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The New Student Loan System: How Screwed Are We? [UPDATED]

"The word bipartisan means some larger-than-usual deception is being carried out." — George Carlin

To great establishment fanfare, the Bipartisan Student Loan Certainty Act has now passed both Houses of Congress, and should be signed by President Obama shortly. [UPDATE 1: President Obama has signed the bill.] This new law changes the previous regime of fixed interest rates and allows them to float — to a certain degree.

Now, the interest rate on your student loan will be set at whatever the 10-Year Treasury bill rate is, plus a fixed percentage. Here's the percentage breakdown, with the caps on how high the interest rate can get:

 Type of Loan Previous Rate New Rate Cap
Undergrad Stafford subsidized 3.4% (6.8% as of July 1) T-bill + 2.05% 8.25%
Undergrad Stafford unsubsidized 6.8% T-bill + 2.05% 8.25%
Grad Stafford 6.8% T-bill + 3.6% 9.5%
GradPLUS/Parent 7.9% T-bill + 4.6% 10.5%

You'll remember the great wailing and gnashing of teeth around the July 1 rate hike, particularly on the liberal/progressive side of the debate, when the 3.4% interest rate expired. It was a very similar to the wailing and gnashing of a year before, when the 3.4% rate was originally scheduled to expire. But because 2012 was an election year, we saw a very different outcome: both Obama and Romney came out in favor of extending the interest rate another year, and it passed both houses easily.

This year, without the pressures of a Presidential campaign, Congress let July 1 come and go without a fix. Given how malleable deadlines are with a legislative body that can pass laws with retroactive effect, as they did in this case, apocalyptic cut-off dates seem to have much more to do with public perception of lawmaking than with lawmaking itself.

Based on how low the T-bill rate is now, that means undergrads get a halfway decent deal this year: 3.86%, only slightly up from where it was before July 1st. However, there's a problem. The T-bill rate is not just low, it's historically, ludicrously low. The yearly average T-bill rate for the past two years has been so low that you'd have to go back to 1941 to find another that low. That means that the 3.86% rate will be gone very soon: according to rough CBO estimates, we could very likely see T-bill rates of 5.2% in 2017, which would bump up the interest rate of undergrad loans to a painful 7.4%.

While past results are no guarantee of future performance, it is the best benchmark we can go by. I've pulled together these stats, along with what the average student loan interest rate would have been over the past 20 and 30 years, had the new law been in effect then. The results aren't pretty (see the infographic below).

17 of the most reliably progressive and pro-student members of the Senate voted against the bill, along with 25 mostly progressive Democrats and 6 Republicans in the House. It makes one wonder why progressive student-oriented groups like Generation Progress (formerly Campus Progress) and Rock the Vote pushed so hard for the passage of a bill that 1) will make the student loan crisis worse, 2) will do nothing to help those straining under the $1.2 trillion in debt already out there, and 3) was hailed by Speaker Boehner as "almost identical" to what the House GOP wanted.

Perhaps it's because they're not democratically accountable to actual students? The United States Student Association's newly elected President, Sophia Zaman, has come out very publicly against it. [UPDATE 2: Kalwis Lo, Leg Director for USSA, co-penned a favorable statement about the bill's passing, in an apparent reversal of position. I imagine there's an interesting story behind this move.]

Some say that this is just a temporary stopgap, meant to help students now but will be fixed soon (some say as soon as this fall, when the Higher Education Act is up for renewal). Do we really need to remind these folks of the "pass it now, fix it later" slogan used to get progressives behind the Affordable Care Act? As Jon Walker put it:

Inertia is an overwhelming force in Washington. Things rarely get improved later even when politicians say improvement is needed. That is why it is so important to fight to get the design right to begin with, or we end of living with the design flaws for a very long time.

Student loan debt infographic

Janet Napolitano: a militarized president for a militarized university

The Department of Homeland Security is a cabinet-level department with a budget in the tens of billions of dollars, and fills the role of the Defense Department's domestic counterpart: while DoD sends tanks and guns to Baghdad, Kabul, Tel Aviv, and Seoul, DHS sends tanks and guns to Detroit, Chicago, Washington DC, and Los Angeles. One of DHS' primary roles is the militarization of police departments across the country, through a combination of terrorism-related training programs and cheap military surplus hardware (everything from high-powered rifles to armored personnel carriers and tanks).

This militarization has resulted in more deaths and injuries at the hands of police as response to crimes and disturbances escalates dramatically. It has also meant a windfall for defense contractors as they expand their range of domestic offerings, including unmanned aerial drones.

