The president ran against debt predators, drug makers and big banks – once elected, he immediately got in bed with all of them
I had a research assistant position and later a fellowship during my graduate studies, both supported with public money. I still had a few dollars to my name when I began my career almost exclusively working on problems of public interest and paying my students with public funds. In other words, I was able to pay it forward, which is how it is supposed to work. Debt slavery is a cruel joke and I am glad I escaped the madness and weep for those mired in it.
All of us in the 60s escaped student debt because higher education was almost free, or free, and this was apparently an anathema for the oligarchs…because it was shut down in the 70s durning increased globalization and off-shoring of jobs.
No education is like a farmer eating his seed corn for the coming year(s).
Was surprised to see that who is getting the student debt
Looking at the top-ten by default rate, it doesn’t take a PhD in data science to recognize some patterns. Nine of the ten are beauty schools. Of the nine the Rob Roy Academy, appears twice, representing two different schools. Rob Roy is also in fifteenth place taking a full one-third of the top slots for the fifteen highest school default rates. The one school not in the top-ten that is not a beauty school is a tribal school, probably struggling with first-generation students.
Twenty-four of the top thirty with the highest default rates are cosmetology schools. It’s not a lack of name-brand cosmetology schools: Paul Mitchell Cosmetology School has strong reviews but one of their many schools sports the twenty-fifth highest default rate, 34.3 percent, of the 4,712 schools in the dataset. There are 64 different schools that reference the Paul Mitchell name. Since some reference being a “partner” it’s probably fair to say they’ve licensed the name, franchise style. It’s unclear why a school would need to license a name.
And I would guess that this is another blow to minorities as well because they might hope that this training would be their ticket to a livable wage
student debt needs to be wiped clean and the entire system rethought in the public interest.
sadly, that’ll pretty much take a revolt to get that going.
all Gold Sacks has to do is smell a nickel somewhere in the train wreck and you can be sure there will be no legislative relief.
A couple thoughts:
One key point to note in that article you cited:
These programs would not exist but for the availability of non-dischargeable student loans. It’d be bad enough if this were merely a waste of taxpayer money but these are loans, for worthless degrees, that will saddle these students with junk debt for years or decades. Common sense reforms – specifically, throwing more schools off the eligibility list earlier – seem like no-brainers.
And a point to note in Taibbi’s article:
The bank noted that an astonishing 10 percent of all student borrowers are currently at least 90 days behind on their debt, compared to just 1.2 percent of mortgage holders. It’s the highest delinquency rate among any form of consumer credit.
The solution isn’t to forgive student debt - which puts the burden on the taxpayers. The solution is to make the loans dischargable in bankruptcy Lenders are very good at judging credit risks - they make a very good living at it. If you simply put the risk to the lender back in the loan, the loans for all those beauty schools and secretarial academies are going to dry up overnight, and those people getting the loans are going to be the ones who will actually benefit from the education.
Matt Taibbi has written a very good synopsis in this article, about a ticking financial bomb that will eventually, inevitably, explode! The Finance sector and the colleges/universities will make gobs of money in the meantime, and the taxpayers will get royally screwed in the end.
This Administration and this Congress have no sense of shame, and no concern for the present or future welfare of the bottom 90%. We are a resource, a commodity, to be exploited for the benefit of the wealthy. This will not change unless and until a massive uprising or some unrelated major catastrophe occurs.
The “PROSPER Act” indeed! The names they give these policy abominations are a joke!
Yes, some will prosper, albeit at everyone else’s expense!
Here is a quote from nearly a century ago:
“The private control of credit is the modern form of slavery”.--------Upton Sinclair
Good post! It is ironic that a Nation whose future will be so dependent on a well-educated citizenry should be making it ever more difficult for the average citizen to become educated.
Apparently short-term profits trump (forgive me) everything else.
WTF we taxpayers our on the hook? why in “H” did we not just be the lender of choice instead of the giant squids? oh, I know why it is the republicans that seem to always be in control whether it is dem admin or repug admin. Why is that? they just double team us?
They are protecting their golden spoon, silver lining heirs to be the future rulers. Sad.
The solution is the Federal Government be the lender and/or each state have their own banks investing in the future of our country and their state. But corporations are starving states and federal government and we taxpayers keep giving them more benefits.
Just another, “Grand Old Prostitute.”
Not at all. If the government becomes the lender, all we do is leave the taxpayer to pick up the bill, because it doesn’t address the issue of bad loans being made.
We’re on the hook anyway right now so why aren’t we lending at a lower rate and realizing the profits from the interest which protects us from the 10% that can’t get a job after graduation and we can make the terms not the GD banks.
These kids are the future or do you want the banksters kids to rule.
The objective is to stop subsidizing the banks. By not allowing people to relieve loans in bankruptcy, we’re guaranteeing the return for the banks, and encouraging bad loans (read the article @DonMidwest cited). If we allow discharge in bankruptcy:
- The banks assume the credit risk, not the taxpayers, or the government;
- Because of the significantly higher risk associated with the fly-by-night “higher” education companies, no one will loan to those students.
- And as a result, those kids that aren’t going to be able to find jobs based on the bogus certifications aren’t going to be incurring the loans in the first place because they won’t get written.
This article kind of points out just how Wall Street, banks, and hedge fund managers view the student debt bubble…https://www.caseyresearch.com/buy-this-stock-to-profit-from-the-student-loan-bubble/
nycat - that article is exactly WHY we need to allow those debts to be discharged in bankruptcy. One of the reasons the bankers cleaned up on the subprime mortgages was because those mortgages were insured by the government. Individual can’t pay? Who care? Fannie and Freddie will cover it. Banker wins if you make the high interest payments, banker wins if you default. Same thing with student loans - banker wins if you pay the interest, and since you can’t get out of the loan, banker always wins.
If the loan can be discharged in bankruptcy (or in the subprime loans, there’s no mortgage insurance) then the banker is on the hook if the loan goes bad. As soon as the banker has to shoulder the risk, they’re going to be a lot more careful about who they encourage to borrow.
The other culprit that isn’t mentioned in the article is the schools themselves - and not just the beauty academies, but even the “hallow halls” of real colleges. Over the past 30 years, the cost of college tuition has increased at 2x - 3x the rate of inflation. Colleges know there’s “cheap” money out there for people to borrow, and so they’ve become bloated with huge numbers of administrators who add nothing to education, and courses that don’t provide any marketable skills to students. Between the lenders, the “bad actor” schools and the schools that have convinced themselves that they really need that new football stadium, those 30 extra deans of student life and courses in television appreciation, they’ve managed to ensure that most people are in debt to their eyeballs before they ever get a paycheck.
Yes. The oligarchs figured out that access to nearly free education was a big part of what caused the student unrest during the 1960s, so they decided to make access to it more and more a privilege that required, for many, entry into debt serfdom. People who are working two or three jobs to repay student loans, or who are working while going to college to avoid undertaking debt, don’t have time to protest imperial wars or the other depredations of empire.
At one time student loans were dischargeable in bankruptcy under fairly reasonable conditions. Banking industry pressure put an end to that and the requirements for discharge are there but very burdensome and most cannot meet those requirements or can’t afford a lawyer to pursue an adversarial challenge.
Why minorities rather than low-income (aka poor) people? Because that is what you mean, right? Not all people who are “minorities” (interesting term, that) are poor, but all poor people are poor. Makes more sense unless you are pretending class doesn’t exist or that poverty is confined strictly to “minorities”.