Friday, April 1, 2016

What's So Wrong About #BernieSanders 's Program To Pay Off Student Debt?

Poor starving post-graduate students want to know.

Source: Pew Research Center

In words: It will increase inequality in our nation, and "We've had quite enough of that Bushie game, thank you" (to misquote Barbara Bush).

But wait! This is important since inequality is the biggest drag on our society, yes it is.


There are many reason why a student cannot get through college and the high cost is one of them. Those who get substantial student loans *Kaching!* do because of equity, often due to parental value in a home.

So what?

If you compute the percentage of the white community with home value with the value of their homes and contrast that with the value of minority students families and the value of their parents home, you will see a great disparity.  The chart above doesn't show how many are homeowners with substantial equity, but one can get a good idea from the disparity, how that will break down

In fact, millions of minority families lost their homes and the equity in them during the Great Recession less than a decade ago. Remember how the Bush administration and lenders were making a big push in the years before 2007-07 to get minorities into their own home with their own mortgages, only to come down like Katrina on them when they lost jobs during the collapse?

It's also true that minorities' incomes have not recovered as quickly from the effects of the recession and African American wealth gap was still unconscionably bad in 2013.

Yes, there are some programs now for low income students, but there are other problems with low income wannabe students.

Homes may be broken by poverty alone. The student isn't the only one who needs help. Parents my have trouble keeping a roof over their and their younger children's heads, may need the free child care an older son or daughter can offer.

The family may face homelessness which can cause a college age child to drop out to help provide a roof over the family's head. So even if a college is offering a dorm room and meals, that may not be enough and we can see from the charts above that the recession hit a much larger number of African American students families than the traditionally stable white families. HIspanics may have regained their net worth of  1/10th  of white families but that is hardly anything to cheer about.

And yes there are white families who through no fault of their children were unstable too, but the charts show that was much less likely than for "minorities".

Most student loans were based on home equity, something more likely and likely a better value for a white family than for Hispanic and African Americans.

So here comes Bernie singing his song of forgiveness for student loans. Who's he singing to, but mostly to white middle class families? If you didn't have equity, you're not included. It wasn't until my mother in law died leaving half her home to my adult daughters that they could get loans for further education. It allowed my middle daughter to pursue teaching credential through student loans.

They aren't and weren't wealthy, but if their loans are forgiven while hundreds of thousands of minority wannabe students who are now nearing their 30s with children and whatever careers they've patched together without the help of degrees and credentials get nothing that is a way to increase inequality.

High inequality is not good for families, for society, or even for the wealthy. It creates an unstable base as we saw during the Bush administration. The Supply Side Tax Cuts created high inequality and the entire economic structure nearly collapsed.

And though that collapse hurt minorities more than white stable families, everyone was hurt except I suspect the multi millionaires.

Yes, Bernie Sanders is playing the same game as George W Bush, throwing out ideas that will help affluent and mostly white families more than others.

History shows that's a dangerous game. Bernie Sanders is hoping no one has told you that. Oops, I just did.