Today we learned that current Secretary of Homeland Security Janet Napolitano will be tapped as the new President of the University of California system. In many ways, the UC red carpet has long been rolled out for her: the militarization of campuses against their own students (which has reached a new crescendo since OccupyCA, OWS, and the infamous pepper-spraying incident at UC Davis) the expansion of government and military contracts, and the ever-growing size of the administrative bureaucracy means that she'll likely find her new digs pretty familiar. As the LA Times put it:

Napolitano’s nomination by a committee of UC regents came after a secretive process that insiders said focused on her early as a high-profile, although untraditional, candidate who has led large public agencies and shown a strong interest in improving education.

UC officials believe that her Cabinet experiences –- which include helping to lead responses to hurricanes and tornadoes and overseeing some anti-terrorism measures -- will help UC administer its federal energy and nuclear weapons labs and aid its federally funded research in medicine and other areas.

What the Times doesn't mention is that some of those federal agency dollars are coming right from DHS itself.

We can't glean much about Napolitano's educational priorities beyond her tenure as governor of Arizona from 2003-2009.

During her time as governor, tuition at ASU went up 58%, much higher than the average 4-year public university's increase of 19% over that same period. (That being said, once Secretary of State Jan Brewer took over after Napolitano's DHS apppointment, tuition increases only got worse.)

While her appointments to the Arizona Board of Regents include the first Native American to the Board (LuAnn Leonard), they also include Dennis Deconcini and Anne Mariucci. Deconcini is a high-powered lobbyist, whose firm has the distinction (aside from representing such good citizens as Monsanto, Eli-Lilly, Pfizer, and the MPAA) of owning the domain LobbyCongress.com. Mariucci was head of Del Webb Corporation, a giant firm that builds retirement homes across the country, and later got into the private equity business. In 2011 she joined the Board of Directors of the Corrections Corporation of America. CCA, naturally, has spent millions lobbying DHS.

As Democratic governor in a state with a solidly Republican legislature and little worry about having to sign actual progressive legislation, Napolitano certainly talked a decent game. In 2008 she said she wanted to freeze tuition for in-state students, and guarantee a free ride to any Arizona student with at least a B average through high school (and a clean disciplinary record — problematic due to the racist and abelist discipline systems in most public high schools).

While Mark Yudof's tenure as current UC President is thankfully very nearly over, Napolitano's selection reinforces how tough the road ahead will be for student organizers. Her selection is in some ways a defensive response by the Regents against the pressures they face, both from Sacramento and from the very people who make up the University of California — the students, faculty, and staff. If she can manage to on the one hand get the legislature to widen the gates of privatization, and on the other squash insurgent activism on UC campuses, it will be a dream come true for the Regents. Thankfully, there are plenty of committed and organized Californians who stand in their way.

EDIT: Updated to reflect her position as President, not Chancellor. Thanks katminka!

Student Power: Policy Recommendations

Look, anyone who reads this blog (or follows me on Twitter, hint hint) knows I'm not a big fan of diverting organizing capacity toward legislative vehicles, let alone elections. We can't legislate or elect our way to a more democratic society, nor to a stronger student and youth movement.

That being said, there are a myriad of policy changes that can happen on the state level that can make the lives of student organizers much easier. I'm leaving off the "abolish all tuition and fees" and "hand all decision-making power over to general assemblies" kind of policies, because they're both obvious to us and entirely off the table for legislatures at this point.

There's a middle ground, however, of policy changes that can help us do our jobs better that aren't completely outside the current realm of possibility. A lot of these regulations can and should be applied to private universities as well — while they're not formally public entities, states already have reams of regulations private schools must adhere to, as conditions attached to either funding or certification. And depending on the state, some of these recs can be done at a regulatory level and don't even need the legislature's approval.


  • Publicly available, detailed budgets for all private and public institutions
    The best that most students can hope for in both private and public universities is a vague, unhelpful summary of revenue and expenses. Getting a firm handle on university finance is important

  • Publicly available vendor contracts
    Usually vendor contracts are set up by their own terms to be confidential, only state law can override those clauses and mandate public access.

  • Publicly available reports of endowment investments
    Key for investment/divestment campaigns, along with sniffing out conflicts of interest among trustees.

  • All trustee and regent meetings for all private and public institutions held publicly
    Pretty straightforward.


  • Authorize university employee and graduate student unions
    Also straightforward. Though we've seen recently how quickly legislators can roll back these rights — there is no substitute for an active and militant university union movement.

  • Mandate all student activity fees are exclusively under student control
    Universities love to give students control over their own activity fees, until students start doing something actually interesting with them. Mandating that a democratic, student-run organization such as a student government/association/union has final say over the use of those funds would ensure a potentially powerful asset in organizing campaigns.

