Crushing Debt And The Immorality Of Student Loans

Hardly anything can be considered more noble or worthwhile than the human pursuit for knowledge. Science, in particular, has advanced us along an incredible path. The fact that you are reading this article, considering our origins, is simply amazing.

Here in America, all of that is in danger. Our educational system has resulted in enormous amounts of student loan debt — an aggregate value of over a trillion dollars. The price for college has increased at a much faster rate than inflation in the economy as a whole, for a variety of reasons. Many potential students are wondering whether a college education is worth the money at all. Sure, you’ll make more money. But being stuck with a hundred thousand dollars in student debt, with $900 payments every month, takes away from that money pretty quick.

And unlike other types of debt, you can’t obtain relief from student loan debt through bankruptcy or by simply not paying. Debtors for student loans can garnish your wages, tax returns, and even your social security.

All of this has caused NYU professor Andrew Ross to reconsider the morality of a higher educational system that requires students to incur large amounts of debt. He’s a founder of the “Occupy Student Debt Campaign,” a movement to gather signatures from supporters pledging to withhold their student loan payments en masse in order to send Wall Street and the U.S. Government a strong message about our need for reform. On The Daily Beast, Ross strongly states his case for the immorality of student loans:

Taking out hefty student loans has become a normalized feature of college life. No doubt, this smooth routinization helps to ease the guilt of the admissions officers who are paid to reassure recruits that high-interest loans are still a solid investment in their futures. Those with less conscience have been caught colluding directly with lenders. Parents, for the most part, don’t ask too many questions. They are cowed by the prestige of colleges or are anxious not to puncture their children’s aspirations. As for the borrowers themselves, most are not old enough to drink when they are approached, like subprime-mortgage dupes, with offers they cannot refuse.

Equally problematic are the terms of the loans themselves. Unlike almost every other kind of debt, student loans are nondischargeable through bankruptcy, and collection agencies are granted extraordinary powers to extract payments, including the right to garnish wages, tax returns, and Social Security. The market in securitized loans known as SLABS (Student Loans Asset-Backed Securities) accounts for more than a quarter of the aggregate $1 trillion student debt. As with the subprime racket, SLABS are often bundled with other kinds of loans and traded on secondary markets. With all the power on the side of creditors and investors, it is no surprise that student lending is among the most lucrative sectors of the financial industry. As for federal loans, they are offered at unjustifiably high interest rates—far above those at which the government borrows money.

In the years since the financial crash, the debts of banks are still being written off while the little people are expected to pay back theirs. In the absence of debt relief, which Congress does not want to contemplate, the aggrieved are beginning to talk about the double standard, and about debt refusal and debt strikes. Under the circumstances, civil disobedience like this may be the only truly democratic option.

The burden of debt has become the lens through which I see my workplace, and it is rapidly altering my view of my profession. I can no longer fulfill my classroom duties without wondering if the ultimate price, for many of my students, is a form of indenture. This is not an extreme way of putting it. After all, the indentured have to go into debt in order to find work, and their wages are then used to pay off the debts. I have concluded that it is immoral to expect young people to privately debt-finance a basic social good like education, especially if we are telling them that a college degree is their passport to a livelihood that is increasingly thin on the ground.

Here in America, how can we expect to stay on the cutting edge of technology and innovation if we cannot afford higher education for our children? How can we expect any degree of literacy, globally competitive math skills, creative and critical thinking, or freedom from superstition? I expect to hear cries of “socialism,” but in this day and age we should all have a right to the education required for productive careers. There’s a time for reform, and that time cannot come too soon. The longer we wait, the more the current generation of college students is damaged and the worse the system becomes.

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