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Matt Taibbi: Student Loan Bubble Saddles a Generation With Debt
On the heels of President Obama’s signing of a measure keeping federally subsidized student loans at a relatively low rate through 2015, Rolling Stone political reporter Matt Taibbi joins Democracy Now! to discuss how the high price of U.S. college tuition and the federal expansion of student debt to pay for it pose a major threat to the economy.
In his new article, "Ripping Off Young America: The College-Loan Scandal," Taibbi writes: "The dirty secret of American higher education is that student-loan interest rates are almost irrelevant. It’s not the cost of the loan that’s the problem, it’s the principal—the appallingly high tuition costs that have been soaring at two to three times the rate of inflation, an irrational upward trajectory eerily reminiscent of skyrocketing housing prices in the years before 2008. ... Throw off the mystery and what you’ll uncover is a shameful and oppressive outrage that for years now has been systematically perpetrated against a generation of young adults."
Taibbi says the federal government is poised to make $185 billion over the next 10 years on student loans, with no way out for the young borrowers: "Even gamblers can declare bankruptcy, but kids who enter into student loans will never, ever be able to get out of this debt."