This weekend George Bush did something so out-of-character that it seems impossible to believe–he signed into law new legislation that will actually benefit the American people. Specifically new laws that overhaul the corrupt and bloated student loan system:
The law, which received overwhelming bipartisan support in Congress, will slash federal subsidies to private loan companies and increase grants for students. It will gradually reduce interest rates on federally subsidized loans for low-income students to 3.4 percent over five years. The law will also offer loan forgiveness for those who have held public service jobs for 10 years and will cap payments on federal loans at a certain percentage of a college graduate’s income.
This is not a perfect solution by any means. The idea that public employees need to pay 10 years’ worth of loans before receiving forgiveness is still a substantial burden to bear, since public salaries don’t match the private sector at the best of times–and certainly not for college graduates. It also doesn’t address the reprehensible changes to bankruptcy law that make it virtually impossible to discharge private loans in bankruptcy. But it is progress, especially in light of stories that illustrate the burdens of students graduating so deeply in debt:
Kristin Cole, 30, who graduated from Michigan State University’s law school and lives in Grand Rapids, Mich., owes $150,000 in private and government-backed student loans. Her monthly payment of $660, which consumes a quarter of her take-home pay, is scheduled to jump to $800 in a year or so, confronting her with stark financial choices. “I could never buy a house. I can’t travel; I can’t do anything,” she said. “I feel like a prisoner.” A legal aid worker, Cole said she may need to get a job at a law firm, “doing something that I’m not real dedicated to, just for the sake of being able to live.”
This is a terrible situation for any young person to be in, and it’s a not-so-subtle means by which they are directed to take on big-paying corporate jobs just to maintain a reasonable standard of living. It makes the idea of public service or nonprofit work impossible to conceive of–you should not have to live in poverty just for the sake of doing something more idealistic than being a cube slave. Daniel Brook’s excellent book, “The Trap”, explores this idea in depth–the reason why youth activism isn’t as powerful as it should be isn’t necessarily because today’s youth are more materialistic or nihilistic (although there’s much truth in that), but that they’re simply too burdened by trying to make ends meet, thanks to overpriced student loans and predatory credit card companies that doom college student to decades of debt servitude just to make a buck. Or as student loan exec Kevin Bruns whines, “How can you run a lender-based program if you’re not allowed to earn a reasonable profit margin?”
The G.I. Bill gave literally thousands of people a chance to build a real future for themselves while serving their country, and while this act is not as sweeping, it IS a good start on getting us back on the right road of providing for our young people’s education, which can only benefit our country in the long run. As for Bruns, here’s hoping he finds himself another line of work due to lack of opportunity soon enough.