  • Treat students like human beings
    That could be in the form of a state-based DREAM Act, Good Samaritan rules to allow students to safely get medical attention to someone who's overdosed or blacked out, abolishing the use of "free speech zones" that restrict student activity to a few square feet, etc.

  • Strict restrictions limiting campus safety/police use of lethal and “less-than-lethal” weapons
    One of the biggest differences between student protest now and in the 60s is the obscene level of police violence activists are subjected to today. It's a huge hamstring to any productive confrontation with campus administration.

  • Strict restrictions of campus safety/police activity during protests, occupations, and sit-ins
    Same as above.

  • Popular elections of trustee/regent boards
    This is a bit of the more "out there" proposals, but there are thankfully many examples of constituent representation on university boards — student and faculty reps on boards aren't a totally new idea. As a result, expanding their presence, even if not to 100%, is a lighter lift than it would otherwise be.


  • Guaranteed funding streams for universities with automatic increases each year
    Legislatures in many states can set automatic funding for programs, without having to reauthorize it in every budget. There's no magic bullet that fixes higher ed without greatly increasing state (and Federal) allocation to it.

  • Ban the siloing of funds from academic or research profits
    There are huge profit centers at universities, especially public research schools like UCLA, that are contractually required to keep their profits in-program. This is especially evident with biotech and defense firm research projects — profits and royalties that those programs get above and beyond their operating costs can't be redirected into needier programs.

  • Deprioritize new facility construction
    Universities are taking out massive loans on new construction projects, many of them little more than vanity projects to recruit more affluent students, while ignoring the funding needs of actually teaching students. That debt is driving many of the fiscal crunches we're seeing at schools across the country. The best policy to deal with this would likely vary from state to state.

  • Bar any state scholarships from being used at non-public universities
    State scholarship money should go to students who go to state schools. Most of us realize the problem with voucher schemes at the K-12 level — state scholarships to private universities are essentially the higher ed equivalent. And given the lower price of state universities and community colleges, states are getting more graduates for the buck.

  • Establish a system for states to directly lend to students on more favorable interest and forgiveness terms than Federally-subsidized loans
    There are already campaigns across the country to set up state banks like the lone Bank of North Dakota. Offering very low-interest student loans with generous deferment/discharge options would be a pretty straightforward prospect for a state. They could even use it to keep graduates from moving elsewhere, promising lower interest rates or partial/complete forgiveness if students live and work in-state for x years.

What other policies did I miss? Hate that I've now become a bourgeois reformist sellout? Head to the comments!

A few thoughts on the Cooper Union occupation.


Cooper Union's current student occupation is as unique as the institution itself.

What started 20 (!) days ago as a sit-in protest against CU's impending tuition has now morphed into something entirely different. The very first day of the occupation, the administration threatened to arrest — and possibly expel — any students who did not leave that evening. Students called their bluff, and the big wigs blinked. Now occupiers have been calling the president's office home for more than two weeks straight, complete with delivery meals paid for by supporters, a frequent stream of guest speakers from around town, and even a chocolate cake created in the likeness of the CU's administration building.

Students in the President's office.

Saar Shemesh at {young}ist has a fascinating first-hand look into the nuts and bolts of the occupation:

On May 8 we began to hold the office space, exclaiming that it was “no longer the Office of the President, but an Office for Over 100 Presidents from the Cooper Community.” We chose to occupy the president’s office to show how we could make the space function for the institution better than had Bharucha – literally taking hold of the hub of the administration at Cooper.

I can't emphasize enough what a colossal blunder President Barucha and the Board of Trustees have made in not kicking the students out. They've abandoned one of the most strategic and symbolic spaces on CU's campus, and are seemingly at a loss as to what to do. They clearly didn't learn the lessons that the New School and NYU administrations learned from their occupations several years ago. As told by the New York Times:

Dr. Bharucha has been operating a government in exile from his home and other offices, doing what he can with e-mail and cellphones. “They have a tremendous amount of passion for Cooper,” he said diplomatically, “so this reflects a very understandable expression of their passion and frustration.” As for how long he was prepared to wait the students out, he said only, “We’re taking it one day at a time.”

And so, with a combination of administration incompetence and student confidence, we arrive at a rather unique situation. Barucha and friends have been back on their heels from the start of the occupation, and at this point they're just hoping they can wait the students out. All the students have to do at this point is give just a small push, and the administration will be down for the count.

