October 6, 2011
If you haven’t heard already, people are protesting on Wall Street and it’s not the bankers demanding more deregulation or some garbage like that. No, this time, it’s the average man and woman, young and old, from all walks of life and political or religious convictions and they’ve been raising their voices against the inequity between Wall Street and the rest of us. They’ve now entered week 3 of the protest and no amount of police brute force, pepper spray, and arrests has deterred people from continuing to pour onto the streets in New York. The protests are now spreading and people are rising throughout the country.
You may be asking yourself as to what the protestors are demanding? The Occupy Wall Street protestors have a list of complaints and one is the student loan debt. There is even an online petition that proposes to forgive all student loan debt in order to boost the economy. Now, you may be wondering to yourself, why the student loan debt? Here’s why my friends.
The student loan debt in this country is now $830 billion! This is higher than the credit card debt, and there are more credit card holders than students. So, as you can see, the student loan debt is a huge burden. Back in the days I was on the slow track of getting my bachelor’s degree, my loan was federally sponsored with low interest rates which I managed to finally pay off in 15 years. Students today are taking on more of the riskiest debt, the unregulated private student loans which offer the least amount of protection and pay the highest interest rates up to 19%! Add to this already unforgiving recipe the fact that the job market is at a standstill you can imagine the impossible scenario facing our college graduates.
Many of those out there on the streets of NY are asking: “You’ve bailed out Wall Street, what about us?” Which if you ask me is a darn good question! By forgiving student loans, we can help boost the economy because we’re putting hundreds of dollars a month back in the pockets of the middle-class families and helping young people who’re entering the workforce. Okay, now you’re probably still wondering, what does this have to do with Wall Street? A great deal my friends, a great deal. Just as Wall Street helped spur the housing bubble with mortgage-backed securities, they’ve also spurred the student loan bubble with student loan asset-backed securities. This means that Wall Street capital has encouraged really aggressive marketing by high-interest private loans to students and now what we see is student loan defaults that jumped 26% last year. And just as foreclosed home loans keep dragging the economy and limiting people’s choices, so do private student loans. But while people can walk away from a home loan through filing bankruptcy, the same can’t be said for student loans.
All this is also a testament to how messed up our entire educational system has become that in order to get an education and remain competitive with the rest of the industrial and emerging nations, rather than nurture and financially support our future generations of scientists, nurses, teachers, artists, doctors, and engineers we saddle them down with backbreaking student loan debts. Way to go!
For those who balk about government intervention, I say, why not channel some of those extra billions of dollars going out the door to Afghanistan, Pakistan and Iraq for example, and direct them into an education fund for our students right here. Students who benefit from these federally funded loans upon graduation will pay off their debt by doing for instance say 2 years of community service, or joining the Peace Corps, or AmeriCorps where they will gain invaluable work experience.
So what do you think? Isn’t it time that we gave the same immunity to our students as we did to the banks? At least we can be safely assured that by forgiving the student loan debts, our young graduates can turn around and start a life rather than be indentured servants of a bank. They’ll help boost the economy, something we’d naively thought the banks were going to do once they were bailed out. Boy, were we duped!
The Frustrated Evaluator