Student Loan Debtors Should Reap What’s Been Sown for Them…

Published by Chris Oestereich on

…or something.

Veronique de Rugy, unserious shill for the wealthy, is at it again.  She’s now advocating that the screws not be loosened off of those drowning in student loan debt due to the perverse consequences it might cause.  (Yes, I’m mixing metaphors. Get over it.)

Let’s review this logic:

A. People are drowning in student loan debt

crazy student loans 2011-q2.png

B. College tuition has been skyrocketing for years

C. Wages are flat

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D. The job market is abysmal

and not expected to get much better in the U.S. over the next 5 years.

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E. Credentialism has jumped the shark

A+B+C+D+E = People are lazy and have made bad decisions and must be made to suffer to learn from their mistakes!

Well, that’s what I think the message is if you read between the lines.  What Ms. de Rugy said specifically is:

By keeping student loan rates artificially low, the federal government is contributing to the rapid increase in college tuition and forcing today’s workers to subsidize the educational choices of big earners.  

She then points to the following chart which is meant to show us that, “In 2008 the interest rate on student loans was 6.8 percent. This was reduced in stages over the next four years to 3.4 percent. The data show a notable rise in student loan debt as interest rates fell between 2009 and today.” (emphasis mine)

She then adds that, “Over the past decade, student loan debt has increased by 281 percent, from about $260 billion in the first quarter of 2004 to $990 billion in the first quarter of 2013.”

Now wait a minute, I thought the “notable rise” occurred between 2008 and the present.  Hmm.  Let’s check the tote board.

crazy student loans 2011-q2.png

If we look at this chart, it does appear to corroborate  her second point about student loan debt increases over the past ten years.  So what’s the deal with the first point?  Why was that increase “notable” when it was no worse than the prior five years?

Let’s go back to the point about perverse incentives.  Ms. de Rugy suggests that giving a little relief to the folks who are suffering under the weight of their loans would only invite more people to jump into the same boat.  I’m sorry, but if there’s anything I learned from the financial crisis, it’s that when a debt creates it’s own gravitational pull, we must, at all costs, keep it from collapsing into a black hole, or does that only work for people that are corporations and not people that are people?

Okay, so I’ve devolved into nonsense, but what else can you do when the debate terms are set in la la land?

Parting Shot

When the White Witch rules Narnia for good, the Turkish Delight well will surely run dry.