This is the second in a two-part article on the debt burden America’s students face. Read Part 1 here.
The lending business is heavily stacked against student borrowers. Bigger players can borrow for almost nothing, and if their investments don’t work out, they can put their corporate shells through bankruptcy and walk away. Not so with students. Their loan rates are high and if they cannot pay, their debts are not normally dischargeable in bankruptcy. Rather, the debts compound and can dog them for life, compromising not only their own futures but the economy itself.
Higher education has been financialized, transformed from a public service into a lucrative cash cow for private investors.
The advantages of slavery by debt over “chattel” slavery – ownership of humans as a property right – were set out in an infamous document called the Hazard Circular, reportedly circulated by British banking interests among their American banking counterparts during the American Civil War. It read in part: Continue reading →
Students usually don’t think of themselves as a class. They seem “pre-class,” because they have not yet entered the labor force. They can only hope to become part of the middle class after they graduate. And that means becoming a wage earner – what impolitely is called the working class.
“This government’s [England] whole strategy for higher education is, in the cliché it so loves to use, to create a level playing field that will enable providers to compete on equal terms with public universities.” – Stefan Collini, “Sold Out,” London Review of Books
On July 1, interest rates will double for millions of students – from 3.4% to 6.8% – unless Congress acts; and the legislative fixes on the table are largely just compromises. Only one proposal promises real relief – Sen. Elizabeth Warren’s “Bank on Students Loan Fairness Act.” This bill has been dismissed out of hand as “shameless populist demagoguery” and “a cheap political gimmick,” but is it? Or could Warren’s outside-the-box bill represent the sort of game-changing thinking sorely needed to turn the economy around?
“We say in our platform that we believe that the right to coin money and issue money is a function of government. . . . Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson . . . and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business.”
— William Jennings Bryan, Democratic Convention, 1896
I told you earlier that I would explain the student loan racketeering industry better than I did before. That is difficult to accomplish, however, given the sheer magnitude of the problem, and the number of years that this malignant problem has been rotting American society in the shadows, outside the illumination of national news media oversight. You might want to read the book “The Student Loan Scam” by Alan Collinge, available at Amazon.com, to learn the details. However, Collinge tends to be unreasonably diplomatic, and he is only concerned with seeking justice for student loan debtors (to his credit). I, on the other hand, seek both justice for students, and the criminal prosecution and imprisonment of certain student loan industry executives, corrupt members of the U.S. Congress, and certain individuals at the U.S. Department of Education. This corruption not only rots the core of our national principles of self-governance, but it presents a clear and present danger to the traditional American way of life itself. As I hope you’ll recognize here, the implications of what Al Lord, Congressman John Boehner, and others have done to student loan debtors, goes far beyond the student loan racketeering issue itself. It threatens our ability to compete effectively in a globalized economy.