Look at the history you just read. We've always had capitalism, but we didn't
always have student loans.
Miriam
-----Original Message-----
From: blind-democracy-bounce@xxxxxxxxxxxxx
<blind-democracy-bounce@xxxxxxxxxxxxx> On Behalf Of Carl Jarvis
Sent: Thursday, September 17, 2020 2:06 PM
To: blind-democracy@xxxxxxxxxxxxx
Subject: [blind-democracy] Re: FW: How Were 46 Million People Trapped by
Student Debt? The History of an Unfulfilled Promise
Student loans is a clear example of Capitalism's short comings.
Rather than seeing our youth as our future, which we need to encourage and
challenge, instead we see our nation's youth as a Cash Cow. If our leadership
truly cared for our nation and for our future, then they would fight for a
system that provided the young the maximum in educational opportunities.
Carl Jarvis
On 9/17/20, Miriam Vieni <miriamvieni@xxxxxxxxxxxxx> wrote:
From: Economy for All <info@ind.media>
Sent: Thursday, September 17, 2020 1:10 PM
To: miriamvieni@xxxxxxxxxxxxx
Subject: How Were 46 Million People Trapped by Student Debt? The
History of an Unfulfilled Promise
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How Were 46 Million People Trapped by Student Debt? The History of an
Unfulfilled Promise
It is long past time to recognize that the cruel experiment in
financing higher education through student loans has failed.
By Mary Green Swig, Steven L. Swig, David A. Bergeron, and Richard J.
Eskow
The democratic principle of tuition-free education in our country
pre-dates the founding of the United States. The first public primary
education was offered in the Massachusetts Bay Colony in 1635, and its
legislature created Harvard College the following year to make
education available to all qualified students. Even before the
Constitution was ratified, the Confederation Congress enacted the Land
Ordinance of 1785
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13?h=R1BB7ItvMyMcgnSdFXJtWNN0_RR67YiB8q987FRsrAg>
, which required newly established townships in territories ceded by
the British to devote a section of land for a public school. It also
passed the Northwest Ordinances
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h=R1BB7ItvMyMcgnSdFXJtWNN0_RR67YiB8q987FRsrAg>
, which set out the guidelines for how the territories could become states.
Among those guidelines was a requirement to establish public
universities and a stipulation that “the means of education shall forever be
encouraged.”
After the nation declared independence, Thomas Jefferson argued for a
formal education system funded through government taxation.
Jefferson’s vision took form over the course of more than a century,
as state and local governments began creating primary schools and then
high schools. The federal government became involved in higher
education in the 19th century with the creation of land grant colleges
and other institutions, used primarily to teach agriculture and
education after the Civil War. These institutions created
opportunities for people who had long been locked out of the learning
process, including formerly enslaved African Americans and impoverished
people of all races.
State universities and colleges rapidly expanded as well. By the
middle of the 20th century, low-cost or tuition-free education was
available in many American states. After the Second World War, the
federal government once again turned to education to promote
opportunities for its citizens and economic growth for all. The G.I.
Bill paid educational expenses for 8 million people, without regard to
individual wealth, which helped create a robust middle class and
contributed to the vibrant growth economy of the 1950s and 1960s.
While those opportunities were still denied to many people as the
result of racism, efforts were underway to improve educational access for
people of color.
The Reagan era ushered in a belief that government programs, including
education, stood in the way of people’s dreams and should be severely
cut back. Public goods came to be seen as investments, ones that were
purely economic in nature. For these reasons, among others, a nation
that had expanded publicly funded education for centuries decided to reverse
course.
Instead of funding higher education on the principle that it benefits
us all, the country began shifting the cost to individual students.
In the 1950s, as part of the National Defense Education Act, student
loans were created
<https://go.ind.media/e/546932/-selected-outcomes-d-3306-ashx/gqc6bq/6
90838413?h=R1BB7ItvMyMcgnSdFXJtWNN0_RR67YiB8q987FRsrAg>
as an experiment in social engineering. Concerned about competition
with the Soviet Union, policymakers wanted to increase students’
capabilities in math and sciences. To do that, the country needed more
teachers. So, lawmakers offered loans to college students, with the
opportunity to have half the loan canceled after 10 years if they became
teachers.