Maybe the push is setting up a new, popularly elected Board of Trustees, and keeping the old Board from performing any function beyond disbanding itself. Maybe it's replacing all top administrative staff with elected and recallable faculty and student committees. Maybe it's establishing a student/staff/faculty General Assembly as the supreme decision-making body at Cooper, with veto power over all administration decisions.

The push could take any number of forms, but they would all stem from this fundamental understanding: students are now in charge of The Cooper Union. The President and the Board of Trustees are disliked, if not despised, by almost everyone. The President's office — the Winter Palace of any university — has been stormed and taken. Faculty and students are voting "no confidence" in Barucha in huge numbers, and student organizers should have an absolute majority of all students very soon, if they haven't already.

The central argument on which all university administrations base their legitimacy is a very simple. It boils down to:

There is no alternative. You students and professors could not run things as well as we can, certainly not if you waste all that time and energy running things democratically.

It's an argument that gets decimated on a fairly regular basis, and this time it's Cooper's turn. An administration who cast as one of its central revenue sources "expanded alumni donation" has managed to piss off and alienate just about every present, past, and future student. A President who is supposed to unify and cohere the institution pulls off the opposite, pitting arts and engineering departments against each other, and can't even be bothered to do a real Q&A with students (simply hiding behind pre-written questions on notecards). And, as a microcosm of all that's wrong with Wall Street, wealthy CU Trustees who have no real stake in the future of the school are given complete unaccountable control over hundreds of millions in Cooper's investments and property, and proceed to run it into the ground with absolutely zero consequence to themselves.

As one student occupier suggested, "maybe we don’t need a president at all." A truly democratic institution? For many universities, that's still a far-off dream. But for Cooper Union, for at least this moment, all that is needed is to reach out and take it.

Keep up-to-date on the latest by following Free Cooper Union on Twitter and Facebook.

Suppose they formed a Party and everyone came? (and other fantasies)

Thoughts on Bhaskar Sunkara's "Fellow Travelers" in the latest Jacobin.

Roughly 50% of small businesses close shop in their first five years. While not attracting enough customers is a death sentence for a business, not attracting enough members sadly does not have the same effect on leftist parties. They shamble on, zombie-like, hollowed out yet still adorned with the ambitious banners that swaddled their birth. Or maybe they're better described as so much detritus on the forest floor, choking off the green sprouts of their successors, waiting for a cleansing brushfire that never comes. In any case, what doesn't describe them well is anything approaching "successful."

Which is why I was somewhat surprised to see Jacobin founder Bhaskar Sunkara trod down this worn path so enthusiastically in his latest essay, "Fellow Travelers." Go read it if you haven't.

The allure of a kind of Grand Unified Theory for the left is as old as the left itself. Depending on your predilection, it might take the form of One Big Union, or the One True Worker's Party, or the One True Organization That Looks Like a Party But Totally Isn't, You Guys. Sunkara actually describes the problems of the sect-ridden left quite well:

But it’s impossible to deny that institutionally the socialist left is in disarray, fragmented into a million different groupings, many of them with essentially the same politics. It’s an environment that breeds the narcissism of small differences. In a powerless movement, the stakes aren’t high enough to make people work together and the structures aren’t in place to facilitate substantive debate.

It's a good point, and one that would cause most members of those million groupings to nod vigorously. Because, of course, everyone reading it assumes that their organization is the one that everyone else should come to their senses and join. He continues,

It’s finally time to make a call for joint action on the Left with an eye towards the unification of the many socialist organizations with similar political orientations into one larger body. This idea has been trotted out for generations, but new agents and desperate necessity can finally make it a reality.

Trotted out! I see what you did there, Bhaskar. Indeed, the ISO's Socialist Worker has published one variation or another of this theme in a fairly continuous stream since their first issue. But the biggest issue I have is that the last sentence in the above quote should really be what the entire essay is about. In what way is it finally time that's different from previous times? For those who already think we need one more go at it, this essay doesn't break new ground. For those who are skeptical, it doesn't offer any explanation why it might now play out any differently.

An additional wrinkle is that many existing socialist organizations don't seem the least bit amenable to the kind of "non-sectarian organizing under the auspices of an overarching democratic structure" that Sunkara hopes for. There is no compelling reason why socialists will suddenly stop splitting over irrelevant crap; the absence of the USSR has certainly helped in that regard, but that's nothing new.

I'm skeptical that socialist groupings will play well together — let alone merge — when their higher-ups can't even manage to do well by their own members. The UK's biggest revolutionary socialist group, the Socialist Worker's Party, has virtually imploded due to their (democratically centralized) leadership's utterly incompetent and disgusting reaction to charges of rape and sexual assault laid against one of the Party officials. The fact that the party's head, in the face of accusations of cronyism and unaccountability, pens a rebuttal titled "Is Leninism Finished?" speaks volumes.

