Friday, June 07, 2013

An Uneducated Society Can't Succeed-- Or Even Survive


In less than a month, if Republicans keep obstructing any progress, certain student loan rates will double, making a college education even more out of reach for the children of working class parents. This isn't the problem itself; it's a symptom of a much greater problem. The wealthy, greedy and far too entitled plutocrats who have been increasingly calling the shots in American politics-- owning one party outright and pretty much controlling the other one-- have decided free, high-quality, universal education isn't worth paying for. So while Obama was in North Carolina yesterday announcing that he would like to see "the nation’s classrooms transformed into digital learning centers and he is ready to ask federal regulators to use billions of dollars to pay for the broadband and high-speed Internet connections that will be needed to make it happen," the American plutocracy that financed his career, McCain's career and Romney's career already had a long-standing policy of easing out and discarding the whole concept of public education in America firmly in place.

Elizabeth Warren noted to her supporters that the Senate had a big test yesterday-- and flunked it. She pointed out that Senate Republicans filibustered a vote on the Reed-Harkin Student Loan Affordability Act-- legislation that would freeze federal Stafford student loan interest rates at 3.4% before the big July 1st deadline. A majority of senators voted to shut down Miss McConnell's deranged anti-student filibuster, but every Republican plus multimillionaires Joe Manchin (D-WV) and Angus King (I-ME), killed the amendment by defeating cloture. "Let me just make it clear," wrote Warren. "This wasn’t my own bill to help students more by lowering interest rates to 0.75%, the same rate the banks pay. This was a bill that would simply extend the current 3.4% rate for two more years... Are we really a country that wants to push our kids tens of thousands of dollars into debt to go to school? Or are we a country that believes investing in our kids-- from Head Start to college-- to put the conditions in place so that everyone has the chance to succeed?"

She probably knows the answer to that question. The deck is stacked against us-- which reminds me of a George Carlin video I haven't watched in a while, The American Dream:

Van Jones has a different way of expressing some of the same ideas-- and he did so for CNN this week. His point is societal, not just something that impacts students. "The approximately $1.1 trillion in student debt out there already," he warns, "constitutes a crisis for every one of us." Like anyone with a lick of sense, he understands why Elizabeth Warren's proposal to cut student loan rates to 0.75% is something that wouldn't just be great for students but for the whole society.
It is the only form of household debt that has continued to rise during the Great Recession. It is also the only form of debt that cannot be discharged under bankruptcy or even death, as parents who have lost children have discovered to their horror. It is preventing young people from buying homes and starting businesses.

In short, student debt is a $1.1 trillion anvil dragging down the entire U.S. economy.

Unfortunately, the conversation in Washington is not about big fixes, but simply how to avoid making matters worse by letting interest rates rise.

...A few weeks ago, Warren, D-Massachusetts, proposed groundbreaking legislation that would give students the same deal that big Wall Street banks get. This bill is good policy, and even better politics.

After all, why are we loaning money to mega-profitable international financial institutions at 0.75%, but demanding up to nine times more from our own young people?

By comparison, the otherwise ideal Harkin-Reid proposal for a two-year extension of the current 3.4% rate is simply not as ambitious.

Unfortunately, the proposals with the most energy behind them are worse than both these options. House Republicans, the Obama administration, and a number of senators are all pushing to permanently tie the rate for student loans to the government's borrowing costs.

It may seem commonsense, but the devil is in the details.

For instance, the Republican plan passed recently is just plain bad for students. Interest rates on July 1 would actually be higher than 6.8% for some borrowers, and vary wildly and unpredictably over the lifetime of the loan. The government would mark up the costs 2.5% to 4.5%, based on the type of loan. The profit would pay down a deficit young people did not create, instead of funding education.

The Obama plan, by contrast, has better terms for borrowers and would offer fixed-rate loans that will not suddenly spike in cost. But it lacks any cap on how high interest rates can go, and continues the worrying practice of the government profiting off student loans.

As for borrowers who already have loans? Sen. Kirsten Gillibrand, D-New York, has proposed allowing students to simply refinance their old loans at today's historically low rates. It is almost shocking that you cannot do this already. California Democratic Rep. Karen Bass' Student Loan Fairness Act would make repayment fairer and easier.

Young people should be rallying behind the Warren, Bass, and Gillibrand bills. But they can and should demand a whole lot more.

The problem is not just that the cost of borrowing could go up. The real problem is the skyrocketing cost of tuition that is forcing students to take on unmanageable levels of debt in the first place. It is in our leaders' own best interests to do something about that.

After all, millennials will make up one-third of eligible voters in 2020. It is no accident that the two best Senate bills were introduced by senators-- Warren and Gillibrand-- who have been rumored as future presidential candidates.

But at the end of the day, this is not a student issue. It is not a youth issue. This is a corrosive crisis that touches your life whether you know it or not. If you live in the United States of America, this is your issue.
I don't get out much. I just sit and blog all day. When I worked at Warner Bros. all the employees had been well-vetted and they all did their jobs well and if they started performing badly, there was an institutional policy of trying to help straighten them out-- like with free drug counseling, for example-- and then, if they weren't performing in a way that was conducive to a well-functioning, successful company, they would have to find another job someplace else. That rarely happened. Since leaving, I've realized how good I had it at Warner Bros. Everywhere else all I run into is grotesque incompetence and people who wouldn't last a week at Warner Bros. I've been spending a lot of time at the UCLA Medical Center in the last few months. Don't get sick. (This will make you sick and, I swear, isn't worth it.) Other than the doctors (fingers crossed) no one seems qualified to do their jobs at UCLA. It's as bad as going to a bank. The people who work there are uneducated, incapable of problem-solving, divorced from the joys of doing a good job, and, worst of all, a danger to the well-functioning organization. That, I've come to conclude, is because society doesn't want to invest in good universal education.

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At 4:01 PM, Anonymous Anonymous said...

You sound a little nostalgic abt WB.
Remember this little gem from War Games?

Good times.


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