On Student Loans

 Traps & Scams & Rackets Aside, Understanding Student Loans Lies Near the Center of Comprehending the Current Pass

A BRIEF AND A LITERATURE REVIEW

Introduction

Perhaps the easiest way to provide the background that This Humble Correspondent envisions as critical is as a simple series of bullets, demarcating what underlies the overall concern here with a trillion-dollar mire of debt threatening to swallow millions of youth.

  • The first subtopic to note in the case of investigating student loans is a confluence of all the overall underpinnings of university education generally, a topic that the Stanford Encyclopedia of Philosophy  introduces in a useful and thorough fashion in its entry about Philosophy of Education; though this long and complex mini-monograph will reward close attention, a central thread is that dispute among those who would explicate what precisely educational philosophy is has ranged between poles that were materialist and critical, on the one hand, and functionalist and pragmatic on the other hand, an opposition that is obvious within the first minute of investigating the ‘student-loan problem.’
  • A second aspect of today’s subject-matter is the first hundred years or so of higher education in the U.S., for which a superb introduction remains Herbert Bowles and Samuel Gintis’ Schooling in Capitalist America: Educational Reform & the Contradictions of Economic Life; though focused on primary and secondary education, these authors make clear what other analysts of a radical and critical bent echo about all levels and types of learning, to wit, “Our distress at how woefully the U.S. educational system was then failing these objectives (basically, equal access, a chance to excel, and overall equity) sparked our initial collaboration.  Its continuing failure has prompted our recent return to the subject.”
  •  Today’s underlying components also encompass developments that flowed out of the growth of engineering and other highly specialized technical fields and professions, in pursuing which one might look long and hard for a better overview for workers and trade-unionists than that provided by Harry Braverman in Labor & Monopoly Capital: the Degradation of Work in the Twentieth Century; though Braverman’s magnificent work provides a range and depth that take it well beyond any focused look at ‘higher education’— demonstrating repeatedly the aphorism that “Machines were, it may be said, the weapon employed by the capitalist to quell the revolt of specialized labor”—the intersection with schooling-as-escape, and the traps that sprang shut despite attempts to break free, is everywhere apparent, as in this monograph, devoted to ‘rereading’ Braverman’s work: “We tried every bad job we could get and they were all just as bad as we’d hoped they wouldn’t be.  The better jobs … .seemed somehow to be beyond our grasp.  What we learned later, of course, was that the better ones-or at least the ones that weren’t too boring or too deadly or too low-paying-were beyond our educational credentials.”  And gaining those credentials required big debts for workers, and then even those jobs themselves began to look like they too would, in the author’s vernacular, “suck.”
  • A fourth subset is the way that empire and its soldiers came to intersect with these matters—the Taylor-time-and-motion engineers and the appropriately ‘schooled’ industrial army won the world by force; and, after all of the sacrifice and glorious technique—from the Manhattan Project to entire aircraft carriers completed in months—though conservative Democrats and Republicans in various ways undermined and on occasion sought to destroy the ‘G.I Bill,’ FDR’s swan song in some ways was the passage of the “Servicemen’s Readjustment Act of 1944”—originally intended to apply to a much broader swath of the population—which laid the foundation for the superstructure to come, of loans and debts that have threatened to inaugurate a new epoch of peonage and servility.
  • Finally, but perhaps most importantly, students and former students themselves, from here in the United States and around the world, are organizing and rising up against the depredations of this system:  Alan Collinge, Amanda Brown, the collective behind Students for Educational Debt Reform, collaboratives in Chile, the United Kingdom, Australia, Canada, New Zealand, and more are working furiously to bring about change.

One might easily continue, but at the very least, these five items require attention, a keeping-in-mind of what lies behind as we ponder the debacle of college financing in these times.

