Student Loans Accused Of ‘Helping Trump Destroy American Democracy’
An article republished by Salon Monday argues student loan providers and education secretary Betsy DeVos are committing “economic terrorism” and that student loans are “helping Trump destroy american [sic] democracy.”
Journalist Binta Baxter alleges that the student loan system is designed to redistribute money “from everyday Americans to the elite.” The article, which was originally published in late June on Alternet, hit the larger progressive outlet Monday.
“Student loan servicers are engaged in economic terrorism, and DeVos is only making it worse,” says Baxter.
“Contrary to what most students believe, many loans supposedly from the U.S. Department of Education are actually owned by big private banks,” continues the author. “Similar to the mortgage crisis, many borrowers were unaware that their federal student loans had been securitized and sold to big banks.”
Baxter cites scholar Noam Chomsky, who argued that anxiety caused by debt makes people fearful of fighting the system. The journalist likens this fear to terrorism and cites the struggle one couple, whom she names only as Kevin and Denise, are having with the student loan system.
Kevin told Baxter that Denise’s student debt of about $35,000 grew to over $75,000 in fewer than 10 years after her graduation from the University of Arizona. The student loan provider raised Denise’s debt via interest rates and loan fees when the graduate could not meet their monthly payment, according to Kevin, who alleges that the monthly payment was three times Denise’s rent.
“Even after I used my savings to help pay off the remainder of her student debt, the loan servicer, Navient, kept refusing to credit her account for the payment and continues to damage her credit,” said Kevin to Baxter. “This should be criminal. They’re just awful, awful human beings.”
Baxter argues that DeVos is making matters tougher for debtors by allowing companies to charge them fees totaling 16 percent of their owed amount, according to a decision reported by Bloomberg.
“The Republican Party often campaigns on being the morally superior party based on its stance on issues like abortion and contraception,” says the journalist. “However, the student loan industry’s pillaging of the next generation of Americans has been met with deafening silence by the GOP.”
Americans cannot take legal action to obtain reprieve from what Baxter implies are predatory practices by student loan providers because these companies “have the backing of federal agencies,” Baxter asserted to The Daily Caller News Foundation.
“Betsy DeVos was financially invested in student loan companies prior to becoming Secretary of Education,” said the author to TheDCNF. “It’s hardly a coincidence that she has taken multiple positions that benefit student loan companies to the detriment of American citizens.”
“Secretary DeVos is working to make higher education more accessible for all students,” Liz Hill, press secretary for the Department of Education, told TheDCNF. “The president’s budget streamlines loan programs, consolidating five existing and duplicative repayment plans into one. It also expands the use of income-driven repayment options to help student’s pay back their loans successfully.”
Hill explained that the Department of Education hopes to improve customer service for loan payments, but also noted that DeVos hopes to strike up a conversation surrounding education.
“For too long students have been told that the only path to success is a 4-year degree, and that’s just not the case–particularly when there are 6 million unfilled jobs in America right now,” said Hill to TheDCNF. “The Secretary is looking forward to working with a Congress to modernize HEA for the 21st Century and ensure students have access to multiple pathways to higher education.”
“What defines this crisis is not the desire to pursue higher education, but instead the loan system American citizens are forced to endure in the process of that pursuit,” said Baxter to TheDCNF. The author stated that the average cost of 4-year tuition at a public college has risen from $2,499 in 1971 to $9,420 in 2015, according to figures from the United States Census Bureau and The College Board.
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