We’re Saddling College Students with Crushing Debt … and the Govt. Is Acting Like a Greedy Profitee

Matt Taibbi: We’re Saddling College Students with Crushing Debt … and the Govt. Is Acting Like a Greedy Profiteer

 

“Even gamblers can declare bankruptcy, but kids who enter into student loans will never, ever be able to get out of this debt.”

Photo Credit: Shutterstock.com/KenDrysdale

August 20, 2013  |

The following content originally appeared onDemocracyNow!

On the heels of President Obama’s signing of a measure keeping federally subsidized student loans at a relatively low rate through 2015, Rolling Stone political reporter Matt Taibbi joins us to discuss how the high price of U.S. college tuition and the federal expansion of student debt to pay for it pose a major threat to the economy. In his new article, ” Ripping Off Young America: The College-Loan Scandal,” Taibbi writes: “The dirty secret of American higher education is that student-loan interest rates are almost irrelevant. It’s not the cost of the loan that’s the problem, it’s the principal — the appallingly high tuition costs that have been soaring at two to three times the rate of inflation, an irrational upward trajectory eerily reminiscent of skyrocketing housing prices in the years before 2008. … Throw off the mystery and what you’ll uncover is a shameful and oppressive outrage that for years now has been systematically perpetrated against a generation of young adults.” Taibbi says the federal government is poised to make $185 billion over the next 10 years on student loans, with no way out for the young borrowers: “Even gamblers can declare bankruptcy, but kids who enter into student loans will never, ever be able to get out of this debt.”

Transcript

The following is a rush transcript. Copy may not be in its final form.

AARON MATÉ: We begin today with student loans. When President Obama signed it into law this month, the Bipartisan Student Loan Certainty Act was hailed as a major victory for students. The bill reversed a temporary doubling of the interest rate on federally subsidized Stafford student loans that took effect in July. Most students will pay a low rate of around 3.8 percent through 2015 but then see that rate jump as it becomes attached to financial markets. At the signing ceremony, President Obama praised Congress for reaching an agreement, but he warned the temporary fix in rates doesn’t address the underlying problem: the massive cost of college tuition and the debt burden imposed on students and their families.

PRESIDENT BARACK OBAMA: Even though we’ve been able to stabilize the interest rates on student loans, our job is not done, because the cost of college remains extraordinarily high. It’s out of reach for a lot of folks. And for those who do end up attending college, the amount of debt that young people are coming out of school with is a huge burden on them. It’s a burden on their families. It makes it more difficult for them to buy a home. It makes them more difficult—more difficult for them if they want to start a business. It has a depressive effect on our economy overall, and we’ve got to do something about it.

AMY GOODMAN: President Obama speaking in the Oval Office earlier this month.

Well, our next guest has just written an in-depth  piece exploring the nation’s soaring education costs and their dangers. In the latest edition of  Rolling Stone, Matt Taibbi argues that the high price of college tuition and the federal expansion of student debt to pay for it pose a major threat to the economy, as Taibbi writes, quote, “The dirty secret of American higher education is that student-loan interest rates are almost irrelevant. It’s not the cost of the loan that’s the problem, it’s the principal—the appallingly high tuition costs that have been soaring at two to three times the rate of inflation, an irrational upward trajectory eerily reminiscent of skyrocketing housing prices in the years before 2008. … Throw off the mystery and what you’ll uncover is a shameful and oppressive outrage that for years now has been systematically perpetrated against a generation of young adults.” Matt Taibbi’s article is called “Ripping Off Young America: The College-Loan Scandal.” He’s a political reporter for  Rolling Stone.

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Matt Taibbi is a contributing editor for Rolling Stone. He’s the author of five books and a winner of the National Magazine Award for commentary. Please direct all media requests to taibbimedia@yahoo.com  Matt is an OUR COMMON GROUND Voice

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Matt Taibbi: Geithner is ‘the architect of too big to fail’

Taibbi: Geithner is ‘the architect of too big to fail’

By Arturo Garcia
Saturday, January 12, 2013 18:03 EST

 
Matt Taibbi on Democracy Now 011113
The legacy of outgoing U.S. Treasury Secretary Tim Geithner will be simple, said Rolling Stone contributing editor Matt Taibbi on Friday — and unflattering.

“He’s the architect of “too big to fail,” Taibbi told Democracy Now hosts Amy Goodman and Juan Gonzalez. ” When this all blows up — and it’s going to blow up, for sure, because things can’t continue the way they are right now — people are going to look back in history, and they’re going to say, “Who was to blame for this?” And Timothy Geithner is going to be the guy who designed this entire system.”

That picture is quite different from the one President Barack Obama painted in his sendoff to Geithner on Thursday, when he said that the history books would portray him as “one of our finest secretaries of the Treasury.” Geithner will be succeeded by Obama’s chief of staff, Jack Lew, a choice Taibbi described as a signal that the White House intends to keep bailing Wall Street out.

Author and former financial regulator William Black also criticized Geithner, saying he “created crony capitalism, American style” and helped develop regulations that will not prevent further financial trouble for the country. He also scoffed atthe recent deal made by 10 major mortgage-lenders that will include $3.5 billion in payments to almost 4 million homeowners.

“The rest of the supposed $5 billion in settlement is really just what in the commercial world we call ‘troubled debt restructurings,’ which are the things you would do anyway if the government didn’t exist, because in most cases it’s better for the bank not to have the default, to instead reduce the principal slightly,” said Black. “So, none of that is actually a bailout. None of it is actually a settlement. It’s just the banks doing that which will profit maximize for the banks anyway.”

Watch Taibbi and Black discuss Geithner’s legacy and the issues behind the government’s Wall Street bailout, originally aired on January 11, 2013, below.
Raw Story (http://s.tt/1ym7E)

Matt Taibbi  is Rolling Stone contributing editor, and  is an OUR COMMON GROUND Voice

July 9, 2009  Matt Taibbi, Author and Journalist, Rolling Stone Magazine on OUR COMMON GROUND with Janice Graham

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