It’s Health Care, Student Loan Debt, Unemployment, Stupid!

This  Occupy Wall Street movement is morphing into a huge critique of our health care system, burdensome student loan debt, and the lack of jobs.

They are giving voice to real people facing real problems that have not gotten enough attention from the mainstream media. Check out this interview of a protester by a Fox News reporter. 

This may not be a political movement with policy solutions or even a clear idea of who should fix these problems. But I don't care. I'm just happy that people are giving voice to serious problems.

Health insurance. We still have yet to get a dollar from our health insurance company for all of Ian's speech therapy for 2011, even though by law, they are required to pay for it. We're talking thousands of dollars. A lot of my friends are freelancers who don't have health insurance. One family pays a thousand dollars every month for blood pressure medicine. 

Student loan debt. We'll be paying off student loan debt for useless graduate school degrees until we're ready for retirement. No kid starting off life should be saddled with $80,000 in student loans. Another friend spent two years getting a teaching degree, which ate through most of her savings, and couldn't find a teaching job. 

Unemployment. We're lucky. Steve has a job. If he lost his job, we would be royally screwed, since all I'm qualified to do is stack sweaters at the Gap. Because I'm not earning money right now and Steve's salary has dropped by a rather substantial amount, we're making less than we did three years ago. Still, I would be an ass to complain. We're lucky. However, a good number of my friends aren't. If they are employed, they are looking a stagnant or decreasing wages. Their homes — their sole investments — are worth less than what they paid for it. They are driving around in patched up cars and avoiding the phone calls from creditors. 

This movement probably won't get too far. I'm just happy that these people are getting just a minute or two of attention. If I can kick this cold, I'll join them on Thursday morning. 

UPDATE: So, I just read this devasting account at The New Republic about chuckleheads who are actually on the streets downtown. It's a stark contrast from the sober, real messages that I'm reading on blogs like this. Wouldn't it be funny if a bunch of fruitcakes helped jump start a real movement that isn't really happening on the street, but on the Internet? 

32 thoughts on “It’s Health Care, Student Loan Debt, Unemployment, Stupid!

  1. “Their homes — their sole investments — are worth less than what they paid for it.”
    Those purchase prices were unsustainable. Lower prices are good news for young families who will be buying over the next few years. With any luck, those new buyers will be able to drive cars that aren’t patched up and won’t be dodging creditors phone calls, because they will be able to comfortably afford their payments.
    Repeat this cost reduction over higher education and medicine (which should be possible if we’re smart), and we’ll really be getting somewhere, even if wages are nominally lower than they were in 2007.

  2. They are driving around in patched up cars and avoiding the phone calls from creditors.
    It would be very depressing to have to do that, but I’d like to point out that driving a patched up car and avoiding phone calls are two of the most important rules for living a calm life.

  3. driving a patched up car and avoiding phone calls are two of the most important rules for living a calm life.
    Well said, MH.
    I’m frankly fascinated by these protests, and getting more so all the time. The American right has a certain language of populism politically available to them; it’s been around since Nixon, if not earlier. But the left, despite the actual egalitarian origins of populist activism in the U.S., hasn’t handled populism well throughout the 20th century. You could blame that on the progressives, perhaps, or simply on WWII, and the dominance of the warfare/welfare state which the Great Depression and the Cold War bequeathed us with. But whatever the ultimate historical or ideological causes, in actual practice serious left-leaning populist agitation has been basically confined to the anarchist, New Left, hippie margins for most of the past century. I’m doubtful that Occupy Wall Street will end up being anything different…but there is the possibility that maybe, just maybe, the intense attacks on the welfare (and sometimes even warfare) state that have been made by the Tea Party are moving the goal posts, and as a result more and more contemporary liberals, who normally are all about the usual progressive answers, are rethinking what it means to be on the left, and are opening themselves up to some real, radically democratic, decentralized, populist, even anarchist responses. (Tim Burke was hinting at this in a recent blog post.) It is fascinating to watch from here in Wichita, anyway.

  4. I taught “I Stand Here Ironing” this morning, an old favorite (I wrote my undergrad honors thesis on Tillie Olsen, though not on this story). Olsen was big in the Young Communist League in the early 30s and very active in union organizing. (In the 40s, she was president of the PTO at her kids’ school–LOL!)In the 1930s, the populist revolt against the failures/weaknesses of capitalism was based around socialism and communism, but nowadays those are such dirty words/ideas and are totally discredited as alternatives. But back then, the existence of the alternatives helped push FDR to more centrist responses to the Depression (and probably also saved this country).
    I think we have to be unafraid to say that redistributing income via taxing high income earners is not a bad thing. We had much more economic stability and a better quality of life overall when we did so. This vast income inequity may fulfill the Galtian moral perspective about what people “deserve,” but it’s just not what’s best for the country or the world.

