Bank loan

Student loan forgiveness treats symptoms but overlooks illness

Since the spring, the Biden administration has canceled the student loan debt of certain groups of students. One such group consisted of graduates of the ITT Technical Institute, a school accused of misleading students about job prospects, earning potential and credit portability. Before that, there were disabled borrowers, and before that, graduates of Corinthian College, a so-called for-profit college also accused of misleading students.

But these “targeted relief efforts” treat the symptoms while neglecting the disease.

Any action on the cancellation of the student loan should only take place after a real discussion of a more radical reform of higher education, including its finances.

Cases of graduates with disabilities, or graduates of ITT and other “for-profit” colleges are mostly hijackings, and the schools themselves serve as scapegoats for the sins that many institutions, such as law schools, commit. Devoting airtime to these limited cases creates the illusion that irresponsible schools and hardship cases caused by student loans are rare. Casual observers might think that the mainstream higher education system is, for the most part, healthy.

Of course, the opposite is true—more higher education institutions are not only irresponsible but predatory; and difficult cases are the norm, not the exception.

According to the Department of Education, US student debt now stands at more than $ 1.7 trillion, or $ 739 billion more than the country’s outstanding credit card debt. That burden is carried by more than 40 million Americans, most of whom are not disabled and have attended respectable, accredited institutions, rather than for-profit colleges or other seemingly shady operations.

On average, they earned $ 30,000 to $ 40,000 in student debt (although graduate degree holders owe much more). This is more than double the amount paid by graduates just 20 years ago. The cost of a college education has increased at an annual rate of more than twice the rate of inflation and faster than any other economic sector.

Since these loans are amortized with interest, the actual amount repaid is often more than double the original unpaid balance – and sometimes much more than that, if fees are charged for deferrals or withholdings and interest charged during these periods are then added to the principal.

Although income varies by field, the majority of graduates can only hope for modest salaries. Pay levels for university graduates have stagnated, confirming that tuition fees do not correspond at all to the true market value of a degree. Most of these graduates will repay their student loans for most of their working lives; this obligation will prevent or delay the acquisition of property, the constitution of a family and any real constitution of patrimony. While sources often report that about 15 percent of all student loan borrowers are in default at some point, that figure is now considered a dramatic understatement.

WASHINGTON, DC – JUNE 15: As students across the country graduate with massive debt, advocates display a hand-painted sign on the Ellipse outside the White House calling on President Joe Biden to sign an executive order Student Debt Cancellation June 15, 2021 in Washington, DC.
Paul Morigi for Nous les 45 millions / Getty Images

Meanwhile, the schools that got the money – but not the debt – will continue to spend it and thrive, especially on DCI (Diversity, Equity and Inclusion) bureaucracies. These administrators enjoy good salaries and a growing number and power on campus. Many use this influence to push overt anti-Americanism and neo-racist agitprop under the guise of tolerance, non-discrimination, security and equality.

With rising tuition fees, middle-class Americans are literally funding the salaries of their opposition in today’s Cold Civil War – in fact, they are mortgaging their own futures for it.

To top it off, those same graduates, after spending so much time and money on degrees, don’t even get a quality education (with the possible exception of some STEM degrees). According to various indicators, recent college graduates know less than their predecessors about world history, American history, civics education, and American finance, among other topics. They also have lower skill levels in reading, writing, and critical thinking.

In fact, many surveys show that students to lose knowledge during their undergraduate years.

Given this situation, a moratorium on higher education funding – to allow for a close examination of declining quality and rising costs of colleges, before another crop of debt-ridden graduates and marginally qualified is produced – would be appropriate.

But instead, the Biden administration continues to throw crumbs at those obsessed with the symptoms, not the disease.

Two adages come to mind: “if something cannot last forever, it will not last”; and, “if you owe the bank a little money, the bank owns you; if you owe the bank a lot, you own the bank.”

If public officials continue to test this, young Americans might realize the might of their numbers and take matters into their own hands.

Hopefully they target the real bad guys in this story: the politicians who said “everyone should go to college,” seduced the kids and created a system that enriches schools but impoverishes young people; and institutions that line their pockets, unleash their politics, and give students ideology rather than education.

Teresa Manning is Policy Director at National Association of Academics and vice-president of the Virginia Association of Scholars. She is also the author of Dear colleague: The armament of Title IX.

The opinions expressed in this article are those of the author.


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