The experiment failed. Researchers have not been able to prove
<https://go.ind.media/e/546932/-selected-outcomes-d-3306-ashx/gqc6bq/6
90838413?h=R1BB7ItvMyMcgnSdFXJtWNN0_RR67YiB8q987FRsrAg>
that the student loan program led more people to become teachers,
despite multiple attempts to do so. The experiment was also cruel.
Over the years, the student loan program was expanded, with the claim
that a student’s personal investment in their education was an
“investment” that would pay off in higher wages. Banks and other
private lenders were brought into the process and given considerable
incentives and subsidies to issue student loans, without considering
the burden being imposed on the student. This financial opportunity
was given to banking interests that were already wealthy, with little
thought of the resulting damage to an economically sustainable future.
Proponents of financializing the cost of higher education argued that
it was cheaper to lend money to students than it was for federal and
state governments to provide grants for their education, even after
paying subsidies to the private sector for their loans. An entire
industry grew up around this process. State and nonprofit guaranty
agencies were created to insure the loans. These agencies got paid, no
matter what: when loans were issued, when loans became delinquent,
when borrowers defaulted, and when they collected on defaulted loans.
In response, most states created guaranty agencies so they could make
money from people who needed to borrow to pay for ever-increasing
tuitions and fees. Now, states had an extra incentive to cut funding
for public higher education. Not only would they save on expenditures,
but they could increase the need for students to borrow, which
increased their revenue. In many cases, these guaranty agencies don’t
handle the loans themselves. They pass the work on to private debt
collectors who take collection fees and are aggressive in their handling of
cases.
The system took on a life of its own. By the mid-1990s, student loans
had surpassed grants in funding students’ higher education. But a
system built on debt financing only works if borrowers pay back their
loans. That led Congress to make the system even crueler with the
Bankruptcy Amendments and Federal Judgeship Act of 1984, which
exempted student loans from bankruptcy proceedings and subjected
borrowers to draconian collection tools. These tools included wage
garnishment without a court order and the seizure of Social Security
checks and tax refunds. The Clinton and Obama administrations
attempted to lessen the burden slightly by allowing the federal
government to lend directly to students while introducing income-based
repayment options, but the system’s fundamental cruelty remains unchanged
today.
It is time to recognize that the cruel experiment in financing higher
education through student loans has failed. It has captured 46 million
people and their families in a student loan trap, including people who
received vocational training, and has weakened the financial strength
of higher education. Inescapable debt is a major driver of social
collapse
<https://go.ind.media/e/546932/escapable-regardless-size-loan/gqc6bs/6
90838413?h=R1BB7ItvMyMcgnSdFXJtWNN0_RR67YiB8q987FRsrAg>
. It has made the racial wealth gap worse and weakened the entire
economy, as debt holders are prevented from buying homes or consumer
goods, starting families, or opening new businesses. It’s time to
restore funds for higher education and cancel student debt for the
victims of this failed experiment.
Learn more at Freedom to Prosper
<https://go.ind.media/e/546932/2020-09-17/gqc6bv/690838413?h=R1BB7ItvM
yMcgnSdFXJtWNN0_RR67YiB8q987FRsrAg>
.
Mary Green Swig is a senior fellow at the Advanced Leadership
Initiative at Harvard University and co-founder of Freedom to Prosper
<https://go.ind.media/e/546932/2020-09-17/gqc6bv/690838413?h=R1BB7ItvM
yMcgnSdFXJtWNN0_RR67YiB8q987FRsrAg>
.
Steven L. Swig is a senior fellow at the Advanced Leadership
Initiative at Harvard University and co-founder of Freedom to Prosper
<https://go.ind.media/e/546932/2020-09-17/gqc6bv/690838413?h=R1BB7ItvM
yMcgnSdFXJtWNN0_RR67YiB8q987FRsrAg>
.
David A. Bergeron is a senior fellow for postsecondary education at
the Center for American Progress
<https://go.ind.media/e/546932/person-bergeron-david-/gqc6bx/690838413
?h=R1BB7ItvMyMcgnSdFXJtWNN0_RR67YiB8q987FRsrAg>
. Bergeron previously served as the acting assistant secretary for
postsecondary education at the U.S. Department of Education.
Richard J. Eskow is senior adviser for health and economic justice at
Social Security Works
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. He is also the host of The Zero Hour
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