  5. What does Wall Street have to do with student loan debt? I don’t see why a political scientist gets happy about a set of totally incoherent political ideas. Surely both history and political science teach us that incoherent ideas lead to bad policy outcomes, if they lead anywhere at all.

  6. Surely both history and political science teach us that incoherent ideas lead to bad policy outcomes, if they lead anywhere at all.
    I haven’t been keeping in touch with the field lately, but I’m unaware of any strong positive relationship between coherence and outcomes. Everything is too contingent and being able to hold together an incoherent coalition is certainly far more useful for a leader than being able to be coherent.

  7. Wendy, you’ll have to do better than that. Just because a protestor asserts that there’s a connection between Wall Street and high student loan debt doesn’t mean it’s so.
    The plain fact is, it’s university faculty and administrators who have been saddling students with six figure debts for useless degrees in “women’s and religious studies.” There are no other words for that behavior than wicked and evil. The universities should be forced to eat those loans, and the losses should come out of the salaries of tenured faculty and administrators. But Wendy doesn’t want to take that kind of responsibility; she wants to blame someone else.

  8. Good point about how politics is about coalitions, and coalitions often involve some degree of incoherence.
    If you’re concerned about health care, student loans, and unemployment, fundamentally, don’t you want to increase taxes/ otherwise squeeze the people who are making a lot of money (defined as a lot more than you, which isn’t too hard if you’re unemployed) and then have the government give some of that money to you? That’s not incoherent. It might not work, but it’s not incoherent. I’m guessing a lot of these people would be perfectly comfortable 1) raising taxes on people who make over 200K, 2) raising the capital gains tax 3) getting rid of the hedge fund manager tax rate exception.
    Am I correct in thinking that the TP wants the same sort of thing in reverse? that is, a smaller government that provides less resources to people other than themselves? I do see that argument as a bit more incoherent, but mainly because there doesn’t seem to be a good definition of “people other than themselves” (as, say, evidenced by medicare/social security). What does the TP want to cut to make the government smaller? (other than foreign aid?, which as we all know is a miniscule part of the budget).

  9. This Wall Street thing is very confused. If student loan debt is indeed shaping up at one unifying problem, then Wall Street doesn’t have anything to do with problem. And what is the solution to that problem? We can’t just eliminate all that debt. I would like to see more public support of the state and city universities. My mom, the first woman in her family to get a BA, is indebted to Hunter College. Perhaps there needs to be responsible lending practices placed on universities. If you can’t buy a million dollar house without a downpayment, maybe you shouldn’t be allowed to borrow that much for school.
    I do have sympathy for people who attend TP rallies, because, like these kids on Wall Street, they face diminished job prospects, no pensions, rising costs of health care, etc… I think a lot of people are in the same boat, right or left, but ideology helps you choose who is to blame.

  10. I see some relationship between the student loan situation and the housing crisis, in that both were brought on by very loose lending. And in both cases the value of the “collateral” (be that a house or a college education) was assumed to be such an unquestionably good thing that no one looked hard enough at its overvaluation.
    What’s the education equivalent to a short sale? Is that what we need?

  11. “The plain fact is, it’s university faculty and administrators who have been saddling students with six figure debts for useless degrees in “women’s and religious studies.” There are no other words for that behavior than wicked and evil. The universities should be forced to eat those loans, and the losses should come out of the salaries of tenured faculty and administrators. But Wendy doesn’t want to take that kind of responsibility; she wants to blame someone else.”
    First, faculty do not give out student loans. Universities do not give out student loans. Universities can give grants but it is banks that give loans. So I really have no idea what you’re talking about. There are no loans for universities to “eat.” There is a system whereby the university sets tuition costs for which students must seek out loans (and grants and scholarships), and the setting of costs may be criticized, but that has nothing to do with the fact that students owe money to banks, not universities. If you have specific info on how that’s different than my understanding and experience (I paid back my student loans to SunTech, for example, which is now apparently Chase), please let me know.
    Second, how do you know people with women’s studies/religious studies jobs can’t get jobs? With all due respect to Laura, I think she’s full of it when she says she’s not qualified for any jobs. Plus, she is a political science major, not in women’s studies/religious studies. Our former babysitter was a women’s studies major at an Ivy League university, and she is currently employed in a job related to her major.
    Third, when the economy was booming under Clinton, people had every reason to believe that “useless” degrees would lead to jobs. It’s because the economy sucks that these jobs aren’t around any more.
    Fourth, I’m the wrong person to talk to because I work at a university that has no liberal arts majors. I am fully aware of the pressures on students to go into majors that are “useful.” At the same time, we have employers telling our administration that they need more liberal arts skills from our graduates. Go figure.

