Why Student Loans are Becoming More Expensive

Student loans became a political football with the Republican Congress, kicked by the conservative majority, not over the goal line, but to the sidelines. Any time it got the chance, it voted to raise the costs to students. What Congressmen say they were doing was lowering costs to the government, but it means the same thing: privatizing the program for their good friends, the bankers. It is part of the conservative program, first laid out by Newt Gingrich when Republicans took over as the majority in the House of Representatives in 1994. That's why lower interest rates on student loans were one of the first things the Democrats passed in the House in 2007.

So, student loans went for higher (less-subsidized) interest rates. The banks lending them got more business, because fewer funds went to the fully subsidized programs. Meanwhile, the wealthy got more tax breaks. To understand why the tax breaks are part of the conservative program: go to taxes. You may wonder why there is an essay on student loans on a website about the parallels of the late Roman Empire and America now. Here is the reason: the privatization of student loans was part of the "conservative" program, because it furthered their goal of political dominance.

If higher education is free, as it was after the New Deal in places like New York City, all sorts of obnoxious, well-educated radicals can emerge. Of course the United States also benefited from the emergence of millions of talented people nurtured by an open educational system.

As higher education becomes more expensive, and students have to go significantly into debt, they will more likely keep their heads down and work hard in the corporate system--they have to pay back their loans, after all. So, not only does privatization of student loans "get government out of business," and provide more opportunities for banks, but it also creates a more compliant work-force.

It's not clear that social control was intended when Republicans promoted privatizing student loans, but it is certainly compatible with the conservative world-view. Graduates who are heavily in debt are much less likely to become involved in radical politics, much less likely to challenge their employers--they've got to pay off those loans--and much more likely to choose better paying jobs, rather than "social service" jobs (which may be potentially subversive), again because they have to pay off those loans. A whole series of individual choices are affected when people have to go heavily into debt in order to pursue their education.

A note here about the use of the word "conservative:" today's American conservatives are not conservative at all. They are involved in the radical re-making of the American political system to more closely conform to something that looks very like the Roman Empire in the fifth century, when the Senatorial class dominated. Since this was a political system in our cultural past, "reactionary" might be a more accurate label.

The strongest arguments for subsidized student loans have to do with nurturing talent and energy in large numbers of people who would not otherwise be able to realize them. The great flowering of American creativity and business because of programs like the postwar GI bill shows how wide access to education serves the whole society and even serves American power. The cramped and mean-spirited reduction of scholarships, loans and open admissions programs all will have the effect of cutting off new talent. It will reduce society's energy and, ultimately, will diminish the wealth of the whole society.

While "conservatives" go on about America's destiny, they are actively involved in subverting it, not only in education, but in law, taxation, governance, culture, finance and economics and ultimately in security, as well.