Thursday, August 15, 2013

Training for Careers That Don't Exist

Of course the ONLY sectors of the economy benefiting from students going into massive amounts of debt are educational institutions and student loan lenders. Because the economy is in the absolute shitter thanks to our "elected" officials in Washington who refuse to do a goddamned thing about it until we are all living in shacks and making a dollar day to compete with China, employers are "requiring" everybody have a college degree. People who refuse to get one find they can't find much in the way of work, but those who get suckered into the game and go into monstrous debt to get a degree find that they can't get work anyway. Then they default on the loans, which can ruin their chances of EVER having a life.

But it's a win-win for the debt collectors because student loan debt can't be discharged in bankruptcy.

It's all going to come to a head, I'm afraid.

And it isn't just young people: Mid-career changers find themselves in a pickle to the point they have to worry about some of their Social Security being garnished in their "golden years."


Obama had already set himself up as a great champion of student rights by taking on banks and greedy lenders like Sallie Mae. Three years earlier, he'd scored what at the time looked like a major victory over the Republicans with a transformative plan to revamp the student-loan industry. The 2010 bill mostly eliminated private banks and lenders from the federal student-loan business. Henceforth, the government would lend college money directly to students, with no middlemen taking a cut. The president insisted the plan would eliminate waste and promised to pass the savings along to students in the form of more college and university loans, including $36 billion in new Pell grants over 10 years for low-income students. Republican senator and former Secretary of Education Lamar Alexander bashed the move as "another Washington takeover."

The thing is, none of it – not last month's deal, not Obama's 2010 reforms – mattered that much. No doubt, seeing rates double permanently would genuinely have sucked for many students, so it was nice to avoid that. And yes, it was theoretically beneficial when Obama took banks and middlemen out of the federal student-loan game. But the dirty secret of American higher education is that student-loan interest rates are almost irrelevant. It's not the cost of the loan that's the problem, it's the principal – the appallingly high tuition costs that have been soaring at two to three times the rate of inflation, an irrational upward trajectory eerily reminiscent of skyrocketing housing prices in the years before 2008.

The whole point of those skyrocketing rates was to limit college access. Really, that's what it is about.

The same is true with the ridiculous prices of houses--to force more people into becoming renters.

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