Student loans have become the most profitable and oppressive type of debt in American history, according to Alan Collinge from Student Loan Justice. He joined Ian Punnett (Twitter) to discuss how massive penalties and draconian wealth-extraction mechanisms are in place to collect this inflated debt and how the average undergraduate borrower leaves school with more than $40,000 in student loans. For graduate students, the average is a whopping $80,000. Collinge said that the problem of overwhelming debt "harkens to the birth of our nation" when the Founding Fathers were "absolutely skewered" by debt to the British crown. He continued with the historical fact that Congress was originally tasked with creating uniform bankruptcy laws in order to keep citizens from getting buried under a mountain of debt.
Collinge pointed out that the Department of Education is the "biggest lender on Earth," and that the student loan debt in the United States is at or near 1.5 trillion dollars. He also brought up that in 2004, the average cost of a four-year college education was averaging $16,000. It is now about $40,000. The default rate was 40% back then, but Collinge estimates that it is now somewhere at or over 50%. He added that "thousands or tens of thousands" of Americans have fled the country to escape their student debt. Collinge said he recently spoke with former Department of Education head A. Wayne Johnson who told him that "80% of student loan borrowers are in serious trouble," since while they are paying their loans, their debt continues to climb.
Collinge believes that if the President signed an executive order to immediately forgive student debt, that the American taxpayer would actually "break-even," since only 3 or 400 billion dollars of the current 1.5 trillion loan debt is principal, with the balance being interest owed. He continued with the observation that a college education in most of the developed western nations is either available at a very low cost or free. Collinge concluded that if the threat of a bankruptcy option for student loan debt was made legal, that "it would create a quality educational system that was geared for success" because schools would educate for education's sake, rather than a desperate need to churn out debt-ridden professionals.
OPEN LINES
In the first hour, Ian asked for comments about what Memorial Day means to listeners. David in Georgia talked about his grandfather's history in WWII as an Army chaplain, who served during the Battle of the Bulge. John in Ohio mentioned the book "War is a Racket" by Marine Corps Major General Smedley Butler, which accused the government of using the armed forces of the U.S. as a tool of imperialism and private industry. John concluded that "we have to be suspicious of corrupt politicians and corporate interests" with regard to the armed forces. Pam in Washington State lamented the state of the nation, which she said "is becoming dangerously divided." Coast webmaster Greg Bishop also spoke about his unique music show.