Sunkara is dead on, however, when he critiques the left's insularity and lack of "social literacy to speak to a broader audience, a literacy that comes with a grounding in practical politics." Though the best innovations in approachable left outreach and framing don't ever seem to come from the usual socialist suspects. In the bubbling cauldron of improvisation that epitomized the best of Occupy Wall Street and its satellite movements, the best signs weren't the ones printed in all-caps, typeset in Impact and produced by the hundreds (I noticed that those were almost always the first to clog nearby garbage cans). The simplistic yet memorable class war slogans based on "We are the 99%" always drew more interest and attention than "Marx is Back!" or clumsy "do x, not y" formulations like "Jail Wall Street Bankers, not Jobless Youth" (often with a last-minute Free Mumia and/or Palestine addendum to round things out). Traditional socialist groupings were caught just as off-guard and flat-footed by the popularity of OWS as their Québécois counterparts were by the red felt festooned printemps érable.

Sunkara's bookend for this essay is a metaphor of leftist sectarian as subway masturbator. To put it lightly, there were better metaphors to pick from, ones that don't merit a trigger warning just to get one's point across. For example: here in Boston we get our share of itinerant preachers on the T, shouting the Good News. They annoy everyone, including those with the same faith, and thankfully they eventually move on to the next car after a few stops. That'd be a good metaphor for the sectarian left, brandishing not a bible but What is to Be Done, or Quotations from Chairman Mao. The vast majority of men who masturbate in public aren't modern day Lennie Smalls, mentally incapable simpletons over whom we can just look at each other and smile knowingly when they do something inappropriate. They're predators, and should be treated as such. They're people whom everyone, but especially the left, should aggressively oppose and confront. It may seem to some like a small quibble (if so, fuck you), but as I think Sunkara would agree, words matter.

(And by the way, a Left Forum even half the size, scope, and fun of Comic Con would be a huge win for the left, if only to see the inevitable Žižek cosplayers.)

Student Power in San Jose: Here's how you can join us at NN13

This year's Netroots Nation in San Jose will be a meeting point not just for the larger progressive community, but student activists and organizers from all across the country, too. Here's how you can swing a free registration and a free hotel room, thanks to the Democracy For America scholarship program. They want students to apply. I want students to apply. So apply already!

Here's DFA's own Alex Showerman with the details:

This will be my first Netroots Nation and I could not be more excited to go! Before I made the progressive movement my career and was a passionate activist in my free time, I had always wanted to go to Netroots Nation. I was drawn by the chance to attend the panels, see the big name speakers, attend the trainings, and most importantly meet fellow activists to take my involvement to the next level. Unfortunately, as a broke college student and young professional, I simply didn’t have the extra cash to go.

Here at DFA, we believe that progressive activists should not be discouraged from attending Netroots Nation because of cost, just as I was. That’s why as a major sponsor of Netroots Nation DFA will foot the bill for rising stars in the progressive movement to join us in San Jose. Developing the next generation of the progressive activists has always been a core value of DFA, and we view attending Netroots Nation as your launch pad!

Past scholars include folks who have successfully run for state office, prominent gun violence prevention activists, radio personalities, and well-known bloggers. This could be your chance to attend Netroots Nation and make the connections you need to take your activism to the next level. Here’s what you do right now:

    • Apply! If you have always wanted to go to Netroots, but don’t have the spare cash, this could be your opportunity!

    • Nominate somebody who you think deserves to go, they’ll be flattered.

    • Most of all, vote for the activists you think are most deserving.


Good luck and we look forward to seeing you in San Jose!

Alex Showerman, New Media Manager 
Alex joined Democracy for America in the summer of 2012, after serving as the Deputy Director of Digital Media for the Tim Kaine Campaign in Virginia. Previously, he worked in Chicago as an organizer for Congresswoman Schakowsky’s campaign and found inspiration in the influence of grassroots organizing on elections. After the congresswoman’s win, he moved to Washington, DC where he spent a year and a half on Capitol Hill running the constituent correspondence program and conducting legislative research.

Student Gov't Culture: Vote for Us, Now Shut Up

Ah, student government: that perennial stepping stone for proto-politicians and safety valve against student activism. While each campus' particular iteration is different, student government culture is surprisingly consistent across the country.

Disdain, in one form or another, for their fellow students can be found among SGA members at universities big and small. At first glance that seems curious: given the ratio of voters to elected officials, the numbers suggest that they should be some of our most democratic, responsive institutions. The size of a Congressional House district is roughly 700,000 people. In comparison, the largest public university in the U.S. (Arizona State University) has barely over 60,000 students.