A Briefing, in the Form of a Classically Structured, Five Part Argument

PART ONE–INTRO

One of the elementary errors of political-economic analysis is to see a set of developments, which happen repeatedly without noticeable variation, as an error, or at most as isolated instances of wrongdoing.  One might view various socioeconomic ‘catastrophes’ of the modern era with this in mind—nuclear energy and weapons, the vast viciousness of the ‘War-on-Drugs,’ the apparent insanity of the hypermedication of young children, sub-prime blues and various other bubbles, and on and on and on and on, in every sector of our contemporary lives.

student-loans7

Today, This Humble Correspondent examines what many have termed a debacle, a scam, a hoax, a fraud, the next bubble, and so forth, the looming multi-trillion dollar indebtedness of young working people as a result of their having relied on a system of loans to finance their post-secondary education.  In terms of its economic origins, however, today’s operating system began as rationally chosen policy; in terms of its political initiation, as well, calculated choices have ruled the roost; and in social terms too, clearly articulated underlying rationale suggest that the ‘debacles’ and ‘scams’ and ‘frauds’ and such were nothing if not the conscious elective decisions of those in charge.

Looking at these economic and political and social underpinnings, therefore, one can only conclude that anything other than a systemic, and systematic, approach to solving the monstrosities of the ‘student loan crisis’ cannot grapple successfully with the systemic, and systematic, roots of what has befallen us.  We must, in other words, do more than just struggle for piecemeal reforms: we must imagine a different education system that people control, or all of our reforms will merely deflect, for at best a short respite, the difficulties that pupils and parents and teachers and citizens face in this sphere.  This is a lesson that we have yet to learn: unless citizens take charge of matters for themselves, money and corporate interests will always turn ‘change’ to their own nefarious purposes, leaving the vast majority of us at risk, in debt, and under the gun.

Indentured Student – Donkey Hote

PART TWO—ECONOMICS

The economic rationale for student loans is a many-tentacled beast.  Just a few observations ought to serve to outline key portions of lending’s essential role in contemporary education policy.  First, in various ways, student loans substitute debt for taxes, always a hit with those who have enough money and wealth to face a tax burden.

John K. Galbraith spoke about this tendency in detail in his Money: Whence It Came, Where It Went.  He describes it as a cultural benchmark of the sturdy gentry here in the U.S.  In this vein, that colleges like Berkeley were free or low-cost as recently as 1970—now costing six figures for a full four years—makes perfect sense.  Government policy has transferred the burden of funding the university to the backs of working-class students.

Second, billed as generosity, the programmatic core of funding college through loans is a gigantic exercise in transferring wealth in a direction opposite from generous, from those who have little but might make money in the future to those who own most of everything and want to keep it that way.  Milton Friedman was frank in expressing this element of the idea when he first propounded a model of loaning funds to prospective college bound youngsters.  This troubling aspect of the system in particular manifests more strongly as private loans have come to predominate, and privatization of Sallie Mae and other institutions have accelerated.

Alan Collinge, one of the aforementioned grassroots heroes in this struggle, has written a book about the situation powerful enough to discomfit practically the entire media, political, and cultural establishment.  The Student Loan Scam: the Most Oppressive Debt in U.S. History and How We Can Fight Back offers copious data, both quantitative and qualitative, the latter dozens and dozens of tales of young people’s lives crushed by the weight of ever-increasing compound interest, penalties, and fees that only make sense as a gouging of the already vulnerable.

Collinge’s own story is prototypical in some ways.  Tired of paying 20% of his income to cover roughly $40,000 in loans, which were his only path to obtaining his aerospace engineering degree—leading he hoped to a job that wouldn’t “suck”—he had the temerity to ask his first employer, Cal-Tech, for a raise.  Subsequently unemployed and unable to continue ‘servicing’ his indenture, within a year or so, he found himself the proud owner of over a hundred thousand dollars in liabilities, much of it visited on him through duplicitous or barely legitimate means.  Again, the transfer of wealth from have-nots to plutocrats, in the most inequitable possible fashion, was a part of the fundamental operation of the entire system.

Education

Education

Third, the classically inflationary outcomes of the dynamic in play were so foreseeable that the results—tuition hikes for decades at double the rise of the Consumer Price Index—could only represent planning and policy.  Those who own the world simply cannot be such idiots as to have failed to notice.  Lots of easy money for young people desperate to have a chance at non-“sucking” jobs, who also undoubtedly liked the idea of parties and plenty of other fun, led to soaring administrative salaries, tons of spending on collegiate programs at best ancillary to education, and year after year of higher fees, more charges for room-and-board, and ballooning tuition.

