I'm sure you're already mad at me after reading the headline. But 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 up Americans to this corporate state's war on the 99 percent.
As most folks know, if Congress does nothing before July 1, the interest rates on Stafford student loans will double from 3.4 percent to 6.8 percent. 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 into defaulting on their loans. This means the student loan debt bubble, which has already dwarfed credit card debt by surpassing the $1 trillion mark, will soon burst like the housing bubble did.
This means easy access to student loans will be over, and nobody except the very rich will be able to afford the alarmingly high cost of college education. The college presidents who happily raise tuition every year, of which most of it 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, colleges will cut entire courses and programs from their curriculum, and higher education will be flattened.
Mark Cuban made a reference to "The Coming Meltdown" in a recent blog post, where he compared the student loan bubble to the housing bubble that burst in 2008. "House-flippers" who used borrowed money to buy vacant property for pennies on the dollar, fixed it up and sold it for twice as much as they bought it to pay off the borrowed money, suddenly lost that property to the banks when there was no more borrowed money to be had.
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 percent, 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 percent of their wages. That certainly won't help that student move out of their parents' house when the costs of rent, food and fuel are still astronomically high. And unlike credit card debt, student loan debt can't be discharged through bankruptcy. It's literal financial enslavement for so 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 percent, while everyone else is relegated to unaccredited institutions and 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 Quebecois into the streets. While originally instigated by a proposed increase in tuition, has now become a collective youth-led resistance to government austerity measures, cuts to social welfare programs and 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, just before school starts back in session. It will be American Youth's opportunity to prove wrong the members of elder generations who say we're nothing but a generation 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 members of Congress who voted to keep student loan interests rates low only by raiding health care 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.