Rock and Roll is here to stay.
It will never die.
It was meant to be that way.
Though I don't know why.
Danny & the Juniors
As Danny and the Juniors so eloquently reminded us, some American phenomena are perpetual and will never die. Rock and Roll falls in this category, and so does the Federal Student Loan Program.
According to Rohit Chopra, the Student Loan Ombudsman for the Consumer Financial Protection Bureau, total student-loan indebtedness under the Federal Student Loan Program grew by 20 percent in just 18 months! Total indebtedness now tops out at $ 1.01 trillion. In addition, total student-loan indebtedness to private lenders is $165 billion. So--total student-loan debt now approaches $1.2 trillion.
By the way, how would you like to have Rohit Chopra's job--Student Loan Ombudsman for the Consumer Financial Protection Bureau? It must be something like a medic's position in a World War II concentration camp--handing out aspirins to inmates slated for oblivion.
|Turn out the lights. The party's over.|
I'm a realist. I know the federal student loan program cannot be dismantled. The American higher education community absolutely depends on it, and most for-profit colleges could not exist without it. The for-profit colleges have powerful lobbyists, and we will never get the for-profit colleges out of the feeding trough.
Nevertheless, let's at least try to impose some level of decency on this train wreck of public policy.
First of all, let's treat the wounded. Let's stop garnishing the Social Security checks of elderly student-loan debtors who defaulted on their loans. Let's give student-loan debtors reasonable access to the bankruptcy courts. Let's make all student loans subject to state consumer-protection laws so injured students can sue college and universities who entice people to take out student loans through fraud or misrepresentation.
Second, let's try to stop the growth rate in student-loan indebtedness by encouraging low-income students to attend community colleges that have low tuition rates instead of borrowing money to attend more prestigious institutions. Because you know what? If you are poor you shouldn't be borrowing money to attend Harvard; and besides you probably wouldn't like it anyway.
Third, let's crack down on colleges and universities that raise their tuition every year because they can't control their costs. It is a scandal that university presidents like Ohio State University's Gordon Gee and New York University's John Sexton make more than $1 million dollars a year (far more actually) while college students across the country are borrowing more and more money every year to attend college.
American college students are tapped out. According to Ombudsman Chopra's remarks, people with student-loan debt are now less likely than other people to have home mortgages or outstanding auto loans. Why? Because many people are now so burdened with college-loan debt that they can't participate in the consumer economy--they can't buy homes or purchase cars.
For years now, colleges and universities have been singing a variation of Rock and Roll is Here to Stay; they think the student loan program was meant to be this way and will never die. But if we don't reform this program soon, higher education will be singing a different tune, this one by Willie Nelson.
"Turn out the lights. The party's over."
Rohit Chopra. Student debt swells, federal loans now top a trillion. Excerpted remarks from speech given on July 17, 2013. Accessible at: http://www.consumerfinance.gov/speeches/student-debt-swells-federal-loans-now-top-a-trillion/