Finally, though additional insidious concomitants of the loans would be easy enough to detail, throwing money and debt at youth seeking a way out and a way up also resulted in the development of a massive—estimated at over $50 billion per year now (http://files.eric.ed.gov/fulltext/ED511120.pdf)—for-profit alternate higher education realm.  Overwhelmingly, these ‘institutions’ target poor pupils, minorities, and other economically and academically disadvantaged populations.  Despite all manner of data, since the late 1940’s, showing that such institutions elicited much higher rates of default on loans, much lower rates of employment in students’ fields of study, and so on, these shadow-schools grew and prospered, seeded by wealthy individuals and financial institutions who were able to recognize a sure thing—getting guaranteed loans for providing a never-needing-to-be-proven set of products and services.

 

PART THREE—POLITICAL ECONOMY

The political economy of the decision to finance education through pauperizing students led to reactionary developments that favored militarism and empire.  This showed up in several ways.  First, supporting militarism and imperial programs became more likely in threefold fashion.  The universities got buckets of money for ‘defense research’ that might have financed general education had student loan cash not been available for that purpose.  A campus culture of accepting the war machine was easier to inculcate in students who were, in essence if not in name, peons.   And in the wider realm of foreign relations, instead of funding anything stinking of ‘liberal education,’ government outreach invited foreign military and police officers, and engineers and scientists devoted to martial applications, to come and study in the U.S.A.

Second, evisceration of planning and programs to achieve social equality or economic democracy has stamped the system.  Grants and scholarships fell as the portion of costs stemming from loans grew inexorably.  Agencies that did not fit into the ‘Great-God-Market’ paradigm diminished and withered on the vine, or faced summary execution of one sort or other.

Third, in place of any potential for community-based or

Teach for America – or Terrible for All?

community-led reform efforts, the student-loan-bubble-machine also intersected with the non-governmental-organization sector’s increased control of educational policy and development.  Teach for America represents merely the best known and most easily documented such case, with loan reductions or dismissal offered as bait for buying-in to anti-labor and anti-democratic projects.

Fourth, the promulgation of fatuous ‘cliques of experts,’ with the upshot being a culture that worships authority, flowed ineluctably from ‘easy-terms’ for financing professional or post-baccalaureate degrees in increasingly specialized ‘disciplines.’  Instead of the interdisciplinary and community-oriented knowledge and debate that is essential to our survival, student loans for such great spirits as Alan Collinge—who ‘escaped’ his fate because the system squeezed too hard for more lucre—have more often than not fostered tunnel-vision imperial cheerleaders and apologists for capital’s feeding frenzies.

One might go on, at great length, about how these wellsprings of student-loans, contractual peonage in the guise of friendly lending, induce political detriments.  This quick listing of origins and related costly detractions ought to serve as a decent starting point, however.

 

PART FOUR—SOCIAL RELATIONS

The social sources of the predilection to use student-loans as a primary educational financing technique also demonstrate that such program’s beggaring of equitable and amicable social relations has been no accident. First, essentially divisive mechanisms accompanied the system from the outset.

The Congressional debates from 1944, in relation to the so-called ‘G.I. Bill of Rights,’ make this clear, as non-veterans did not ‘make the cut,’ so to speak.  Similarly, gay soldiers had all access stripped (from historyinperspective.org) from them, in any case where a discharge occurred due to ‘homosexual tendencies.’  Situations at once similar and disparate came to pass in regard to women and ethnic minorities.  A paradoxical dialectic appears in such cases: one source of the advocacy of loans-for-democracy-and-freedom, and so forth, was often certain sorts of social inequities or issues; at the same time, the programs furthered and deepened these very problems.

Second, growing inequality, beginning in the 1970’s and worsening in later decades, served to increase boosterism for loans.  A legislative history of the system makes such an assessment clear.  At the same time, as aforementioned economic and political machinations took hold, the expansion of the level of indebtedness and the number of debtors absolutely guaranteed that the student-loan-project as such would cause further deviation from equitable distribution of income, wealth, and so on and so forth.

