Malcolm Harris remains unsatisfied by the administration’s latest effort to address the rising student debt crisis:
President Obama, Senator Warren (D-MA), and Congressional Republicans have offered different plans that tinker with rates and/or tie them to the Treasury’s borrowing costs. These solutions might depress the embarrassing government profit and save borrowers a few here or there, but none of them even begin to address the root causes of the student debt crisis. They’re Band-Aids on broken limbs, and any answer that includes former students—it’s important to remember not everyone who takes out debt graduates with a degree—paying back the entire trillion-dollar outstanding total is downright cruel. And until policymakers start talking about forgiving existing debt and actively reducing higher education costs, anything else is simply a distraction.
David Dayen emphasizes that student loans aren’t even loans in the traditional sense:
Students currently paying high interest rates should be able to refinance, and reap the rewards of the Federal Reserve’s quantitative easing that asset-holders have enjoyed for so long. Sen. Kirsten Gillibrand’s bill would mandate refinancing on all federal student loans into fixed 4 percent loans, which would benefit 90 percent of all current loans, and save 37 million borrowers around $14.5 billion in the first year alone. The Consumer Financial Protection Bureau has proposed a similar refinancing scheme for private student loans, which the government backstops anyway. The president constantly talks up the glories of refinancing for homeowners to reduce payments; students deserve the same lifeline.
My generation got a cheap college education when we were young, and we’re getting good retirement benefits now that we’re old. Pretty nice. But now we’re turning around and telling today’s 20-somethings that they should pay through the nose for college, keep paying taxes for our retirements, and oh by the way, when it comes time for you to retire your benefits are going to have to be cut. So sorry. And all this despite the fact that the country is richer than it was 50 years ago.