Good education only for the wealthy: In 2013 the Department of Education earned $50.6 billion from student loan interest. Over the past five years the program has generated nearly $120 billion in profit. The most common type of educational loans made to students are guaranteed by the government under Stafford Loans. ALARM BELL: Congress sets the interest rate. The current interest rate is a whopping 6.8. In 2013 a bipartisan committee sought to lower the rate to 3.5, but Republicans in the House of Representatives killed the student relief proposition.
20 million Americans attend college each year. Some 12 million borrow annually to help cover costs. In June 2010, the amount of student loan debt at $830 billion exceeded the amount of credit card debt held by Americans. 80% was federal student loan debt and 20% was private. In October 2011, student loan debt exceeded $1 trillion. The rise of student debt is the direct result of Republican demand for a high interest rate.
Critics of financial aid claim that, because schools are assured of receiving their fees no matter what happens to their students, they have felt free to raise their fees to very high levels, to accept students of inadequate academic ability, and to produce too many graduates in some fields of study. These same critics focus on blaming and punishing the victim instead of punishing the perpetrators. The Republican House is telling the public that the solution to skyrocking student loan debt is to maintain high interest rates to keep more students from taking out loans, rather than lower rates, and limit University fees and institute reasonable policies. Republicans would prefer fewer students attend Universities than to lower interest rates.
In 2007, the Attorney General of New York State investigated practices and anti-competitive relationships between student lenders and universities. Many universities steered student borrowers to “preferred lenders” that charged higher interest rates. Some of these “preferred lenders” allegedly rewarded university financial aid staff with kickbacks. This led to changes in lending policy at many major American universities. Corruption and High Interest Rates are the cause of student debt. Conservatives have to stop blaming the victims who are trying to get ahead, and start blaming criminals who legislate policies that restrict privilege to wealth.
Richard Dorsey, Hacienda Heights, CA.