Friday, April 27, 2012

The Price of Knowledge

   Not only is Rep Fox's statement above mean spirited and offensive, it doesn't making any sense, unless... well, we'll get back to her shortly.
   Here is our President responding to Rep. Fox's statement: "She said she had 'very little tolerance for people who tell me they graduate with debt because there’s no reason for that.' I'm just quoting here," Obama said. "The students who rack up student loan debt are just 'sitting on their butts having opportunity dumped in your lap.’ I'm reading it here. I didn't make this up."
   He continued: "Now, can you imagine saying something like that? Those of you who've had to take out student loans, you didn't do it because you’re lazy. You didn’t do it lightly. You don't like debt. A lot of you, your parents are helping out, but it’s tough on them. They're straining. And so you do it because the cost of college keeps going up and you know there’s an investment in your future."
   The reason this subject is coming up at this particular time, considering the problem of student loan debt has been with us for decades (Speaking to my lovely ex-case manager, Erin, (pictured above, during a recent impromptu meeting with President Barack Obama at a local Pizza Hut) Wednesday, I learned that she is still burdened with student loan debt. Most young case managers who have come to work here at Skid Row Housing Trust, are burdened with student loan debt. The President said Wednesday that he and his wife had just paid off their student loan debt 8 years ago, so he hadn't paid up until he began running for the U.S. Senate. I, on the other hand, am not burdened with a huge amount of student debt due to the fact that I had the good sense not to go to college), is that the House of Representatives have caved in to public pressure ingeniously applied by President Obama to keep the interest rates of federal student loans from increasing from 3.4% to 6.8%, which is almost exactly double, June 1st. This would equal out to about $1000 more a year for students. 
   Loans are indeed a big problem for approximately 7 million students who start out in life with a massive debt load, typically having to pay approximately 8% of whatever income they do make, with the average time to pay it off being 10 years. These loans, unlike other debts, and other types of loans, cannot be discharged by bankruptcy, the federal government, who issues the lion share of these loans is pretty much guaranteed they will be paid back.     
   It's weird. Middle class families have seen their income stagnate for years and years (while executive pay has increased exponentially), while the cost of college education has risen more than 300%.
   High unemployment means it is harder for new graduates to pay off their debt, which now averages more than $25,000. In 2007, half of college graduates were able to find work immediately. In 2009, this figure had dropped to one fifth. Increasingly, graduates and drop-outs are facing years of struggle and indenture-ship after leaving college.
   Back to our unsympathetic Rep. from North Carolina, Ms. Foxx. One reason that she is intolerant of students who complain of their large debt loads is because she works for the Association of Private Sector Colleges/Universities, the Apollo Group (owner of the University of Phoenix), and Corinthian Colleges, in that, according to Andrew Leonard,  of, these schools and businesses are among the top 20 financial contributors to her in 2011-2012.
   Accordingly she introduced the misnamed "Protecting Academic Freedom in Higher Education Act." for profit education institutions, which cater to about 12% of all college students.
   "The for-profit educational sector is an industry almost entirely subsidized by the federal government. Around 70-80 percent of for-profit revenues are generated by federal student loans. At the same time, judging by sky-high dropout rates, the for-profit schools do a terrible job of educating students. The Obama administration’s efforts to define a credit hour and require state accreditation were motivated by a very understandable desire: to ensure that taxpayers are getting their money’s worth when federal cash pays for a student’s education. In contrast, Foxx’s legislation is designed to remove that taxpayer protection. So here’s a more accurate title for her bill: 'The Protecting the Freedom of For-Profit Schools to Suck off the Government Teat Without Any Accountability Whatsoever Act.'
    In 2008, for-profit schools registered a a graduation rate of 22 percent. (Public and private non-profits registered 55 percent and 65 percent respectively.)
    54 percent of the students who enrolled in 2008-2009 in 14 publicly traded for-profit schools had withdrawn without a degree by 2010.
    The biggest player in the for-profit sector, the University of Phoenix, graduated only 9 percent of its B.A. candidates within six years."
   So much for privatization, voucher schools, and the market economy.
   Cumulative nationwide student loan debt is now over $1 trillion dollars, which is more than the total debt held by credit card holders as of last December, $801 billion.
   This isn't just bad news for students, that amount of debt weighs down the entire economy. With students defaulting at ever-higher rates, interest rates and fees are always changing, adding constantly to the weight of the burden college graduates (and those who didn't graduate but still have to pay off the loans they took out in more hopeful times) carry.$1-trillion-debtors-rally-for-relief
   What has the President done about this dire situation since entering office? Funny you should ask.
