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Saturday, August 17, 2013

The College-Loan Scandal in America

Matt Taibbi writes in Rolling 

Stone about the economics behind 

college tuition. Interest rates get the 

headlines and the attention of 

politicians, but Taibbi says the real 

culprit is "appallingly high 

tuition costs that have been soaring at 

two to three times the rate of 

inflation, an irrational upward t

rajectory eerily reminiscent of 

skyrocketing housing prices in the years before 2008." He writes,"For this story, I interviewed people who developed crippling mental and physical conditions, who considered suicide, who had to give up hope of having children, who were forced to leave the country, or who even entered a life of crime because of their student debts. ... Because the underlying cause of all that later-life distress and heartache – the reason they carry such crushing, life-alteringly huge college debt – is that our university-tuition system really is exploitative and unfair, designed primarily to benefit two major actors. First in line are the colleges and universities, and the contractors who build their extravagant athletic complexes, hotel-like dormitories and God knows what other campus embellishments. For these little regional economic empires, the federal student-loan system is essentially a massive and ongoing government subsidy, once funded mostly by emotionally vulnerable parents, but now increasingly paid for in the form of federally backed loans to a political constituency – low- and middle-income students – that has virtually no lobby in Washington. Next up is the government itself. While it's not commonly discussed on the Hill, the government actually stands to make an enormous profit on the president's new federal student-loan system, an estimated $184 billion over 10 years, a boondoggle paid for by hyperinflated tuition costs and fueled by a government-sponsored predatory-lending program that makes even the most ruthless private credit-card company seem like a "Save the Panda" charity. Why is this happening? The answer lies in a sociopathic marriage of private-sector greed and government force that will make you shake your head in wonder at the way modern America sucks blood out of its young."Full Story:http://www.rollingstone.com/politics/news/ripping-off-young-america-the-college-loan-scandal-20130815?print=truehttp://www.rollingstone.com/politics/news/ripping-off-young-america-the-college-loan-scandal-20130815
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