I’m sure you’re already mad at me after reading the headline. Hear me out.
If student loan rates double, it could mean the birth of a new student uprising in America similar to the one that’s changing Quebec. And an energized student uprising is exactly what America needs to wake Americans up to this corporate state’s war on the 99 percent.
If Congress does nothing before July 1, the interest rates on Stafford student loans will double from 3.4% to 6.8%. This means millions of students and graduates already burdened by a crushing economic climate with very few jobs, and even fewer good-paying jobs, will be forced to default on their loans. This means the student loan debt bubble, which has already dwarfed credit card debt by surpassing the $1 trillion mark, could soon burst like the housing bubble did.
As a result, easy access to student loans could be over, and nobody except the very rich will be able to afford the alarmingly high cost of a college education. The college presidents who happily raise tuition every year – most of which gets paid for by these same student loans – will suddenly see their endowments drop to a record low. And with no borrowed money from students to finance schools, professors will inevitably lose their jobs and colleges will cut entire courses and programs from their curricula, leaving higher education flattened.
Mark Cuban made a reference to “The Coming Meltdown” in a recent blog post, in which he compared the student loan bubble to the housing bubble that burst in 2008. Students getting a degree with borrowed money likewise do it with the expectation of landing a good-paying job to pay off that borrowed money. But with a youth unemployment rate of up to 17%, a lot of those graduates are being forced to default on their loans as they have no income to pay off their debts. If/when those students who defaulted do find a job, collectors can legally garnish 25% of their wages. That certainly won’t help that student move out of their parents’ house when the cost of rent, food and fuel is still astronomically high. And unlike credit card debt, student loan debt can’t be discharged through bankruptcy. It’s financial enslavement for many at a time when the economic climate is on the precipice of disaster.
Under such circumstances, it isn’t hard to envision a society where a well-rounded education and a good-paying job will be a commodity available only to the most privileged young people in the top 1%, while everyone else is relegated to unaccredited institutions and a life of low-wage work that will reinforce the wealth gap between those at the very top and everybody else. This is exactly why Congress allowing the Stafford student loan rates to double for so many who are already struggling could spark the youth-led revolution that America desperately needs.
The CLASSE movement, or Maple Spring, continues to bring hundreds of thousands of young Québécois into the streets. While originally tiggered by a proposed increase in tuition, it has now become a collective youth-led resistance to government austerity measures, cuts to social welfare programs and the preservation of preferential treatment for the wealthiest of society at the expense of the next generation. And the government’s attempts to suppress the student movement has only thrown gasoline onto the flame.
If student loan rates double on July 1, it will be a perfectly-timed call to action for America’s current students, unemployed graduates and anyone already struggling to pay off a mountain of student loans. It could be an opportunity for the youth of America to prove wrong our elders who say we’re nothing but a bunch of Facebook addicts and Kardashian groupies.
And with the elections just months away, it will be a perfect opportunity for students to vote out all the members of Congress who voted to keep student loan interests rates low only by raiding healthcare funds, instead of responsibly demanding that corporations and the wealthiest 1% pay their fair share. It will be our time to sway the direction of this country by calling for new leadership and holding them accountable for their actions.
Please, please double the rate, Congress. It could be just what this country needs to wake up.