The Problem and Solution of Student Loans

hat-tip story here…..

…more good reading here…


One thing that *REALLY* needs to be stressed in these discussions….this entire problem is mostly created by “for profit” schools.

Most of these are glorified “trade school” that someone figured out that by re-classifying themselves, and getting a couple laws passes, they could get in on that sweet, sweet, federal student loan money…which the for profit banks were more than happy to act as middle men for…loan approved, we’ll co-sign for you with the Feds…

So now we’ve kicked the private banks out of the process, but sadly still have the GOP to deal with before we can fix the situation. They are, of course, offering up a solution where interest rates can rise higher than the Dem solution (a fixed rate), which is estimated to cost those students a certain more amount of money (about $4,000,000,000 more).

I like the solution that Australia has come up with for this problem (student loans in general). What they do is offer the loans that are not tied to interest rates (fixed or otherwise), but instead tied to a person’s income. For example, when you start making $50,000/yr, you start paying back 4% of that to your loan balance. And it grades up to a high of (something like) 8% at about $75K. You pay that until the balance is done.

If you lose your new, first job and your income drops for a while, you aren’t crushed into poverty despite having a shiny new degree.

This is so much a better way to deal with the issue. It avoid the “staying in school just to stay in school” syndrome. It doesn’t punish “life circumstances” as much. It doesn’t punish “you know, this just isn’t for me” as much. And it still provides the opportunity for reward for a great many more people than would otherwise have it.

So there are better ways to deal with it. Unfortunately, as mentioned, we have the GOP. So we have to wait for them to introduce the idea. The Dems to agree to it. Obama to endorse it. The GOP to then turn against it until the last possible second, then *allow* the Dems to pass it despite their *very serious concerns* about the socialisms.

That’s how screwed up our politics are. We have a big problem, other people in the world have figured out a pretty smart solution to said problem, and we can’t go that route because GOP.


GOP Economist Gives Moral Reasoning Behind Concentration Of Wealth (Rich People are Inherently Superior)

Gregory Mankiw plays a small but important role in the political ecology: an accomplished Harvard professor who validates Republican economic policies. It’s almost impossible to find empirical support for debt-financed tax cuts, but when George W. Bush proposed them, Mankiw and his Harvard pedigree were there to reassure that they were “fiscally responsible” and would surely lead to higher growth. The failure of these reassurances to come true has not prompted Mankiw to reassess his thinking. That’s because the fundamental basis for his beliefs about such matters has nothing to do with economics. Mankiw believes rich people deserve to keep their money, regardless of economic consequences.

Now, many conservatives share this belief, but since it is unpopular, they instead argue that higher taxes on the rich hurt the non-rich. Mankiw, to his enormous credit, does not conceal his agenda. He lays his agenda on the table in the form of a paper, “Defending the One Percent,” explicating his beliefs. In so doing, Mankiw — perhaps admirably, or at least bravely — ventures completely outside his area of expertise, economics, into moral philosophy. The result is — well, there’s no other way to put it. It’s an embarrassing piece of ignorant tripe.

via GOP Economist Makes Terrible Defense of the 1% — Daily Intelligencer.

For those that aren’t aware of *why* the GOP thinks this way, here’s two more stories for you.

First up, how many people’s hatred of immigration reform is based exactly where’d you guess.

The very first video submitted was premised on the notion that immigration reform should be stopped because otherwise whites would become the minority in America.

Second up, just look at the graphs.

The results were striking: The researchers’ mathematical model suggests that of the seven states in the country with the highest percentage of people who are biased against black people, six are Southern states—Louisiana, Mississippi, Texas, Alabama, Georgia, and South Carolina—required to seek federal approval for election law changes under the VRA. Arizona and Alaska, the other two states required to get the feds’ permission before changing their election laws, ranked much lower in anti-black bias. But as Elmendorf and Spencer note, these states are presumably required to seek that permission because of other bias—anti-Latino in Arizona and anti-Native American in Alaska—which their study did not measure. (Besides the eight states mentioned above, the VRA requires some counties and municipalities in seven other states to seek federal permission to change election rules.)

Note: actual graphs start about page 39.

So, if you haven’t figure out yet why the GOP institution as an old, white, rich stereotype is destined for the trashbin of history (after some serious attempts at oppression to retain democratic power), now you know.

Not only do they represent this stereotype, they think it’s a good thing.