Third, emiseration among poor people—especially among communities of color, such as Native Americans, African Americans, and others—justified growing mechanisms for debt-financing of schooling.  This led to counterproductive results, however, in relation to the purported objectives of increasing affluence and social comfort.  For example, hideous employment prospects practically insured that schooling-debts would serve as millstones rather than life-preservers to young minority folks drowning in obligation and unable to find ‘professional’ work, i.e., jobs that did not “suck” to ‘service’ their mortgaged futures.  Moreover, negative feedback loops developed, disinclining youth of color from pursuing higher education in the debt-financed context, leading to a classic ‘no-exit’ dilemma from penury and squalor.

 

Fourth, bread and circuses—or alcohol and football games—have always lured youngsters to collegiate environs.  In this context, student loans became palatable in part because of the non-educational plusses of being at a major campus confluence of fun and action.  The cashola from the loans then served to ante-up or seed more focus on fraternities, sororities, and ‘Roll-Tide’ fantasies of one sort or another throughout the land.

As above, an interested investigator might continue to lengthen this list.  Again, though, perhaps the limited delineation here can serve as a basis for further discussion and amplification of what has been transpiring.

 

David Morris

PART FIVE—CONCLUSION

So we’ve come to this.  One dollar out of fifteen in the economy has an analog in a young person’s debt.  In such a pass, obviously, dischargeability in Bankruptcy would be excellent; arguing with Income-Contingent repayment would be madness; and additional pro-consumer and pro-student reforms would be dandy.

However, only a more thorough surgical intervention can cure the sickness of predation and pauperization that is the substrate of the entire contemporary schooling mechanism, indeed the foundation of present-day capitalism.  For our purposes then, implanting educational systems actually of, by, and for the people must be our project, even as we strive for reform that lets us breathe instead of strangling on defaulted loans.  Traditional consumer protections, in other words, do not go nearly far enough.  Universal jubilee, debtor-led community-service-performance bonds that replace—at decent wages—all debt, and other really radical efforts are necessary to accomplish.

Michael Fleshman – Cooper Union protests

In turn, such steps toward deep-rooted transformation require a social movement as the impetus for their occurrence.  And no such social uprising has ever happened spontaneously.   They have all begun from conversation, from mutual learning and teaching, the agreed purposes of which are both an accurate, comprehensive contemplation of what has happened and concerted action toward radical reformulation.

Thus, This Humble Correspondent calls for an equally humble union of writers—many of whose present and future adherents find themselves fitted with an apparently unbreakable harness of indentured fealty—to reach out to students’ rights groups, to parents, to teachers, to activists, to citizens for whom an eternal debt-servitude does not seem like a valid or viable future, so as to begin to meet and ponder these matters, with an eye to truly transformative action.

Picture 16

Specifically, something akin to a widespread series of meetings need to take place, for which a recent gathering in Oregon might serve as one excellent model.  This Humble Correspondent and his brilliant spouse have composed an outreach flyer that could, conceivably, serve to help in bringing people together.  The day after tomorrow may be too late.  The time has come to take a stand.

A Gathering of Sources & Data & Assessments, Oh My!

Another Bibliographic Promenade

In this realm of ours, where paradox retains its remorseless grip, so that one can barely discern whether one is coming or going half the time, we find ourselves simultaneously awash in oceans of information and galaxies of data at exactly the same time that pinning down the important facts can be about as easy as finding a green contact lens in freshly mown grass.  What follows seeks to present as many resources as possible that contain the really relevant pieces of this financing puzzle, along with useful ancillary data, without overwhelming readers with what they confront.

At the same time, as with any conflictual aspect of existence, coming to terms with that which is critical, while not leaving out varying perspectives and analyses, is often easier said than done.  That said, for the most part, corporations and Republicans own most of life’s playing fields and openly disparage and oppose the existence of such organizations as the National Writers Union: therefore, eliminating—at least for the most part—their points-of-view from these lists is conscious.  Nonetheless, This Humble Correspondent would certainly thank any and all readers who suggested additions to the categories below from the inevitable plethora of overlooked material that any such effort as this misses.

