how much it has spent on teaching its students how to be responsible economic citizens? I’m sure that with Michigan State being a public university that the students can do some digging and find some of this information. The Times article gives this information:

Michigan State University gets $1.2 million a year but is guaranteed at least $8.4 million over seven years, according to its agreement. The contract calls for a $1 royalty to the university for every new card account that remains open for at least 90 days, $3 for every card whose holder pays an annual fee, and a payment of a half percent of the amount of all retail purchases using the cards.

My guess is that the university has no formal relationship to spend any of those millions of dollars on financial education for its students. What a shame? This stuff bothers me because no matter how level-headed you think a college student might be, there is a greater likelihood of them getting into severe credit card debt because of programs like the one above. When I was in college I rang up some $13,000 in credit card debt before I had to have my Mother bail me out (thanks, Mom ). It was a costly learning experience for me – though I must admit that I’m much better off financially now then I’ve ever been and it is due, in part, to having racked up such a ridiculous credit card debt while in college.

Oh, and how many times can I quote stories from the New York Times? Geez! For their part, the Times has a series called “The Debt Trap” where they look at the relationship between increased consumer spending and the lenders providing the dollars for that relationship. It’s interesting – go take a look!