Tuesday, July 9, 2013

The Coming Wave

It should be no surprise to anyone that even though Congress is back in session, absolutely nothing is likely to get done on Capitol Hill. That doesn't mean there aren't a pile of things that need tending to, from passing the Farm Bill to raising the debt ceiling to passing comprehensive immigration reform to dealing with student loans.

However, as we noted on Monday, Congress - and specifically House Republicans - have no intention of doing anything to help anyone but themselves. Greg Sargent stated it bluntly in his headline on Monday: "The problem isn’t generic 'Washington gridlock.' It’s the House GOP." We strongly agree with Greg on that, though we'd be willing to go one step further and say it's the extremists in the Republican Party that dominate the House GOP leadership right now.

Indeed, our hypothesis that mind-numbingly selfish, extremist House Republicans are the real problem is clearly reflected in the fight going on in the Senate this week over the student loan interest rates that Congress allowed to double over the holiday break.

Make no mistake - the doubling of student loan interest rates is no small small drop in a bucket. It's more like a tidal wave of financial destruction, caused by the financial cannonball of the 'college as a business' model, that's already gotten the idea of college as a wise investment all wet.

We addressed this problem in April 2012 when House Republicans attempted to take the student loan interest rate hostage in return for cuts to the implementation of Obamacare, and we noted then - student loans are meant to be a contract with society. Judging by the behavior of the House Repubs on this issue, they would still obviously prefer that contract with America's college students to be a loan shark agreement, where they get to play the part of the bully banker.

House Republicans right now are practicing that role, as they attempt to bully Senate Democrats into accepting their draconian version of a student loan interest rate "repair" bill, that easily could raise interest rates on student loans above the seven percent range where they are now, thanks to Congress' inaction.

That kind of loan sharking behavior seems especially ill-advised with student loan debt over $1 Trillion right now, and with median individual student debt at graduation now over $35,000. Students at nearly fifty percent of for-profit private colleges and universities are now more likely to default on their student loans than to graduate.

There are some states like Oregon that are pushing seriously into new and innovative ways to fund college educations, and President Obama has done a great deal to add programs to reduce student loan debt, increase Federal Pell grants, and add better repayment plans.

While all those steps have been great, the fact remains, the student loan repayment crisis in America is a massive crushing wave that will not only steal the chance for the American Dream from those in their mid forties and younger - it will also make them more educated and angry.

For a party that keeps claiming they want to expand their voting base, crushing even the potential for achieving the American dream under a wave of perpetual debt for millions of Americans under the age of 45 isn't exactly what anyone sane would consider a smart political move by the GOP.