Well, finally! Hard-right congressional leaders and the Obama White House have agreed that interest rates on student loans should not double to nearly 7 percent, as they let happen early in July. Instead, college students will be billed at a rate that will steadily rise higher than 8 percent.
This is progress?
Temporarily, yes, because the new law drops this year's rate to 3.8 percent. But, for the longer run, obviously not. Even capping the interest rate at 8.25 percent, as the White House demanded, is too high, for it still saddles students with a crushing debt of some $20,000 to $40,000 for a four-year degree, just as they're getting started on their economic path.
But worse, lawmakers are playing small ball again, avoiding the big issue they should be addressing. Bickering over interest-rate percentages shrivels the public debate to its most picayune and meanest point, which our so-called leaders seem to specialize in these days. They focus on the price of everything, without grasping the value of anything. And the value of a college education — not only to America's youth, but most significantly to our whole society's economic and democratic future — is clearly established.
So the big question to be asking is this: Why isn't higher education free? Les Leopold, director of the Labor Institute, notes in a July 2 Alternet piece, "For over 150 years, our nation has recognized that tuition-free primary and secondary schools were absolutely vital to the growth and functioning of our commonwealth."
Providing free education, from kindergarten through high school, paid off big for us. Today, though, that's not enough, for open access to a college degree or other advanced training is as vital to America as a high school diploma has been in our past.
Forget interest rates, young people should not be blocked by a massive debt-load from getting the education that they need to succeed — but also that all of America needs them to have for our mutual prosperity and democratic strength.
Of course, an upfront investment in a smarter, more productive, more democratic civilization is pricey. So where do we get the money to do what America needs? Get it from where it went: Wall Street.
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Let me frame the question in terms of a real-life choice: Is making higher education available to every American more important to our national interest than letting Wall Street profiteers make a few more billions of dollars each year?
Answer: Of course.
Yet, our political leaders — pushed by Wall Street lobbyists — have been making the opposite choice for years. As a result, banksters have loaded students down with a mountain of high-interest loans, rising from just over $2 billion in total debt a decade ago to nearly a trillion last year.
Worse, this has made the financiers — either banks or government lenders — the de facto gatekeepers of advanced education and training, shutting out thousands of young people each year who want to get ahead, but are not able to hurdle the price barrier.
This is enormously costly to America. And it's completely unnecessary. The smart choice would be to make college and professional training free — as we learned from the GI Bill after World War II. Under this 1944 law, about 7.8 million veterans were trained, including some 2.2 million who went to college; 3.5 million who went to trade, technical or other schools; 1.4 million who got on-the-job training; and 700,000 who got farm training. The total cost of the program was $14.5 billion — $1,860 per vet. A 1988 congressional study found that every public dollar invested in the GI Bill produced a $7 increase in our nation's economic output.
Likewise, a similar investment today in universal access — i.e., free access — to higher learning and training would not only more than pay for itself, but it would also produce a widely shared prosperity and deliver the priceless return of a broadly educated citizenry.
Of course, an upfront investment in a smarter, more productive, more democratic civilization is pricey. So where do we get the money to do what America needs? Get it from where it went.
Wall Street's super-rich speculators are now making millions of super-fast, robotic financial transactions per second, generating trillions of dollars a year for them — but producing nothing of real value for us, while distorting and endangering markets. Put a tiny tax on each of those transactions, affecting only the automated gambles made by speculators, and more than enough money will come into the public coffers to free up higher-ed for all.