The College Fix in June reported on how that student loan interest rate crisis over the summer was actually a red herring for a much, much bigger problem: that the federal government – both Republicans and Democrats – game the higher education financial system.
The feds make billions of dollars off student loans annually. These government-backed loans – which are as easy to get as a gallon of milk at the store – have actually increased the price of a degree, as tuition prices have skyrocketed far greater than inflation rates and continue to do so because everyone can get a loan and administrators know it.
Those tuition checks are funneled to universities locked in a construction arms race as they try to give their campuses more bells and whistles to better attract bright-eyed and bushy-tailed students who just signed on the dotted line for a loan that will likely follow them to the grave (yep – the feds can even garnish social security checks or wages after a bankruptcy).
All this to subsidize an education system that faces a massive reconstruction in the wake of technology and will likely implode on itself in the not-so-distant future.
Democrats have historically owned the student-loan debate, have typically been viewed as more sympathetic to college students’ plights. But that tide has turned.
Case-in-point: A lengthy expose this month in Rolling Stone magazine – that bastion of trendy, pop culture liberalism for many a Millennial – has detailed the truth in lending regarding what it called “The College Loan Scandal – Ripping Off Young America.”
Reporter Matt Taibbi uses colorful language, compelling anecdotes and a cornucopia of data to paint the picture for readers that government-backed student loans are “a shameful and oppressive outrage that for years now has been systematically perpetrated against a generation of young adults.”
“For this story, I interviewed people who developed crippling mental and physical conditions, who considered suicide, who had to give up hope of having children, who were forced to leave the country, or who even entered a life of crime because of their student debts,” Taibbi wrote. “They all take responsibility for their own mistakes. They know they didn’t arrive at gorgeous campuses for four golden years of boozing, balling and bong hits by way of anybody’s cattle car. But they’re angry, too, and they should be. Because the underlying cause of all that later-life distress and heartache – the reason they carry such crushing, life-alteringly huge college debt – is that our university-tuition system really is exploitative and unfair, designed primarily to benefit two major actors.”
Those two actors: the feds and college administrators, of course.
The story is a long but interesting read. Taibbi throws both Republicans and Democrats under the bus. President Obama, in particular, gets a great big dose of well-deserved smearing in the piece.
Here are a few good highlights from the article, which as of Sunday had been liked on Facebook more than 21,000 times:
First of all, a high percentage of student borrowers enter into their loans having no idea that they’re signing up for a relationship as unbreakable as herpes. Not only has Congress almost completely stripped students of their right to disgorge their debts through bankruptcy (amazing, when one considers that even gamblers can declare bankruptcy!), it has also restricted the students’ ability to refinance loans. … (It’s) especially pernicious, given that their pool of borrowers are typically one step removed from being children. …
Turning down the credit spigot would force schools to compete by bringing prices down. It would help to weed out crappy schools that hawked worthless “degrees in bullshit.” It would also force prospective students to meet higher standards – not just anyone would get student loans, which is maybe the way it should be.
Having passed credit cards to became the largest pile of owed money in America outside of the real-estate market, outstanding student debt topped $1 trillion by the end of 2011. …
There are powerful reasons for both the left and the right to be willfully blind to the root problem. Democrats – who, incidentally, receive at least twice as much money from the education lobby as Republicans – like to see the raging river of free-flowing student loans as a triumph of educational access. Any suggestion that saddling befuddled youngsters with tens of thousands of dollars in school debts is somehow harmful or counterproductive to society is often swiftly shot down by politicians or industry insiders as an anti-student position. …
We’re doing the worst thing people can do: lying to our young. Nobody, not even this president, who was swept to victory in large part by the raw enthusiasm of college kids, has the stones to tell the truth: that a lot of them will end up being pawns in a predatory con game designed to extract the equivalent of home-mortgage commitment from 17-year-olds dreaming of impossible careers as nautical archaeologists or orchestra conductors.”