Alan J. Yeck

Too many of us are just reading the headlines and not the content, the meat of the articles. On social media we are quick to respond, to post, to tweet based only on that headline and by doing so we perpetuate lies.

There was a recent article headline (I’ll paraphrase) ‘Biden Close to Cancelling Student Loan Debt.’ As I read the article, the headline was completely misleading. I do not know if it was the author’s choice to manipulate us or the editors, but it was nonetheless manipulation – a lie by omission of the facts. The article was about Senators Warren and Schumer introducing a bill to cancel up to $50,000 of student loan debt for each borrower – very different from the headline. The reality is that there is so much misinformation out there about student loan debt that even reading the article would have done little, if any to clarify the crisis. Please allow me a few more minutes, and sentences, to explain a bit more.

Damn Student Loan Debt Lie #1

The amount of student loan debt that is currently in mainstream media is around $1.7 trillion, both federal and private student loans. This number comes from the loan servicers/Department of Education telling us what is owed. This is a number that gets folks very worked up about ‘forgiving’ from their tax dollars. 

The Truth 

Millions of Americans have paid off their student loans, and then some, but cannot get out from under the ongoing interest scam. For example, Corella had a $35,000 student loan for a graduate degree in education (she’s a 7th grade teacher). To date she’s paid $38,000 back but the loan servicer is telling her she still owes $87,000. This is not an uncommon story at all. Pull those numbers from the Department of Education and we’ll see that millions have paid back their loans but not counted as such because of the predatory interest.

Damn Student Loan Debt Lie #2

“It’s those kids, privileged kids, that think they don’t have to pay back their debts. I pay my debt and so should these punks. Get the hell off my lawn!”

The Truth

Of the 45 million Americans with student loan debt, only 37.5% are below the age of 30. The other 62.5% are older than 30. Minorities and women are disproportionately affected by student debt. Predatory lending, longer times to complete, and longer times to pay back increase the interest, which is then often capitalized on the original balance, which interest is then reapplied to. 

Damn Student Loan Debt Lie #3

It’s their own fault for going to these expensive, private schools. 

The Truth

Four-year public institutions enroll a higher percentage of students (44.8%), followed by two-year public institutions (33.2%), and four-year private non-profit institutions (19.5%). The cost of a four-year degree has increased 400% above inflation in just one generation. While the schools are quick to point the finger at decreased state and federal funding, they themselves are very much to blame. Fiscal mismanagement, increased competition from for-profits, bloated mid-level administrative lines, and the lack of leadership at the executive and board levels are just as much, if not more so to blame for the unjustified increases in tuition and fees. 

Higher education is a black hole that will absorb every penny it’s given and still want more. They must be held accountable for their costs, their degrees offered, their completion rates, and time of completions. Six years is the acceptable number today to complete a four-year degree, but even with that insane statement (“six years is the acceptable number today to complete for a four-year degree” – WTF?), the completion rates within that time frame are less than 50%.  Why? Because of arrogance, tradition, traditional arrogance, inability to change, and lack of any real (teeth) federal oversight. The feds must address this or the costs will continue to go up. 

Damn Student Loan Debt Lie #4

There are several options for repayment that are based on a borrower’s income. There’s no reason they should ever go in default. 

The Truth

The repayment plans are between 10-20% of discretionary income or income that they believe is ‘leftover’ after you pay your bills. Unfortunately, they don’t consider these bills in your life to determine a true discretionary number; rent or mortgage; utilities; auto loan payments; auto insurance; phone; internet; veterinarian bills; health insurance; dental; food; and emergency funds, or any kind of savings/retirement. What this means is that when your transmission goes and you must fix it to keep your job, you are forced into default on your student loan because you have not been allowed financially to plan for this. Then they start piling on the interest. The system is created to increase defaults. Take it all. Default. Take more, longer. Repeat until you die (at least that’s something to look forward to in this corrupt system).

We have lost what the purpose of education is supposed to be. Education is the single greatest factor that will determine our future as a nation (or the single greatest factor in destroying our nation). Education isn’t just degree programs but also the trades and apprenticeships – all equally critical, and all should be equally supported. Instead, the politicians have turned education into a commodity, like pork bellies, to be traded and make a great deal of money off of, for a very small group of people. 

Sustainable Solutions

  • Remove interest and recalculate from the original balance borrowed, less what has been paid back by the borrower. That’s the real number. The government should not make money off of helping its people/building the future of the country. 
  • Restore, unconditional bankruptcy rights to student loan borrowers. This was the foundation that this crisis was built on. Criminalizing student loans has made a great deal of money for a small group of people. 
  • Hold higher education financially accountable for the costs of their degrees, job placements, graduation rates, graduation time frames, and do not lend to students going to institutions that do not comply. 
  • Recalculate and reform payment plans including stopping all wage, social security, and tax return garnishments.
  • Disassemble the loan servicing companies that have lied, cheated, and stolen the lives of so many Americans through their fraudulent operations.   

Canceling $10k or $50k without any other changes to the student loan industry, predatory lending, bankruptcy, and the overly inflated cost of education only ensures the crisis continues and the money continues flowing back to D.C. It’s still fraud, it’s still corruption. We have lived with this dirty game so long that now we fool ourselves into thinking $50k is good?

Just because the government is giving us a box of chocolates (Russell Stover to boot) when they screw us doesn’t make it all okay now. It’s nothing more than rearranging the deck chairs on the Titanic. I’m happy for you if it addresses your problem but ultimately, the country is still fucked. 

We have the power to change American politics back to a system that serves the people, not the politicians. Contact your representatives and ask them to listen to these facts and national narratives.