President Obama yesterday did two incredibly important things in regards to student loans and debt: he signed an executive order allowing 5 million student-loan borrowers to cap their payments at 10% of their monthly income (and provided some other important assistance to student loan borrowers), and he endorsed Elizabeth Warren's bill to allow students to refinance their debt at lower interest rates.
Student debt is one of the biggest economic issues of our time. It is foundational to what kind of society we are and want to be-- do we make an investment in our future the way earlier generations did, to our great benefit? In the 1940s, free college education to millions of World War II veterans through the GI BIll helped build the American middle class and the American economic agenda that made the next 30 years the most prosperous in our country's history. Pell Grants and other student aid programs, over the next couple of decades after the GI Bill, added to that legacy.
Now we live in an era in which a college education is becoming harder and harder to get. Between slashes in student loan and aid funding forced by Republicans in Congress, the skyrocketing cost of college tuition, the flat incomes of middle and working class parents trying to send their kids to college, and a high student unemployment rate, getting a college education has become impossible for too many potential students. And for those who do go, the amount of debt they have to take on is all too often overwhelming. Add on the unscrupulous actions of bankers trying to gouge more money out of the student debt system, and students who were already treading water or drowning in debt, are now swimming with sharks.
This is morally wrong, and frankly, it's stupid in terms of our future. The GI Bill and Pell Grants were among the best investments our country ever made economically. This country would be far better off if we made college easily affordable for everyone who wants to go. We should say a big no to the student loan sharks and profiteers on Wall Street, and a big no to the Republicans in Congress who want to slash student loan and aid funding even more. President Obama did the right thing yesterday by signing this executive order and endorsing Senator Warren's terrific student loan refinance bill. You can add your name to a petition calling for the bill here. In the meantime, watch out when you go into the water-- there's student loan sharks out there...