Matt Taibbi recently wrote an article in Rolling
Stone outlining the way that student loans have been manipulated by
both the US government and banks to maximize profits at the expense of students
and the entire system of higher education. While he did a great job explaining
the problem, his free-market "solution" would worsen the more
fundamental problem of access to higher education. His proposed fix fails to
address the full effects of this disgraceful bipartisan failure to deal with
the problem. We have to understand the larger issues to devise a permanent
solution that will not only deal with the immediate crisis but strengthen
rather than destroy the system of higher education on which the hope of
democracy depends.
A trillion dollars in student debt threatens the futures of a generation
of young Americans. It also endangers an American economy that depends on a
thriving middle class, one already under siege by corporate interests with too
much power in Washington. The recent bipartisan "victory" avoids an
immediate doubling of student-loan interest rates by tying increases to
Treasury rates. However, this comes at the cost of future increases estimated
to reach nearly 8% in five years. In a depressingly familiar pattern, Congress
is patting itself on the back for kicking the problem down the road while the
economic consequences of delay mount.
Jefferson would have considered the idea that education should be treated
like a commodity outrageous. He was so convinced that education was the key to
maintaining democracy that he insisted that the only honor to be inscribed on
his tombstone was "Founder and first President of Virginia
University," the first public college in the United States. He realized
that if Americans ever forgot how to think for themselves, they would be easily
persuaded into following foolish arguments designed to appeal to their
self-interest. As usual, he was prescient.
After WWII a grateful nation gave a generation of young American
servicemen access to higher education fully paid for by taxes, including
tuition, fees, and living expenses. A period of unprecedented prosperity
followed, as well-trained citizens were able to fill the wide demand for their
talent in a booming economy.
While prosperity was in large part due to pent-up demand for goods and a
wartime industrial base easily converted to peacetime manufacturing, the same
benefits could be achieved if the economy were redesigned to meet the needs of
a faltering middle class. Instead, that middle class is increasingly falling
into poverty because of the effects of crony capitalism, most evident in the
crash of 2008 caused by bankers who walked away with billions and who remain at
large, free to continue to commit their economic crimes and to serve as
economic advisers in the current administration.
The purpose of higher education is not merely to make money. Even if it
were, it would fail to meet that objective under the current system. The
typical student graduates with $27,000 in debt and enters a job market so
dismal that he or she will likely remain in debt for decades. Average wages
have fallen. Despite increasing numbers of mostly poorly paying jobs, estimates
of real unemployment remain at Depression-era levels.
Democrats and Republicans are negotiating to minimize what both argue are
"necessary" cuts in a social-safety net that is needed more than
ever. Neither party seems to realize it is the fig leaf covering the real
extent of the economic devastation facing the next generations of Americans,
whose taxes are supposed to support Baby Boomers in their senescence. Most
young people are not yet aware of what they are facing, or they would be
swelling the ranks of protesters.
Despite a failing economy and the publicity surrounding the debt crisis,
the myth that students can just take a job and pay for college persists. With
government funding to higher education slashed and costs rising at 2-3 times
the rate of the Consumer Price Index, it is nearly impossible to find work that
will pay tuition and fees. These costs have risen 300% since 1990 and now
consume 11% of average family income. Wages at McDonalds, where workers are
counseled to take second jobs to make ends meet, have not risen accordingly. In
a sick irony, despite record profits that corporation wants to pay workers with
debit cards that have high fees attached to them, mimicking a common scheme for
ripping off students whose educational loans are distributed the same way.
An even more dangerous myth is the idea that the 20% rate of defaults on
college loans is due to people attending college in pursuit of careers that
will not produce income sufficient to pay their debts. Those who accept this
argument believe that it is the popularity of majors in underwater basket
weaving that is at fault. Using their logic, no responsible student would enter
college except to study business. Haven't they figured out yet that it is the
MBAs who got us into this mess? It seems that the study of ethics might have
more practical implications for the future of the nation.
To make matters worse, increasing numbers of employers are treating college as
the new high school diploma, the minimum requirement for even an
entry-level job. Soon, young people will be left with a choice between poverty,
getting an education at a cost that will likely make them lifelong debtors, or
joining the military to risk
their lives for an education.
It is time to consider what kind of future we want to leave posterity,
and to begin to redesign the educational system to meet its demands. To do so,
we must insist that politicians challenge the expectations of the economic
elite for ever-increasing wealth. Do we want to continue to treat education as
a commodity, as we do health care?
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