Take It As Red

"Blogging is, by its very nature, erratic and irregular, feverish effort punctuated by random silence, a conundrum wrapped in a contradiction wrapped in a mystery wrapped in an unclosed em tag. " - The Poor Man

Thursday, March 10


Get 'em While They're Young, and They'll Be In Bondage Forever

I've been reading the summary of the new US Bankrupcy legislation ( thanks to Rude Pundit for pointing to it) and, aside from the general everyday evil clauses* that allow credit card companies to own you and your labour forever, there is this:

(Sec. 1308) Instructs the Board to study and report to Congress on the impact that credit extensions to dependent students enrolled in postsecondary educational institutions have upon the rate of Federal bankruptcy cases.

What are the Rethugs (and tame Dems, like Leiberman and Biden) planning? You know it's nothing good. Now that Pell grants have been substantially reduced and look to be about to be removed entirely, students will have to rely either on minimum wage jobs or credit to pay tuition and living costs at university.

" A new formula for calculating eligibility for college financial aid will eliminate federal Pell Grants for up to 80,000 to 90,000 low-income students and will affect funding levels for up to 1 million others.

The change, announced by the U.S. Department of Education (DOE) Dec. 23, will also force other types of state and federal assistance to scale back their financial aid programs.

Besides those who will lose their Pell Grants completely, "we estimate about 1.3 million students will see reductions of $100 to $300 per year," said Terry Hartle, senior vice president of the American Council on Education, a trade association representing 2,000 public and private colleges and universities.

The Bush administration supports the new formula and estimates the federal government's savings at $300 million in the 2005-2006 academic year alone."

Only after graduation do students find that they are unable to pay back the debt, because even a college degree doesn't guarantee a living wage these days.

Comparison of selected US starting salaries (in US$):

Petroleum/Coal: $51,685, Computer Science: $51,429, Mechanical
Engineering: $48,654Accounting: $40,293, Civil Engineering: $40,280,
Economics/Finance: $40,047, Business Administration: $35,209, Rental/Lease
Services: $29,737, Liberal Arts: $28,667

= $ average 40,666, or approx 30,000 euro ,or in real money, 21,000 pounds.

Not exactly generous, and I note that the sciences are not included, or teaching, nursing and medicine or many other professions.

In the U.S., student loan debt is exempt from bankruptcy discharge for five years after a student leaves school. And according to commentators there has been an explosion in student debt in recent years:
"Student loan debt is 85 percent higher among recent college graduates who took on debt while attending public four-year colleges than among graduates from a decade ago. Recent graduates owed an average of $15,100 in 1999/2000, up from $8,200 in 1989/1990. Student loan debt increased by 55 percent among recent graduates of private four-year colleges with student loan debt. These graduates owed an average of $16,500 in 1999/2000, compared to $10,600 in 1989/1990 (all figures in 2002 dollars).

Lower income students tend to owe the most money, but the biggest increase in indebtedness over the decade has been among higher income students. In 1999/2000 recent graduates of public colleges from families in the poorest two quartiles owed an average of $13,300 and $13,400, respectively. This compares with an average debt burden for indebted students from the richest quartile of $12,000. However, this debt burden represented an increase of 85 percent for the students from the richest quartile, compared to increases of 67 and 62 percent for poorest and second poorest quartiles, respectively.

The percentage of recent graduates with student loan debt also rose substantially over this period. For example, the percentage of recent graduates from private colleges with student loans from families in the poorest quintiles rose from 63.7 percent in 1989/1990 to 75.4 percent in 1999/2000. Among private school graduates in the richest quartile the increase was from 26.8 percent to 50.1 percent.

The rise in indebtedness over this period was the result of federal government policies that favored loan aid rather than grants, and focused increasingly on students from relatively affluent families. Data from the late nineties indicates that the strong labor market at the time allowed most graduates to cope with higher debt burden. However, the recent weakness of the labor market could pose problems for heavily indebted students. In addition, sharp tuition increases of recent years (driven by state financial problems) are likely to lead to higher debt burdens for future graduates. Such burdens may seriously constrain students’ career choices, and could lead them to delay starting a family or buying a home.

This clause smells to high heaven of a future plan not to allow students to claim protection from overwhelming debt, ever. That will mean even less people will be able to afford college.

The Future of American Education?

Bush and his cronies really want an ill-educated sharecropper population, don't they? "Oh no, we can't have educated people, they might figure out what we're up to, and heaven forbid they may have the time or money to fight us politically. Let's keep them in debt bondage forever." Either that or it's a way to drive poor kids into the military. Or both.

And Democrats voted for this. So much for their being the party of the little person.

Time for a revolution, Bring guns and money. ( What's that you say, Mr. Tony Blair and Mr. Charles Clarke? I'm advocating armed revolt and should be banged up indefinitely without charge or trial?)

*Those General Everyday Evil Clauses:

*During the recent debate on tightening the bankruptcy code, the
lawmakers rejected a proposal to prohibit corrupt companies from issuing huge
payouts to senior executives shortly before entering bankruptcy. They blocked
consideration of a measure that would have curtailed the ability of companies
like Enron and WorldCom to shop for the most favorable bankruptcy courts; such
actions have had the effect of disenfranchising employees and retired workers
from the process.

*They defeated a proposal to protect those employees and retired
workers when their companies go bankrupt. They refused to close the
"millionaire's loophole" that permits wealthy individuals to shelter their
assets from lenders by creating special asset-protection trusts.

*And on Wednesday, they rejected a proposal to put a nationwide
limit on the homestead exemption, a provision that has enabled corporate
executives to buy expensive homes in states like Florida and Texas to shelter
their assets from creditors.



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12/19/2004 - 12/26/2004  
12/26/2004 - 01/02/2005  
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01/09/2005 - 01/16/2005  
01/16/2005 - 01/23/2005  
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02/06/2005 - 02/13/2005  
02/13/2005 - 02/20/2005  
02/20/2005 - 02/27/2005  
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05/29/2005 - 06/05/2005  
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06/19/2005 - 06/26/2005  
10/30/2005 - 11/06/2005  

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