  12. Sorry, “Arizona State.” For somebody who went to NYU or Yale and can’t pay their loans, we make them list their degree as from Arizon State and provide them with transcripts saying that’s where they went. I suppose that won’t work if you went to Arizona State, but I’m sure there is a functional equivalent.

  13. We should decrease the availability of government-backed student loans. And private loans should be dis-chargeable in bankruptcy, like other loans are. Yes, that might mean they become unavailable, and as a consequence, certain degrees become less available to certain people. But I think that’s a risk we’re going to have to take. The current system creates all kinds of mess.
    So my fixes for student loans: 1) government backed student loans, administered by the government, available to those who qualify based on income, not dischargeable in bankruptcy. 2) schools with high default rates loose their ability to have their students have access to their loans (and not just for-profit institutions, but any institution that has a high student loan default rate.
    Does that mean certain poor students won’t have access to an education? yes. But, I don’t think we were giving them access to education anyway. We were giving them access to false hopes.

  14. BJ’s ideas would be good, but they only keep the problem from getting worse. They won’t do anything about the bad loans of the kids today. That’s where my plan comes in. Be sure to write your Representative.

  15. But what if you’re defaulting and you already went to Arizona State? And, most of the defaulters already went to schools way lower down in the food chain that Arizona.
    NYU, Columbia, Yale, Harvard, Northwestern, U of C, . . . . all have default rates less than 2%. Though, looking at the data, I think there’s reason to fault NYU, especially. Their default rate is 1.5% w/ 105 loans in default, which is way worse than all of the rest (and, worse than some other schools, like U Washington, that might be expected to have higher defaults). We’re right to see something wrong there, compared to its peers.
    But, the schools where the kids are defaulting in droves are places like the “Healthy Hair Academy.”
    http://www.nslds.ed.gov/nslds_SA/defaultmanagement/search_cohort.cfm
    I don’t see anyway out of providing some substantial set of folks with student loans real mitigation of their debts. In many ways, it’s worse than the mortgage crisis, where a solution does seem to be people walking away from homes, putting those homes on the market, and letting other people buy them. We can’t take their educations away (if they did get them) but I don’t think we’re going to be able to get some of them to pay, either.

  16. I think a BA in a liberal arts is a fine thing. There aren’t a lot jobs out there right now and you’ll have a harder time finding a job than a kid with an AA in operating an EKG machine, but I still think it’s a fine thing. I don’t think it’s a fine thing, if you pair up lower job prospects with $80,000 in debt.
    Tuition rates isn’t high because of faculty, like Wendy or the other faculty who read this blog. Tuition has gone up because states aren’t subsidizing it as much anymore, college presidents make a $1 m, research faculty, and lots of trendy campus frills that students are asking for. There are a lot of people to blame. Students themselves need to be more informed and shouldn’t blow their money at marginal private schools, when public colleges are just fine. They should work while they’re in school. I did. In the dish room of the dorm cafeteria.

  17. Wall Street works for its customers. Some of the very big investing clients are endowments and pension funds. As they have been investing in structured investment vehicles, through hedge funds and the like, endowments and pension funds also profited from student loans (which have been securitized, just like mortgages.) (http://www.insidehighered.com/news/2008/01/18/endow)
    I think it was a bad idea to make student loans not dischargeable in bankruptcy. Many students take on more debt than they can ever pay back. If the debt is not dischargeable, that produces lifelong debt slaves. Was it irresponsible lending on the lenders’ part? I don’t know. If it’s not dischargeable, there’s no way the borrower can escape repayment.
    It’s emotionally satisfying to think that student loan debtors are required to pay back the debt. It seems to me that it was a good deal for the lenders (low-risk), but disastrous for the economy as a whole. It is terrible to saddle the most ambitious students with financial obligations which delay their ability to form new households, start new families, and found new businesses. In the long run, economies need population growth more than leverage.
    I don’t know how to get out of this mess. I wish I did. For the lenders to take large losses seems logical–except the lenders include state governments, pension funds and endowments. Promising set rates of return far higher than one could safely achieve fed the appetite for risk. It hasn’t ended. There is no way to satisfy all the current pension obligations, let alone the obligations we already know our state and local governments have created.

