Tuesday, August 20, 2013

Educational Monkey Business

Many in the political media lament that August is the worst month of the year for news gathering. While President Obama was already back in DC and working yesterday, Congress is still out for another couple weeks - meaning that there is little news coming from the Capitol.

Schools, however, are back in session nationwide, and that lull in stupidity from Capitol Hill gives writers and journalists a chance to revisit certain issues we may not have been able to fully close out earlier in the summer.

For example, the student loan fiasco that got quietly resolved in July, and the legislation that President Obama signed earlier this month.

As we noted in July, and again before that in April, the student loan industry has become a massive racket, the kind of monkey on the back of Americans that seems cute at first and - literally for some - turns deadly later.

Even though the numbers surrounding America's student loan beast are clear and terrifying, we still encounter large numbers of people who scoff at the idea that the student loan problem is as bad as it is, or that America has broken any kind of contract that it's made with the young.

So we're going a bit gorilla today, and we're going to hit you over the head with a piece by Matt Taibbi, of Rolling Stone.

Taibbi, for his part, still has a chip on his shoulder against President Obama that we do not share. That said, the picture Taibbi paints of a fiscal and social disaster happening now, and stemming from the monster that is the student loan program is accurate, and is getting worse all the time. Just in the last decade, student loan debt has quadrupled.

In real-life terms, as Taibbi makes clear in his in-depth piece, this means everything from students having to sell drugs, to students committing suicide from the pressure of the crushing debt - debt that as we noted in April, was part of a social contract, one that America has welshed on.

Student loan companies now take such draconian measures as garnishing the federal disability checks of near-fatally injured former students, or going after the families of dead students trying to collect on higher ed. loans. Yet the best our government could do for a student loan relief bill this summer was to temporarily drop interest rates on the loans back below 4%.

That rate won't last, though. Unlike the plan financially wise members of Congress like Sen. Elizabeth Warren supported earlier this year, the plan that passed Congress in July ties the new student loan rate to the market rate. Which means it's a certainty that student loan rates will go up, and be even higher than they were before. While it's likely this issue will be tackled again, as Taibbi points out early in his piece, the focus on student loan interest rates is a distraction.

The real problem is the principal of the loans - as well as the principle that millions of American kids have been sold: That a college degree is a ticket to success, or at least a foot in the door for a decent paying job.

The truth today is that college loans are a scam. Even when they guaranteed good paying jobs, they were a risk.

Now, they're simply a monkey on the backs of millions of Americans - one that is dragging down the future of our entire nation.