STUDENT DEBT, FISCAL TERRORISM
I never did get a college degree. At 76, it's a little late in the game to be either flattered or flattened by this fact. It's just a fact that rests comfortably next to the rough-cut conclusion that a college degree isn't worth much ... unless you haven't got one.
But none of that means I cannot be upset on behalf of the college graduates who leave the halls of academe burdened by a debt load that has them constantly glancing back rather than looking forward. From where I sit, that debt borders on the criminal. Luckily, I have a solution to the problem. But more about that in a moment.
In late June, just about the time the University of Massachusetts at Amherst was considering raising its prices five to eight percent, Asnuntuck Community College in Enfield, Conn., announced that Massachusetts residents would henceforth be charged the same rates as in-state students -- a $2,084 price break. Besides Asnuntuck's attempt to address a dwindling national birth rate/income stream, I wondered whether students were staying away because they were discovering chinks in the glistening armor of a college education. True, there were gold-coast professions that required academic training, but what about "the (majority) rest of us?"
Currently in the United States, 42 million people owe $1.3 trillion [TRILLION, NOT BILLION] in student debt. This debt pool is second only to mortgage debt. And when I whimsically polled five or six twenty-something college grads on my block, I found that each of them was carrying some of the debt load, ranging from $27,000 to over $150,000. This was not some carefully-ignored, crime-riddled ghetto neighborhood problem that anyone could drive around. It was right next door. It was our kids and our future as a nation.
Less superficial than my own neighborhood whimsy, a Consumer Reports survey of 1,500 Americans with student debt found that 45% felt that college had not been worth the burden; 44% wanted to know how much student debt a person had before beginning a meaningful relationship; 28% delayed purchasing a house; and 12% delayed marriage based on student debt. Am I wrong or does that sound as if the shared values of a prosperous middle class were eroding? Home, family, and employment shudder in the face of the money stream being sucked out of what not so long ago were smiles and cheers and mortar boards tossed in the air.
Follow your dreams? What dreams?
Earlier this month, the internet's Center for Investigative Reporting ran a well-researched article entitled, "Who Got Rich Off the Student Debt Crisis?" In its forward, the article observed:
"A generation ago, Congress privatized a student loan program intended to give more Americans access to higher education.
"In its place, lawmakers created another profit center for Wall Street and a system of college finance that has fed the nation’s cycle of inequality. Step by step, Congress has enacted one law after another to make student debt the worst kind of debt for Americans – and the best kind for banks and debt collectors."
Should students pay their debts? Yes. Should they be forced to shoulder interest rates that typically range from 5.8 to 8-plus percent and benefit private firms rather than the government that is backing the loans? Should students be leaving college owing what amounts to a downpayment on a house without a house to live in? And how is it that a mortgage rate can be negotiated downward, but a student loan, to all intents and purposes, cannot?
We seem to be in an era when a rising economic tide does not lift all boats. Instead, it elevates all yachts.
But the yachts are rising at a price, if Christine Lagarde, CEO of the International Monetary Fund and hardly a card-carrying lefty, is to be believed. Yes, it is possible to suck the financial marrow out of the likes of college grads, but the social and economic result, Lagarde suggested in a recent speech, is a "new mediocre" in which neither those with boats nor those with yachts benefit. The entire economy slows and the nation is diminished because everyone is busy making the money for "another" yacht. When indicators point towards a "new mediocre," what room is left for an excellence that encourages the economy and its people to thrive and invent?
Well, here's my suggestion: Fiscal terrorism statutes. It is frightening to be in debt. Under fiscal terrorism laws, the Department of Homeland Security, which to date seems to have specialized in rounding up young people who barely have their acne under control, would be empowered not just to arrest and prosecute those sucking the financial marrow out of one-time students but, more important, to prosecute those responsible for creating the framework within which such milking of the cash cow is permitted.
In the same way that the RICO statutes are used to prosecute not just the contract killer who pulled the trigger but also the (wo)man who ordered that killing, fiscal terrorism statutes would root out those intent on holding so many Americans in financial thrall. No longer would it be enough to wear an American flag lapel pin and get re-elected. Under fiscal terrorism statutes, it would be a crime to terrorize vast swaths of right-next-door Americans and sell out a healthy American future.