More Strands of a Tangled Web: Student Loan Debt

This is a nasty one…

Fact is, not every student qualifies for a scholarship at university. That is fine, and a country needs a well-trained work force in order to compete in the market, especially in this time where knowledge comes at a premium.

The interesting deal that corporate America seems to have made with the banks and educational systems is this:

·         Educational systems charge top dollar for an education that will bring ‘the great paying job’

·         Banks lend the money to the student to pay top dollar… and charge a hefty interest from the first day after graduation. This is where the pressure cooker is slammed shut and the heat is on.

·         Corporate America hires well-trained employees at bottom dollar. This is where the descent into slavery starts.

The gamble by the student was that taking out a loan of tens of thousands of dollars would lead to a situation where the student could easily repay the loan. How different does this play out in reality…

Leaving aside the personal misery this puts people in, it also hits government finances:

·         Health: people walk around uninsured (let’s leave health insurance for a future episode). Once they get sick, what are you going to do? Let them die (well, this option is sometimes taken; yet another episode)? Or treat them, at the public expense?

·         Society: how do people deal with a society where their friends from one day to the other are say, 60,000 Dollars in debt, with a Master’s degree in engineering, and forced to work as a cash teller at the bank that holds their debt? Now, for a time, fear of going bankrupt will keep people quiet (has done so far the past decades) but that bubble (like any bubble) will burst.

·         Crime: under the strain of heavy debt people are more likely to join the dark side, if only because it pays better than McD’s. this then again increases the cost of police (which I believe were recently voted out of a job), increases society’s sense of insecurity (but then, we have all these heavily armed contractors from Iraq that will at some point be looking for a job)… Sorry, I do tend to have an overactive imagination.

·         Drugs: Nancy Reagan used to ‘just say no’ but her situation was a bit different. If there is one thing that we have learned over the past decades (internationally): if you want people to turn to drugs, make them poor, make them feel helpless, grind them down and use them.

I just named three perspectives only of what this system has done to people. What is great is that people have not turned to drugs, or crime, and are still healthy enough to march.

But the government must take action, and this delivery street of wage slaves should be closed down.