My meaning is, that no man can expect his children to respect what he degrades.
-- Charles Dickens, Martin Chuzzlewit
The most important thing to remember about this student loan crisis is that we weren't always in it. In 2006, when George W. Bush was still futzing his way out of the White House, that president made a decision to lock in Stafford student loan interest at the crazy, high rate of 6.8 percent. Prior to that enlightened man's choice, student loan interest rates were connected to market rates and fluctuated every year -- which would have been especially helpful during this little recession we've been having, when at times that rate would have seen students paying back loans with interest as low as 1.79 percent.
Last July, President Obama seemingly "fixed" the student loan issue by signing a law bringing undergraduate student loan interest down to 3.86 percent (5.41 percent for graduate students). But that quick fix was just that -- quick. And without much consideration for the past or future. While the fix helps students who took out loans after July 1, 2013, future generations are now set on the interest highway to hell. Under the deal the president just cut, by 2015, student loan interest rates will go back to fluctuating with market rates.
One big problem with Obama's fix is the government expects that old recession to hightail it out of America over the next several years. So now, every year that the economy does well, market interest rates rise, causing Treasury notes to rise. And, in turn -- fun for the whole family -- so will student loan rates.
This temporary solution also happens to do absolutely nothing for all those who've been screwed over since Dubya's brilliant interest plan got its grip firmly around our throats on July 1, 2006.
Millennials -- like some goofily named Dickens character -- search for love and money. And, as Pip in Great Expectations can attest, one is easier got with the other. Don't get me wrong, you can certainly be poor and in love (I practice this state myself bi-annually) but that's not the fun of living in America. Like John Travolta selling Scientology, this country preaches opportunity with a conviction and contradiction that stuns. You must go to college or you can't get a job. You can't get a job after college but you must repay your debt. A child of four could tell you this is mass madness of the highest order. America has started a collective game of education Russian roulette, with the government merrily collecting our shells while simultaneously tossing us more bullets.
According to the New York Times:
Until 2009, young adults with student loan debt were more likely to own homes and were more likely to have car loans outstanding than were people of the same age without student loans. Those loans had enabled many of them to obtain college degrees and earn more money, qualifying them for mortgages. Those with student loans generally had better credit scores than those who did not.
Right. Until 2009. Like, after the B.S. of 2006. But surely -- the Scroogier among us will sneer -- plenty of opportunities must exist for driven Millennials. "Are there no workhouses?" Yes, actually, there are plenty. Low wage jobs accounted for nearly 40 percent of American jobs created between 2009 and 2013. In 2012 alone, the government estimates that close to four million hourly workers had wages at or below the federal minimum of $7.25 per hour. Unemployment plagues those not lucky enough to score even a shit-paying job, with the long-term unemployment rate creeping up to 35 percent of all those lacking in the job department.
The president's major flub here is not in what he did, but what he didn't do. That lower interest rate should be extended to every single person in this country who's taken out a student loan since the dark day Dubya signed his ridiculous proposition into law. Seven years is too long a sentence for so many bright and promising people wasting away their talents in debtors' prison.
What's missing here is anger, followed by action. In our complacency we've forgotten the power of the collective. A whole chunk of Millennials have become crippled by a stupid law. George Bush has left a national hole to rival the crater created by his international war. That law has shaped our economy and our lives, and it needs to retroactively eat it.
As Dickens said, "No one is useless in this world who lightens the burdens of another."
Take back your usefulness, America. You owe us that much and more.
And if the government won't help, let's start a nationwide bake sale. Or, at the very least, continue this much needed gripe fest at #debtorsprison.