Skip to content

Student Loans

US Government Could End Student Debt Crisis Today

At a basic level, the U.S. federal government doesn’t need to scrimp and save to fully fund higher education. It can just spend money rather than lend it, without incurring any significant negative economic consequences. Although I’d love to reduce spending on, say, prisons, the federal government doesn’t even need to take money out of other programs in order to alleviate student debt. You may find this argument hard to believe. The way most politicians and journalists talk about the national debt and deficit spending makes free higher education sound impossible. But there’s another way of looking at the problem, a vision advocated by a growing movement of economists, lawyers, students, and financial practitioners who deal with the institutional nuts and bolts of the economy on a day-to-day basis.

Student Loans Are A Bridge To Nowhere

As you know, that debt burden of student loans has nearly quadrupled in the past 10 years. Today it stands at $1.18 trillion. The average liability per student—whether they earn a degree or not—is nearly $30,000. The poorest 25% of the student population—people with less than $8,000 in assets—own 60% of that debt. How does that debt shape—or should we say engineer?—the direction and quality of their lives, their ability to contribute as citizens and creators of culture? How does that debt narrow the choices available to them, making their young lives into a burden rather than an adventure? College and advanced degrees have always been promoted as the key to advancement, good jobs, and upward mobility. Today, college education is still promoted with those claims, but the key has been thrown away. The student graduates into a lock box of debt.

Unpacking The Myths Of Financial Aid

Why would the university award aid in this way? Couldn’t it just adjust the ratio of merit aid to need-based aid? Unfortunately, the “high tuition/high aid” model only “works” when it’s organized like this. That’s because, for many university administrators, financial aid is not so much a form of charity as it is an instrument for maximizing tuition revenue. If that seems hard to believe, consider a recent article published in Forbes magazine about a new trend in the field of higher education finances: “financial aid leveraging.”[6] While in the past university executives thought of financial aid strictly as an expense, as public universities search for new sources of revenue they have begun to see it as a way of boosting not only the university’s prestige but also its tuition revenue.

The American Bankers Association’s Quiet War On Students

In the present-day, the ABA is waging a quiet war on students by actively combating virtually any legislation that would ease their debt burden. With regards to being able to get rid of student loans in bankruptcy, the ABA stated in 2012 that, if allowed to go into effect, it "would tempt students to rack up big debt that they won't repay [and that] 'The bankruptcy system would be opened to abuse." This is rather ironic, accusing that students will engage in irresponsible lending and borrowing habits, when considering the banks themselves engaged in massive amounts of the exact same activity by giving mortgage loans to people they knew couldn't repay the amount.

Urgent End Of Year Fundraising Campaign

Online donations are back! Keep independent media alive. 

Due to the attacks on our fiscal sponsor, we were unable to raise funds online for nearly two years.  As the bills pile up, your help is needed now to cover the monthly costs of operating Popular Resistance.

Urgent End Of Year Fundraising Campaign

Online donations are back! 

Keep independent media alive. 

Due to the attacks on our fiscal sponsor, we were unable to raise funds online for nearly two years.  As the bills pile up, your help is needed now to cover the monthly costs of operating Popular Resistance.