This disdain manifests itself in many ways. Often we'll hear it when SGA members complain about perpetually low voter turnout and "student apathy." Other times it presents as a startling suspicion and paranoia. For example, a year ago the student government at Harvard Law School actually debated whether to make its own budget available to the student body (they chose not to):

In a general meeting on Wednesday night, Student Government tabled a discussion about disclosing its own budget to the public so that members could have more time to create and review samples of what such disclosure would look like. Some student government members expressed concerns that such disclosure would subject Student Government to unfair scrutiny even though student government operated “leanly.” Other student government members said they would welcome the additional feedback such disclosure would invite. One said that transparency was a “question of principle.” In addition, many members agreed that there was not a “groundswell” among the general student body for disclosure, there was only one request for such disclosure in the last year. One member said that no other student organization discloses its budget, and it would be troublesome to provide a list of numbers without obtainable numbers on attendance or other such details.

That someone in student government thinks that showing what they do with student activity fee dollars would invite scrutiny they consider "unfair" is reason enough for anyone to demand to see the numbers. But such anti-democratic tendencies aren't limited to the Ivies, either.

At Emory University in Atlanta, there's a growing furor against its current President, James Wagner (here's a good recap). As the faculty prepares a vote of no-confidence, some SGA members wanted to include a confidence question on the ballot for their next student elections. The original text, reading "Do you have confidence in President James Wagner?" was modified to a more general "Do you have confidence in the direction of the University?" — but even that wasn't enough to garner a majority of SGA members.

The university's student newspaper, The Emory Wheel, reports the reason why:

Much of the opposition to the bill was rendered by undergraduate members of SGA, who claimed that the student body is not well informed enough to make a responsible decision.

This, of course, leads to an interesting question. If it is unacceptable for students to register how they feel about the direction of their own University — in a non-binding vote, essentially an opinion poll — how in the world is it acceptable for those same students to fill out the rest of the election ballot, which is full of choices that have actual consequences?

Elitist, anti-democratic attitudes among SGA members need to be demolished, destroyed, obliterated, and other fancy words for "blown up" — students already get more than enough patronizing condescension from faculty and administrators. The closest thing to a surefire method is introducing directly democratic and participatory structures and processes.

Student Loan Debt: The Really F*cking Scary Number Hidden in the NY Fed Report

There's been quite a bit of chatter about the latest report on student loan debt out by the New York Federal Reserve Board. You can check out a PDF of the findings here. All the bad numbers are up: the total amount of student loan debt, the number of students taking out loans, and the number of those who have stopped repayment. But there's one figure that I haven't seen many people in the news really highlight, and it's the scariest. It's also buried in the second half of the report.

First off, the expected bad news:

Everyone across age groups now has significantly more student loan debt

Chart of total student loan balances by age group


Student loan debt is the only kind of debt that's consistently increased during the recession:

Chart of student loan debt vs other debt


There are a ton more borrowers, and the amount they're borrowing has leaped as well:

Chart of student loan borrowers and balance per borrower


Now here comes the truly scary part you've been waiting for. Below is a pie chart of those who have student loans, and what their repayment status is.

Chart of student loan borrower repayment status delinquent

At first glance, the percentage of those with delinquent balances seems pretty bad — 17%, one in six — but not the end of the world. But as the report casually mentions later in the report, this chart is deceptive in that it includes people who are not expected to make a monthly payment: either they're in school, or have a deferment or forbearance. So if we take those people out of the equation (the blue and purple slices), that modest 17% becomes a gigantic 30%! Join me in the next paragraph, as I reiterate this for dramatic effect.


The Fed didn't create a pie chart highlighting this, so I went ahead and made one, because this is the number that shows how unsustainable our current system is. With other forms of debt, it's easy to see the breaking point: look at the bankruptcies. However, since Congress loves its Wall Street benefactors so much, student loan debt is (with very few exceptions) not dischargeable in bankruptcy. The 90+ day delinquency rate is the variable to watch for student debt.

Chart of student loan holders more than 90 days past due

Share this graphic on Facebook.

 If you haven't already begun organizing to wrench power away from those who are actively putting you in financial shackles, I reckon you ought to start.

The 2013 State of the Union Preview: Higher Ed

For Student Power will be covering the SOTU live, via Twitter and Facebook. Join in!

The annual State of the Union Address is a key aspect of the political spectacle of the modern Presidency. While the SOTU is actually a codified mandate in the U.S. Constitution, only in the 20th Century has it become a regular (and now annual) speech delivered to Congress — previously it had generally been a written document sent and read by a clerk. While the first broadcast SOTU was Calvin Coolidge's in 1923, via radio, the Address' central position in American political life was cemented with the first TV broadcast of Harry Truman's speech in 1947.