  18. “Universities do not give out student loans. Universities can give grants but it is banks that give loans”
    I’m sorry, but the relationship between financial aid offices and student lenders is a little cozier than that. It’s the same as saying, “Investment banks don’t originate home mortgage loans. They just securitize mortgage loans that other people make.” Which is literally true, but hardly takes account of actual industry relationships.

  19. I think there’s enough blame to spread it around. Universities and colleges have been acting like businesses, more concerned with the bottom line than with the education they are providing. Should president of a university pay as well as CEO of a profit-making business of the same size?
    Students and parents have demanded perks like nicer dorms and other facilities unrelated to the educational experience. I don’t know the causality there: did they demand them because of the big tuitions, or are big tuitions the result of the demands?
    Government insisted that lenders expand their loan programs to less-credit-worthy students to improve the dire diversity problem at universities–and therefore government provided loan guarantees.
    Banks and other lenders could only loan large amounts because of government guarantees. But students only needed large amounts because of high tuition rates. Have you looked at the growth rate in tuition over the last 30 years?

  20. “Investment banks don’t originate home mortgage loans. They just securitize mortgage loans that other people make.” Which is literally true, but hardly takes account of actual industry relationships.
    It might indeed be pretty similar, but, even more so than the investment banks, the educational institutions are pretty well insulated because they didn’t actually make the loans. We can take away their ability to access the loans for their students in the future, but I don’t think we can do much to make them payback the loans that were already taken.
    (and, let’s remember that the liberal arts degree from a top 20, or even top 50 institution is not the problem here.)

  21. With housing, we saw the disappearance of underwriting (can this person pay this back?). With student loans, I don’t think we’ve ever had serious underwriting. Student loans should not be handed out willy nilly to every C+ GPA person who asks. There needs to be a much stronger connection between academic performance and loans given as well as between professional goals and loans given. Just like Geico has a very clear idea of your chance of a car accident or theft and price that in, student lenders should have a very clear idea of who they are giving money to and the likelihood of that money coming back. The more I think about it, the more I like the idea of reverting to the old system of student loans being dischargeable in bankruptcy. I also think that the feds should not be guaranteeing student loans, because there needs to be the expectation of pain if their underwriting gets too loose.
    When my dad was in college in the late 60s, there was practically no financial aid. As I recall, my grandparents were told to sell their farm to send their three closely-spaced kids to college, which would have been pretty dumb. But the kids didn’t really need it. My dad went to school for something like $1600 a year at a small private school (Seattle Pacific College–now SPU). If I’m remembering the story correctly, UW was $1,000 a year at the time. My dad was able to earn practically all of the money for tuition during summers. Dining was vile and student programming and facilities were very basic, but he got his degree and he’s still got it.
    I understand that some of my bright ideas have the potential for interfering with my bread and butter, but as with housing, the price of higher education has become untethered from the public’s ability to pay for it.

  22. The more I think about it, the more I like the idea of reverting to the old system of student loans being dischargeable in bankruptcy.
    What is the mechanism for revoking the degree?

  23. “What is the mechanism for revoking the degree?”
    In the professions, you could have defaulters defrocked, disbarred and whatever it is they do to doctors. A lot of those professions require licenses.
    I don’t know what you’d do with the religion/women’s studies graduate. But maybe she’s been punished enough.

  24. Granted, my idea is unworkable. Still seems more workable than taking 1/20th (1/30th, I’m just guessing) of the iPhone generation and leaving them in a situation where any attempt to raise their income above poverty level will fail until they hit $50,000 a year (again, just guessing how much you’d need to pay on a $100k note and move out of student housing).

  25. Just another indicator of how fast our Earth is changing, and of course we can expect more of the same in the coming years. I suggest studying up on how you can best adapt to the future of a fairly rapid rise in ocean levels and the expectable upheavals that will result across all dimensions of human existence

  26. The theme of today’s lecture is don’t believe in arrests of alleged terrorists without proof as non-Muslims are liars … I don’t believe them because they are kuffaar and lying is part of their religion. (Kuffaar is an Arabic word meaning non-believer or an infidel. Its contemporary usage in the UK is highly derogatory).

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