2019/03/07

An Open Air Debtors' Prison

The crushing student debt crisis, compounded by several states' practice of revoking the professional licenses of debtors who fall behind on their student loan payments, is creating an underclass of economic exiles in their own country.
Student loan debt is one of the biggest burdens to young Americans, recently ballooning to $1.5 trillion and topping car and credit card debt. Millions are struggling to repay money they borrowed for an education they were told would set them up for financial success, but many states across the country have barred individuals from working if they have not yet paid off their loans.
Fourteen states across the country currently impose policies to suspend, deny, or revoke occupational licenses from borrowers, preventing them from working and, ultimately, fully paying off their loans. This practice applies to a wide range of professions, from massage therapists, barbers, and firefighters to psychologists, lawyers, and real estate brokers.
These license revocation laws were introduced in the 1980s in an effort to address the then much milder problem of student loan defaults.

But never let our elites be accused of thinking ahead. Since then, college tuition has skyrocketed far out of proportion to any consumer price index--because of government meddling.

In the 80s, tuition was pretty much keeping pace with inflation. That started changing drastically in the 90s, yet the archaic license revocation laws remained on the books.

tuition

Amazingly, the Senate is considering legislation to gt rid of these ridiculous laws.
Sens. Marco Rubio (R-FL) and Elizabeth Warren (D-MA) recently partnered to introduce the Protecting Job Opportunities for Borrowers (Protecting JOBs) Act (S.609). This is the second time they have proposed this type of legislation. The bill would “prevent states from suspending, revoking or denying state professional licenses solely because borrowers are behind on their federal student loan payments,” according to a press release issued last week by Rubio’s office. The legislation, which would give states two years after its passage to comply, offers protections for driver’s licenses, teacher’s licenses, professional licenses, and “a similar form of licensing to lawful employment in a certain field.”
Now, I'm wary of any scheme Rubio and Warren come up with on their own, let alone hatch together. But anyone with an ounce of compassion can see that repealing these laws is the right call.

And if you can't muster compassion for America's young, defrauded debt slaves, consider exercising some enlightened self-interest. There are enough forces converging to render a large number of young men unemployable. You do not want a sizable fighting-age male contingent with nothing to lose.

And now that the same Senate is poised to overturn Trump's emergency declaration, running on a full student debt amnesty may be his best shot at reelection.


There's one week left to back my new martial thriller Combat Frame XSeed: Coalition Year 40. Choose from a wide selection of tempting perks, and help us fund our CFXS audio book.

Combat Frame XSeed: Coalition Year 40

Back it now!

5 comments:

  1. The year I started college, the Guaranteed Student Loans popped into being. One year later, it was pretty much impossible to "work your way through college with a part time job".

    It was another gift to the Boomers that GenX on down has the privilege to pay back.

    ReplyDelete
    Replies
    1. The chart backs up your observation.

      Recently I ran across an article at one of the Conservative Inc. sites bewailing that people over 60 who'd taken out student loans to get new training after losing their jobs or to earn higher degrees in hopes of advancing their careers now owe tens of millions in student debt.

      That's peanuts compared to the 86 billion owed by Americans aged 30-39, but if Boomers are starting too feel even a comparatively minor pinch, we may finally see action on student debt amnesty.

      Delete
  2. Brian and Hien-kyo
    This Nassim Nicholas Taleb about a new book he's working on will be or relevance on the issue of student debt (and others)
    https://t.co/cvHu7FTu8k

    He had a tweet observing that the high tuition pays for the professors, admin and real estate developers but I can't find it
    xavier

    ReplyDelete
  3. Here's the tweet about education and implicitly about the high tuition/student debt
    https://twitter.com/nntaleb/status/1099688385977958402
    xavier

    ReplyDelete
    Replies
    1. If it only paid for professors and real estate to expand campuses, that would be ok. It's the administrative bloat and pointless building remodels that is one of the complete wastes.

      The student union at my land grant state school had 3 remodels while I was there (as a student and later as an employee), yet a "temporary" building built in the '40s was allowed to rot instead of being repaired or torn down and rebuilt.

      Delete