As I read Desmond's book, I was struck by the similarity between the low-income housing crisis and the student-loan crisis. As Martin Luther King observed, "Every condition exists simply because someone profits by its existence." Slumlords profit from renting substandard housing to the poor; stockholders and hedge fund owners profit from for-profit colleges.
And slumlords and for-profit colleges both rely on the government to help them exploit the poor. Slumlords can call on the local sheriff to evict tenants for nonpayment; and for-profit colleges rely on Betsy DeVos's Department of Education to protect their venal interests. Landlord-tenant laws favor the landlords, and the Bankruptcy Code protects the banks, which loan money to students at exorbitant interest rates, knowing that student debtors will find it almost impossible to discharge their onerous debts in the bankruptcy courts.
As Desmond wrote in Evicted, "The United States was founded on the noble idea that people have 'certain inalienable Rights, that among these are Life, Liberty and the pursuit of Happiness." Indeed, the nation's founders considered these rights to be God-given and "essential to the American character."
Desmond argues that "the ideal of liberty has always incorporated not only religious and civil freedoms but also the right to flourish." In twenty-first century America, people need decent housing to flourish and they also need freely accessible education.
But our federal student-loan program is designed to extinguish the American right to pursue happiness and to flourish. The federal government allows corrupt for-profit colleges to lure vulnerable people into enrolling in education programs that are far too expensive and often worthless. The victims are forced to take out student loans. And the federal government stands by to be every student's sugar daddy--distributing about $150 billion a year in various forms of student aid.
The for-profit colleges get more than their fair share of federal money. In fact, many of them receive from 80 to 90 percent of their entire operating budgets from federal student loans and federal Pell grants.
Then when student-loan victims are unable to find well-paying jobs to service their debt, our once generous government becomes a tyrant. The Department of Education opposes bankruptcy relief for nearly everyone--even a quadriplegic (Myhre v. U.S. Department of Education, 2013) and people on the edge of homelessness (Abney v. U.S. Department of Education, 2015).
America will not begin solving the student-loan crisis until our nation's leaders acknowledge that the federal student-loan program is a massive human rights violation that is evicting millions of people from the middle class. Students who took out loans to attend for-profit colleges have been especially hard hit; almost half the students who took out loans to attend a for-profit college default on their loans within five years.
Student debtors are defaulting at the rate of 3,000 people a day, which ruins their credit and leaves them vulnerable to having their wages garnished. The government can even seize part of an elderly defaulter's Social Security check.
How can higher education return to decency and sanity? First, we must remove Betsy DeVos from her post as Secretary of Education. DeVos is about as qualified to run the Department of Education as the late Charlie Manson. And then we must revise the Bankruptcy Code to allow honest but unfortunate student debtors to discharge their loans in bankruptcy court. And finally, we must shut down the for-profit college industry, which DeVos so assiduously protects.
|Student-loan debtors: Evicted from the middle class|
Abney v. U.S. Department of Education, 540 B.R. 681 (Bankr. W.D. Mo. 2015).
Matthew Desmond. Evicted: Poverty and Profit in the American City. New York: Broadway Books, 2016.
Myhre v. U.S. Department of Education, 503 B.R. 698 (W.D. Wis. 2013).
The Wrong Move on Student Loans. New York Times, April 6, 2017.