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When too much is not enough…

July 11, 2012

Spent the better part of my evening yesterday filling out on-line forms for a parent plus loan for my son to go to college this fall, and frankly felt by the end of the ordeal that my balls were in a vice and being turned by the banks.  Again?  Really?  After what they did to me the past 4 years?  What did they do to me, you ask?  The same thing they did to you.  They devalued my house, decreased the value of the dollar, effectively reducing my pay, and raised the interest on my credit cards.  As if that wasn’t enough, they’re now gouging me on my kid’s college loans! Well, why not?  The cronyism and autonomy with which the financial community has been allowed to operate as a result of deregulation has given these institutions free reign to set interest rates and tack on countless fees with no government oversight.  As recently as last month  Mr. Obama had to execute an executive order so that student loans would stay at the current interest rate. (7.9-8.9 for subsidized loans..)  If he had not done this, loans would have almost doubled to 13%.  Since I am in an income bracket that precludes any of my children from qualifying for Pell Grants, I am pretty much at the mercy of the banks if I want my kid to go to college.

So as I’m filling out the forms for these various loans on the fafsa website I am getting this claustrophobic feeling that I am signing my life away.   Looks like I will be indentured to the banks for the remainder of my career, which will likely be extended into my 70’s, or my son will be making a college loan payment which basically amounts to a mortgage payment, for roughly 20 to 30 years after graduation. The banks have figured out a way to harvest my future income before it ever gets into my wallet!   And this after they took the bailout package the government offered  to pay their bonuses and build up their assets.  Sheesh!.  So in a strange way they are taking the free money they got from the government and turning around and loaning it to me at a hefty interest rate, and all with the blessing of the do nothing government, who got elected by the financial lobby to maintain their control of the money.  Adding  insult to injury, we will all be paying higher taxes to pay the interest on the 800 billion the Chinese loaned us to bail the banks out!  This is the kind of double dipping that is breaking the back of the middle class, and is a great example of how banks are contributing to the decay of the American Dream. Hardly a day goes by that we don’t hear about malfeasance and mismanagement in the banking industry. And yet, the 1% of this country are using their money and their power to close off opportunity by restricting access to a college education for thousands of middle class working americans, who by all rights have no way of moving up the economic ladder except through the doors of higher education.  Fewer and fewer kids getting out of college are finding work in their chosen field, and the debt load is tipping the scales at 3 trillion for college loans.  That’s “trillion”.   According to statistics,  It is now the second highest total debt after credit card debt.  And the wise minds of the government, those purvayors of democracy and free enterprise, have provided this environment, and have  obediently  closed loopholes so  that one can’t even include school loans in a bankruptcy.  This amounts to indentured servitude for  millions of our children over the next 20 years.  The options are to go 100,000 dollars in debt for the chance to compete for the few good jobs, or be resigned to a low paying job with no healthcare, no rights, and little chance for advancement.  The repayment tables located on page 7 of the 10 page long promisary note that I eventually, grudgingly brought myself to sign  are shocking;  it now costs 24,570.00 to attend Michigan State University as a Freshman (including room and board).  This doesn’t include any proposed increase that the University may decide to levy for the 2012-2013 school year.  This is a public land grant university.  As such it is supposedly a good deal.  A friend of our son is heading to George Washington University in the fall.  His cost will be roughly double that.  As it is I am signing on for at least $80,000.00 in debt over the 4 years of a bachelor’s degree.   In contrast, when I went to college in the 70’s, the cost was about about one-twentieth of this,  (it cost me roughly 6,000 dollars for my 4 year degree…)and although I had a scholarship, I was able to work my way through.  If you did have to borrow money the loan rate was 4% (1979 dollars…) and you were not required to begin payment until 9 months after you graduated or quit taking courses.  This meant that when I graduated I was sufficiently solvent to be able to partake in the consumerist vision of the American Dream.

But that was “the good ol’ days”.   It seems as though the common wisdom today is to cut out the middle man, and have kids so in-debt once they get done with school that the majority  will be virtually indentured to the banking industry into their  thirties and forties.  And with a 3.1 trillion dollar river of interest pouring into the banks, courtesy of the policies of an oligarchic government that panders to the banking lobby, the final pennies of our so-called economic recovery will be collected, stacked and counted.  There are market contingencies in place, and governmental policies to insure the death of the middle class.  And just maybe this is what is needed to radicalize a people who have become complacent with their bread and circuses.

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