What follows appears in sets.  These organizational categories, while unavoidably arbitrary, will hopefully allow onlookers more easily navigate the rich veins of data that show up here.  The general rubric that This Humble Correspondent follows is to include historical, political economic, and social analyses and data, followed by groups that deal with specific issues or problems apparent in the evolution of the issue in the real world.  In any event, here we go.

TIMELINES

Neither the future nor the present can cause the past.  A first step in orienting ourselves, therefore, has to be a general awareness of the order in which things have taken place.  Here are some gateways to timelines on the web, followed by very rudimentary benchmarks for readers to note in any circumstance that involves a conversation concerning student loans.

 VARIOUS HISTORICAL ASSESSMENTS

Plenty of scholarly and public analysis is in the marketplace that nods in the direction of history.  Recently, however, an upsurge of critical examination has happened.  A teeny bit of this shows up here.

ADVOCACY ORGANIZATIONS THAT FOCUS ON STUDENT LOANS

While undoubtedly many additional groups have formed over the years, and many additional general youth or education or social struggle organizations also support student-loan reform, this set of advocates are all ‘fighting the good fight’ on a daily basis.

EXPLORATIONS IN THE POLITICAL ECONOMY OF HIGHER EDUCATION FINANCE

All too often, those to whom the present occurs like a load of bricks falling from the sky fail to consider issues such as this.  Here’s some help, in that regard.  At some point, of course, we should all be talking about what we mean by, and what we know about, the parameters of political economy, without which the discipline of economics is arguably fatuous fantasy.

STUDENT LOANS & SOCIAL RELATIONS

Here, where the terrain is especially complicated and difficult to tease out without immersing ourselves, links might deal with multiple subtopics.  This matter—concerning all manner of culture, class, color, and conflict pointers, would be well worth a colloquium and more, however.

  • http://www.webofdebt.com/articles/indentured.php  A depth-analysis of how student loans and social security cutbacks, attacks on the young and the old, go hand in hand, this article comes from one of the people’s experts in the arenas of banking and finance.

  • http://www.woundedwarriorproject.org/media/502281/hvac-education-6-20-13.pdf  Congressional testimony from the Wounded Warrior Project that impugns the for-profit education sector and its practices of ‘recruiting’ damaged, poor, or otherwise needful veterans who receive inadequate support after they go deeply in debt to attend school.

  • http://www.harkin.senate.gov/documents/pdf/4f9ac62292704.pdf  Senator Tom Harkin’s staff’s graphic presentation of the lopsided results and expenditures on for-profit higher education—the profit-sector graduating less and costing more—and the impact that this has on veterans, especially those who are poor or from different ethnic backgrounds.

  • http://www.gwlr.org/wp-content/uploads/2013/01/Riegel_81_1.pdf  This George Washington Law Review article proves that, despite the already very ‘friendly-to-profit’ 90/10 rule that only requires for-profit colleges and universities to obtain ten per cent of their income from non-Federal—i.e., loan—sources, in the aftermath of 9/11, loopholes permit skirting even that generous standard, with troubling results for working class and ethnic students least able to afford a giant loan burden.

  • http://www.protectstudentsandtaxpayers.org/wp-content/uploads/2013/09/Young_Invincibles.Dept_of_Ed_Rulemaking_Testimony.pdf  Congressional testimony from Young Invincibles to the effect that policies have driven ‘less credit-worthy’ students to for-profit enrollment, much to the detriment of their educational and fiscal futures.

  • http://www.help.senate.gov/imo/media/for_profit_report/ExecutiveSummary.pdf  This executive summary of a two year Senate investigation puts the matter in mild terms that are nonetheless stark: “(F)or-profit colleges also ask students with modest financial resources to take a big risk by enrolling in high-tuition schools. As a result of high tuition, students must take on significant student loan debt to attend school. When students withdraw, as hundreds of thousands do each year, they are left with high monthly payments but without a commensurate increase in earning power from new training and skills.”