   Despite the inference that he has done nothing, made by Karl Rove's recent ad which we briefly discussed in the previous post, "Is This Really News?" Obama has done quite a bit, not enough, but not nothing.
   What did he do? He cut out the middle man.
   He did that by signing into law the Health Education Reconciliation Act of 2010, the Federal Direct Loan Program which is the sole government-backed loan program in the United States.
   Well what the heck did that do?
   The federal government used to give money to banks who then loaned to students, without providing any service themselves except to charges for their services.
   The Direct Loan Program eliminated the banks, saving $68 billion in the process.
   Granted $68 billion is a relative drop in the old bucket compared with $1 trillion (1000 billion), but you know how the old saying goes, "A billion here, a billion there, pretty soon we're talking about some real money."
   Considering the high cost of a college education coupled with the high national unemployment rate, is it really worth getting said education.
   We hear stories all of the time about new college grads entering the job market and having to settle for jobs at McDonalds (not that I have anything against the fine people who work at McDonalds, who provide a wonderful service).
   So is it worth it?
   The U.S. Secretary of Education, Arne Duncan said so on the Rachel Maddow Show Wednesday night. He acknowledged the problems and difficulties with student loan debt, but insisted a college education is still the best answer to having a better life... at least monetarily.
   And he's probably right.
   As Dylan Rattigan pointed out Wednesday as well on the MSNBC program, NOW, with Alex Wagner, the price of learning is now the lowest in history, yet the cost of an education in the United States is probably the highest, the payment of which benefits for profit universities and other educational systems as we've discussed. I agree. I've learned a great deal about politics and how the political world works since 2004 when I became actively interested in politics (my critics might say I haven't learned squat) all on my own with the help of political radio programs initially, then cable T.V. news, and the Internet, and old fashioned books, for a negligible cost, all without the benefit of a college education. I feel that now I'm fairly conversant in regards to this subject, as well as some others, and I feel confident enough to declare I can debate anyone, anytime, about politics and the system of government in this nation, including those with B.A.s or Masters, or PhDS. And I'll hold my own because truth and beauty are always on my side.
   Yet I would not be able to get a job here at Skid Row Housing Trust as a case manager because I lack a college degree. That's what students are paying for, not the education, you can get that anywhere, but for that little piece of paper that basically states the person who owns it had the wherewithal to make it to class occasionally and pass enough tests to graduate.
   Maybe that system needs to change... that requirement.
   House Republicans now say they will vote to keep the lower interest rates later today, paying for it by raiding the health care law, (the Prevention and Public Health Fund specifically, which contains billions of dollars aimed at encouraging people to take better care of themselves, thereby saving money down the road), denying services to those who most need them.
   They just love to sabotage Obama's health care any chance they get.
   These people are unconscionable. Rep. Paul Ryan just got spanked by Catholic Bishops for his budget, which they found morally objectionable due to the fact that it basically screws the poor while giving more tax breaks to the rich. Republicans in Congress just don't get it, because they can't, being sociopaths and all.
   Sen. Reid's plan is to pay for it by closing a corporate tax loophole that allows certain businesses to avoid payroll taxes by gaming the tax system. Closing the “John Edwards loophole,” named after the former senator who used it while practicing law, would raise enough revenue to offset the $6 billion cost of extending the current interest rate.
   We'll see what happens.
   As for my own opinion, which Social Democrat Thomm Hartmann and I agree, I think that since educating our young people will benefit the country as a whole in the long run, we as a nation should do everything we can to educate as many people who want to get educated, for as much as they can stand... for free.
   Oh, my God! But that's socialist! (and "snobish" according to former presidential candidate, Rick Santorum) That's not the way capitalism works! Should everyone get everything for free, or rather, paid for by American tax payers?! Are we going to be like those European countries, those commie bastards.
   Why yes.
   And "Sticks and stones can break my bones, but names will never hurt me."
   Neither will labels. Not if the substance behind those labels work!
   Educating our young people, like any other part of the country's commons, it's infrastructure, should be nurtured and developed, because at the end of the day it benefits everyone.
   Even sociopathic republicans.

Addendum: The House of Representatives have just passed the Student Loan bill (approximately 12:30PM PST) which keeps interest rates at 3.4% interest. However, the White House has threatened to veto this version due to the republican's insistence it be funded by buts in the president's healthcare act. Fortunately we still have over a month to come to some consensus and get this bill passed.

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