hobbsyoyo
Deity
- Joined
- Jul 13, 2012
- Messages
- 26,575
There is currently $1.5 trillion in student loan debt on the books in the US, most of which is held by younger borrows. Since 2009, the amount of mortgage debt in the US grew at rate of 3.2% while student loan debt grew by 102%. It is true that mortgage debt is a far larger chunk of the pie than student loan debt (see below), however, student borrowers still have to pay housing costs on top of self-financing their educations.
In 2004, the amount of mortgage originations by the 18-29 year old demographic was nearly twice as high as it is today (around $80 billion versus about $40), showing the negative correlation between the growth of college education costs and the ability of young people to afford homes. Not only does this represent young people having less housing options, it also means young people have less opportunities to invest and build wealth.
One of the key features of the decade leading up to the Great Recession was increasingly high levels of graft and malfeasance on the behalf of loaning institutions. Fraudulent, un-affordable or otherwise unsuitable loans fed an investor bubble which skewed housing prices and created a web of debt that hurt the global economy when it went bad. Similar patterns are repeating in the student loan market and the government's own watchdog has criticized the US Department of Education (DoE) for how badly it is mishandling student loan servicers.
These servicers regularly flaunt the rules established by the DoE and are rarely held accountable. Instead of protecting consumers, there has been a concerted effort by DoE secretary Betsy Devos and the Trump administration to roll back protections for borrowers and enhance the ability of servicers to drive up costs to both consumers and the federal government. Servicers have engaged in patterns of deceptive behavior to make it harder for students to pay back their loans and thereby increase profit margins through higher interest fees and penalties.
The DoE has to audit phone conversations between servicers and borrowers and found that in 61% of the calls they listened in on, there was evidence of failure on the part of the servicers - they gave wrong or misleading information. This problem did not start with Trump either - Obama failed to check abusive servicers as badly as Trump has. A key difference between the administrations, however, is that Trump's DoE is actively fighting the auditing agencies in court.
There are currently lawsuits against student loan servicers such as Navient and Betsy DeVos's DoE is backing servicers over borrowers by arguing nothing to see here, move along. Of course, the inspector general of the DoE itself is trying to tell Betsy DeVos that there is in fact, something to see here but there is no evidence she is listening. Things are so bad that even teacher's unions are taking Navient to court over their deceptive and abusive practices that cheat borrowers out of loan forgiveness. Out of 29,000 potentially illegible applicants, only 96 have been approved for forgiveness under a program that began under Obama.
And Betsy DeVos has even moved to stop forgiveness of loans that were proven to be fraudulent, because of course she has. And while I'm not one for conspiracy theories, I can't help but see a link between the way she runs this agency and her investments in student loan debt collection agencies.
These conflicts of interest were disclosed to Congress during her confirmation process which culminated in a dismal hearing performance where Betsy DeVos let on that she doesn't know much of anything. None of this stopped the Republicans from confirming her but that was basically a given from the outset.
As if this wasn't enough, wages in the US have been stagnant for 40 years and this vicious cycle of rising costs and declining relative income has resulted in a birth rate that's lower than it's been for 30 years. And if you are a person of color in the US, your primary and secondary education may have been substandard due to a $23 billion per year funding gap between overwhelming white and non-white school districts.
Budgets are moral documents, a list of national priorities that we have decided to collectively pay for. Our moral compass needs calibration if we are electing officials who will give away $1 trillion in tax cuts while forcing young people to finance their own education to compete in a job market that's been broken by 40 years of wage suppression by the very same rich people getting the tax cut. Did I mention that Trump's Labor Department tried to pass a rule that would allow restaurants to confiscate tipped wages from employees? How much worse do things have to get before we start fighting on behalf of our own children?
It would be outrageous if it wasn't so normalized.
In 2004, the amount of mortgage originations by the 18-29 year old demographic was nearly twice as high as it is today (around $80 billion versus about $40), showing the negative correlation between the growth of college education costs and the ability of young people to afford homes. Not only does this represent young people having less housing options, it also means young people have less opportunities to invest and build wealth.
One of the key features of the decade leading up to the Great Recession was increasingly high levels of graft and malfeasance on the behalf of loaning institutions. Fraudulent, un-affordable or otherwise unsuitable loans fed an investor bubble which skewed housing prices and created a web of debt that hurt the global economy when it went bad. Similar patterns are repeating in the student loan market and the government's own watchdog has criticized the US Department of Education (DoE) for how badly it is mishandling student loan servicers.
These servicers regularly flaunt the rules established by the DoE and are rarely held accountable. Instead of protecting consumers, there has been a concerted effort by DoE secretary Betsy Devos and the Trump administration to roll back protections for borrowers and enhance the ability of servicers to drive up costs to both consumers and the federal government. Servicers have engaged in patterns of deceptive behavior to make it harder for students to pay back their loans and thereby increase profit margins through higher interest fees and penalties.
The DoE has to audit phone conversations between servicers and borrowers and found that in 61% of the calls they listened in on, there was evidence of failure on the part of the servicers - they gave wrong or misleading information. This problem did not start with Trump either - Obama failed to check abusive servicers as badly as Trump has. A key difference between the administrations, however, is that Trump's DoE is actively fighting the auditing agencies in court.
There are currently lawsuits against student loan servicers such as Navient and Betsy DeVos's DoE is backing servicers over borrowers by arguing nothing to see here, move along. Of course, the inspector general of the DoE itself is trying to tell Betsy DeVos that there is in fact, something to see here but there is no evidence she is listening. Things are so bad that even teacher's unions are taking Navient to court over their deceptive and abusive practices that cheat borrowers out of loan forgiveness. Out of 29,000 potentially illegible applicants, only 96 have been approved for forgiveness under a program that began under Obama.
And Betsy DeVos has even moved to stop forgiveness of loans that were proven to be fraudulent, because of course she has. And while I'm not one for conspiracy theories, I can't help but see a link between the way she runs this agency and her investments in student loan debt collection agencies.
These conflicts of interest were disclosed to Congress during her confirmation process which culminated in a dismal hearing performance where Betsy DeVos let on that she doesn't know much of anything. None of this stopped the Republicans from confirming her but that was basically a given from the outset.
As if this wasn't enough, wages in the US have been stagnant for 40 years and this vicious cycle of rising costs and declining relative income has resulted in a birth rate that's lower than it's been for 30 years. And if you are a person of color in the US, your primary and secondary education may have been substandard due to a $23 billion per year funding gap between overwhelming white and non-white school districts.
Budgets are moral documents, a list of national priorities that we have decided to collectively pay for. Our moral compass needs calibration if we are electing officials who will give away $1 trillion in tax cuts while forcing young people to finance their own education to compete in a job market that's been broken by 40 years of wage suppression by the very same rich people getting the tax cut. Did I mention that Trump's Labor Department tried to pass a rule that would allow restaurants to confiscate tipped wages from employees? How much worse do things have to get before we start fighting on behalf of our own children?
It would be outrageous if it wasn't so normalized.