It's in these addresses that Presidents announce new policy goals, attempt to shore up public support, try out new narrative and rhetorical frames to shape the political landscape for the coming year, and in most cases, assiduously avoid going into detail.

When it comes to Higher Education, the U.S. Federal government plays a much more hands-off role than most other nations. Because Federal support of public higher education has always assumed state establishment, regulation, and control (starting with the Morrill Land-Grant Acts of 1862 and 1890), much of what can be done at the Federal level has to do with funding. What little rule-making is done is usually in the context of eligibility tests for funds (like the atrocious Solomon Amendment).

The usual suspects in Federal higher ed policy debates are loan and grant programs — Pell, Stafford, Perkins, PLUS, etc. Proposals often deal with them at one or both ends: how much the students get, and how much they have to pay back. While there is usually tweaking of the size of Pell grants or Stafford Loans, nobody expects them to approach the percentage of tuition cost that they once did. One modest improvement enacted in 2010 is that Pell grant increases are now automatic, and pegged to the rate of inflation + 1%. That being said, Pell grants are now limited to 12 full-time semesters (down from 18), and the maximum award of $5,500 will now only be automatically granted is your family income is below $23,000 (down from $30k). In addition, for graduate students, Stafford Loans will no longer be subsidized (i.e. accrued interest is no longer waived during your time in school or during deferment). Bad news for the students who need financial support the most.

However, the biggest policy shift over the past four years has been the expansion and refinement of the Income-Based Repayment Plan (IBR). For those who can enroll, IBR caps loan payments at a percentage of your income and forgives whatever's left on the loan after a certain number of years (notably this does not apply to private loans, which can be the harshest burdens of all). As of right now, for most with student loans, IBR is capped at 15% of your income over 25 years. Congress changed that, so starting in 2014 (and for a select few qualifying students, right now) the cap will be 10% of your income over 20 years.

One danger that looms on the horizon for higher ed is the potential importation of the horrendous corporate-style ed reform currently infecting K-12 policy across the country. Pushing universal standardized tests on all colleges was a dream of the Bush Administration, and similar moves are being attempted in at the state level. Be on the lookout for "accountability" being posited as a solution to every ill, from high tuition costs to low graduate employment. 

Since this site is called "For Student Power" after all, I feel obligated to point out that issues of power never, ever come up in higher ed policy, and certainly never in a rhetorical event like a SOTU — except in the shallowest of forms, consumer power. Sure, we all rolled our eyes when Mitt Romney told students to "shop around" as a solution to the tuition and debt crisis. But how much better is Obama's vision? "Shop around — and here's a coupon, too." The closest he ever got to tackling tuition itself was the hilariously backward idea that universities should lower their tuition or face a reduction in federal funds and subsidies: a kind of punishment one could very well imagine a vulture capitalist like Romney coming up with.

There are lots of policies Obama could propose that actually would improve students' lives and create capacity for greater power. For example, he could mandate that student activity fees must be exclusively under the control of student-elected and -governed bodies (a hard-fought right that has steadily eroded away over the past few decades). Hell, that'd even help him and his party at the polls, since student governments and their larger associations often do a ton of voter registration and GOTV.

As for what Obama will say tonight, we can only guess — but to help us make an educated one, below are the relevant SOTU passages about higher ed for the last four years:


Because of this plan, families who are struggling to pay tuition costs will receive a $2,500 tax credit for all four years of college. 

In the wake of war and depression, the GI Bill sent a generation to college and created the largest middle-class in history.

And half of the students who begin college never finish.

This is a prescription for economic decline, because we know the countries that out-teach us today will out-compete us tomorrow.  That is why it will be the goal of this administration to ensure that every child has access to a complete and competitive education – from the day they are born to the day they begin a career.

We have made college affordable for nearly seven million more students.

And so tonight, I ask every American to commit to at least one year or more of higher education or career training.  This can be community college or a four-year school; vocational training or an apprenticeship.  But whatever the training may be, every American will need to get more than a high school diploma.  And dropping out of high school is no longer an option.  It’s not just quitting on yourself, it’s quitting on your country – and this country needs and values the talents of every American.  That is why we will provide the support necessary for you to complete college and meet a new goal:  by 2020, America will once again have the highest proportion of college graduates in the world.

