Bank On Students Loan Fairness Act: Will Student Debt Crush the GOP's Chances With Young Voters?
The real challenge for millennials in the U.S may be coming to grips with their poverty. With a good number of them being under- or unemployed, the prospects of them earning as much as the Baby Boomers is slim. The student loan crisis, coupled with other seismic changes, may ultimately determine the direction higher education may take in the decades to come, and also in the short term determine if the GOP is really in touch with the needs of millennials.
A typical undergrad in the U.S. is going to be graduating with an average of $27,000 in loans. The fact that student loans across the country are to the tune of $1 trillion and the interest rates are set to double come July 1 is a worrying fact indeed. To counter this, several groups of millennials have shown initiative. The Georgetown University Student government has joined forces with millennials and initiated a nation-wide campaign to garner support to stop this from happening. Nate Tisa and Adam Ramadan point out eloquently:
"The idea that future generations — and even our own peers — will be denied this opportunity because they lack the resources is disheartening. To accept that some Americans are unable to pursue the education they thirst for and need is to defer the American dream."
I couldn't agree with them more.
Additionally, the fact that several leading universities have endorsed Senator Elizabeth Warren's proposal is welcoming. Her "Bank on Students Loan Fairness Act," seeks to "prevent doubling of interest rates by providing funds for such loans through the Federal Reserve System, to ensure that such loans are available at interest rates that are equivalent to the interest rates at which the Federal Government provides loans to banks through the discount window operated by the Federal Reserve System, and for other purposes." This bill seems to be gaining momentum, though one needs to see how much traction it receives from Congress.
A recent book that I co-edited, Millennials Speak, has an essay dedicated to student loans. In it, Robert Thead, the co-editor, points out that college tuition increased by more than 400% since 1980. This increased borrowing, coupled with a lack of jobs in the market, is fueling the crisis that we are witnessing today. The solution, he points out, is to better educate the youngsters, even before they enter college about their career prospects and also the financial realities of the "real world." I also agree with Thead that the student loan crisis will have long-term impact in the United States in that these students may not be able to afford housing mortgages and in turn impact the housing market. Further, an entire generation is growing up to be risk-averse, which is a death-knell for a capitalist economy such as the U.S. Student loans should perhaps be branded as "education mortgages," and allowed some of the leniencies not accorded right now.
With bipartisanship all but dead, and congressional deadlock plaguing progress on most issues in the country, it remains to be seen if the GOP reacts positively to these requests from the millennials. Whether it responds favorably or not will determine whether they truly understand the interests of the affected youth. It may well be a reflection of how "in tune" they are with the needs of the millennials, too!