  • http://www.harkin.senate.gov/documents/pdf/4caf6639e24c3.pdf  Tom Harkin’s Senate narrative overview, concluding that “debt without diplomas” is the lot of poor and minority students.

  • http://chronicle.com/items/biz/pdf/acsfa_rpi.pdf  Department of Education’s Advisory Committee on Student Financial Assistance prepared this chilling report, which projects dire social consequences from continuing programs that saddle poor and minority populations with debt while offering little tangible in the way of educational and career benefits.

 GENERAL ANALYSES OF THE FAILINGS OF STANDARD OPERATING PROCEDURE

Even the most hallowed experts are often enough decrying the SOP and bemoaning ‘unintended consequences’ that quite logically are part of the purpose of the system.  In any event, a few such authoritative critiques emerge below.

 GOVERNMENT & N.G.O. REPORTS THAT EXPLICATE THE SYSTEM

Full of descriptive and empirical data, such materials as these represent stepping stones to being able to show the path of the development of this issue.  A tremendously helpful adjunct would be a comprehensive legislative history of all of the bills, since 1944, that have dealt with these things.  Hundreds, or even thousands, more titles and entries than show up here would be possible to list—whether such an exhaustive effort would be practical is anybody’s guess, but at some point, someone ought to pay attention and see what all is in the arena, so to speak.

 RADICAL REFORMERS, FREE-FOR-ALL HIGHER ED ADVOCATES, & OTHER ALLIES

Plenty of help is available to our union to assist in fomenting positive change, to foster creative and empowering alliances, to develop strategic programming and action.  But we will probably never reach most of these potential ‘fellow travelers’ unless we’re willing to climb out of the ‘we’re-just-writers-interested-in-writerly-things’ corner that we’re presently occupying.

 POPULAR EDUCATION, MARXISM, SOCIAL DEMOCRACY

A variety of ideological methods contain useful ways of thinking as we writers struggle to make sense of things and find ways to participate in and facilitate a transformation of this morass of pain that is the way things happen now among a huge cohort of future NWU adherents.

 INTERNATIONAL ORGANIZATIONS & RESPONSES

Chile, England, and dozens of other nations, and international groups, have also been examining the issues in play here, a sampling of which collectives appears here.

 PHILOSOPHY, DEEP-ANALYSIS, & EXPERTS WHO ARE HONEST BROKERS

Useful materials are present that grapple with our problems in innovative and unanticipated ways.  We just have to do some downloading, find ways to lay our hands on e-readers that make engagement palatable, and start reading

  • http://www.webofdebt.com/  Ellen Brown’s decades of work in populist economics makes her a ‘voice from the wilderness’ who advocates fundamental reforms that reduce citizen indebtedness and increase the notion of a democracy of, by, and for the people.

  • http://www.forgivestudentloandebt.com/  Robert Applebaum, another vox populi, has a simple proposal: instead of bailing out thugs and racketeers, perhaps we should consider forgiving student debt.

 

Having arrived once more at a resting point, This Humble Correspondent must as usual apologize.  So much shows up above.  How can one possibly digest it all?

The short answer is that one cannot.  Still, we must try.  The times and our human nature demand it.  Of course, at the end of a long night, or a long shift, to hell with all that seems all too often an apt response.  Nevertheless, This Humble Correspondent begs to differ.

What would I like readers to do?  Ideally, they’d find the reasoning, data, and linkages that show up here useful.  More importantly, they’d jump in and proffer correction, disagreement, amplification, or any “special knowledge” that they have about this topic area.  Anyone who e-mails me useful, pertinent links and ideas will generally see their input appear in edits of these main threads.  Most importantly, though, visitors here would also willingly help to facilitate and participate in ongoing dialog that leads to powerful grassroots action about these matters.

Instead of complaining and waiting vainly for others to rescue the world from extremely troubled times, we have to take part in learning and struggle among ourselves to figure out as clearly as possible what has happened to cause the present pass.  Then, should survival and a decent existence and the prospect of grandchildren-or-something-similar appeal to us, we have no choice but to put what we’ve learned into action, somehow or other insisting that we, the people, are in fact the ones who are in charge.

 

 

 

 

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