I know that the price of tuition is higher than ever, which is why if you are willing to volunteer in your neighborhood or give back to your community or serve your country, we will make sure that you can afford a higher education.  And to encourage a renewed spirit of national service for this and future generations, I ask this Congress to send me the bipartisan legislation that bears the name of Senator Orrin Hatch as well as an American who has never stopped asking what he can do for his country – Senator Edward Kennedy.


Still, in this economy, a high school diploma no longer guarantees a good job. I urge the Senate to follow the House and pass a bill that will revitalize our community colleges, which are a career pathway to the children of so many working families. To make college more affordable, this bill will finally end the unwarranted taxpayer-subsidies that go to banks for student loans. Instead, let’s take that money and give families a $10,000 tax credit for four years of college and increase Pell Grants. And let’s tell another one million students that when they graduate, they will be required to pay only ten percent of their income on student loans, and all of their debt will be forgiven after twenty years – and forgiven after ten years if they choose a career in public service. Because in the United States of America, no one should go broke because they chose to go to college. And it’s time for colleges and universities to get serious about cutting their own costs – because they too have a responsibility to help solve this problem.


America has fallen to 9th in the proportion of young people with a college degree. And so the question is whether all of us – as citizens, and as parents – are willing to do what’s necessary to give every child a chance to succeed.

Of course, the education race doesn’t end with a high school diploma. To compete, higher education must be within reach of every American. That’s why we’ve ended the unwarranted taxpayer subsidies that went to banks, and used the savings to make college affordable for millions of students. And this year, I ask Congress to go further, and make permanent our tuition tax credit – worth $10,000 for four years of college.

Because people need to be able to train for new jobs and careers in today’s fast-changing economy, we are also revitalizing America’s community colleges. Last month, I saw the promise of these schools at Forsyth Tech in North Carolina. Many of the students there used to work in the surrounding factories that have since left town. One mother of two, a woman named Kathy Proctor, had worked in the furniture industry since she was 18 years old. And she told me she’s earning her degree in biotechnology now, at 55 years old, not just because the furniture jobs are gone, but because she wants to inspire her children to pursue their dreams too. As Kathy said, “I hope it tells them to never give up.”

If we take these steps – if we raise expectations for every child, and give them the best possible chance at an education, from the day they’re born until the last job they take – we will reach the goal I set two years ago: by the end of the decade, America will once again have the highest proportion of college graduates in the world.

One last point about education. Today, there are hundreds of thousands of students excelling in our schools who are not American citizens. Some are the children of undocumented workers, who had nothing to do with the actions of their parents. They grew up as Americans and pledge allegiance to our flag, and yet live every day with the threat of deportation. Others come here from abroad to study in our colleges and universities. But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense.

Starting this year, no American will be forbidden from serving the country they love because of who they love. And with that change, I call on all of our college campuses to open their doors to our military recruiters and the ROTC.


Jackie Bray is a single mom from North Carolina who was laid off from her job as a mechanic. Then Siemens opened a gas turbine factory in Charlotte, and formed a partnership with Central Piedmont Community College. The company helped the college design courses in laser and robotics training. It paid Jackie’s tuition, then hired her to help operate their plant.

I want every American looking for work to have the same opportunity as Jackie did. Join me in a national commitment to train 2 million Americans with skills that will lead directly to a job. My administration has already lined up more companies that want to help. Model partnerships between businesses like Siemens and community colleges in places like Charlotte, and Orlando, and Louisville are up and running. Now you need to give more community colleges the resources they need to become community career centers -– places that teach people skills that businesses are looking for right now, from data management to high-tech manufacturing.

When kids do graduate, the most daunting challenge can be the cost of college. At a time when Americans owe more in tuition debt than credit card debt, this Congress needs to stop the interest rates on student loans from doubling in July.

Extend the tuition tax credit we started that saves millions of middle-class families thousands of dollars, and give more young people the chance to earn their way through college by doubling the number of work-study jobs in the next five years.

Of course, it’s not enough for us to increase student aid. We can’t just keep subsidizing skyrocketing tuition; we’ll run out of money. States also need to do their part, by making higher education a higher priority in their budgets. And colleges and universities have to do their part by working to keep costs down.

Recently, I spoke with a group of college presidents who’ve done just that. Some schools redesign courses to help students finish more quickly. Some use better technology. The point is, it’s possible. So let me put colleges and universities on notice: If you can’t stop tuition from going up, the funding you get from taxpayers will go down. Higher education can’t be a luxury -– it is an economic imperative that every family in America should be able to afford.

Let’s also remember that hundreds of thousands of talented, hardworking students in this country face another challenge: the fact that they aren’t yet American citizens.

For Student Power will be covering the SOTU live, via Twitter and Facebook. Join in!

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