Tuesday, April 7, 2015

"There's a crisis, but we can't say that . . ."

"There's a crisis, but we can't say that . . ." This was the refrain in the winter of 2010, shortly after I had returned from the bitter cold peninsula of South Korea to a bitter cold Washington, DC in early January. I don't know how I made it back to the center of the world Empire being that I was penniless. But somehow I'd managed to do just that, and not only was I meeting with staffers but even a few Congressional leaders. At that juncture, they agreed with me wholeheartedly, even one member of Congress who was on a committee related to education: there was a student loan debt crisis, but that's as far as they'd go. They wouldn't really discuss it - save for perhaps a few - publicly.

My, how times have changed! Democrats and Republicans are talking about the student loan debt crisis.

Mark my words: this will be a focal point for the upcoming 2016 Presidential election.


Anonymous said...

While it may be a political focal point in the election, I think the question is, will the future president actually act on his or her campaign promises? I am growing pretty sick and tired of politicians pretending to empathize and then forgetting about it a day later. When you live with this day in and day out - when it affects your very ability to have a family an you've been turned down for a house because of your student loans, you don't forget so easily. It's time.

Anonymous said...

Your experience is very interesting. Does DC really not know how big this issue is when they are watching the erosion of repayment of loans in real time? The NY Fed Reserve did a study recently on student loans, the burden on the rest of the economy from them, and repayment rates on loans (or lack thereof). Hint: the loans are unaffordable and are not being repaid. DC can ignore this, but they cannot make it go away. They can deny us legal equality and bankruptcy protection, but that does not get them repaid.

I think a revolt is in order. The Corinthian 100 should become the federal and private borrower 40 million.

Anonymous said...

The vast majority of that debt is $25-35k at 4% interest. That's only $1k a year in interest, or about $83 a month.

If that isn't affordable, then the debt doesn't even matter because it means the broad economy has completely collapsed. That is why this isn't a real issue.

If someone can't afford a $250 a month student loan payment, they're NOT going to be buying cars or homes or in any way stimulating the economy at all.

They have no idea how to fix the broad economy, or rather, no desire to. It would mean reducing some corporate profits and sharing some of the wealth, which they'll scream is socialist or communist. So forget it.

That debt is just funny money, it doesn't even matter. They're probably expecting a full collapse where everything gets wiped out, so they won't bother handling it now. Probably half the country will just declare bankruptcy and then just ride that out, like during the Great Depression.