Occupiers press Tim Scott on student loan rates 

Stafford loan interest rates set to double on July 1

Occupiers stood in front of Rep. Scott's office holding signs Wednesday afternoon.

Courtesy of Jaque Metz

Occupiers stood in front of Rep. Scott's office holding signs Wednesday afternoon.

Members of Occupy Charleston staged a demonstration in front of U.S. Rep. Tim Scott's office in West Ashley during afternoon rush hour Wednesday. The issue at hand was student loan debt.

In 2007, Congress passed the College Cost Reduction and Access Act, which temporarily subsidized federal Stafford loans, cutting their interest rates in half from 6.8 percent to 3.4 percent, in an effort to make college education more affordable. The low-interest provision is set to expire on July 1, and President Barack Obama has been pushing Congress this spring to stop the looming rate hike. Critics have said Obama is merely trying to buy the youth vote, and the Congressional Budget Office has estimated that a one-year interest rate freeze would cost $6 billion.

Student loan debt has been a recurring theme in the nationwide Occupy movement. Americans currently owe more on student loans than on credit cards, a fact that some analysts attribute to the rising number of students going to college. Kathi Regalbuto, who was involved in the demonstration, stresses that the event was a demonstration calling for action, not a protest against any past action by Rep. Scott, who was elected in 2010 on a wave of Tea Party support.

"In this particular case, we are trying to send a message to Mr. Scott that more needs to be done to protect our college students financially," Regalbuto says in an e-mail. Personally, she says she would like to see the Pell grant program returned to its 1990 percentages, greater consumer protection for students with loans, and greater control over private colleges.

Regalbuto says occupiers handed one of Scott's staffers the following letter in solidarity with Occupy Wall Street:

As an official subcommittee of the OWS Empowerment and Education Working Group, we have consensed on the following principles. They are not demands. Rather, we hope they can serve as a starting point for a much needed conversation about the American education system, as well as an impetus for change. By adding our voice to the call to strip higher education of its dependence on student debt, we are translating the ideals of the Occupy movement into an initiative for action.

1) Tuition-Free Public Higher Education: One of the biggest steps we need to take to alleviate future student loan debt is to guarantee tuition-free education for students enrolled at public colleges and universities. In California and New York, where public education was formerly free, this will simply be a restoration of the status quo. For others, it will be a restoration of the spirit of the GI Bill, which provided a free college education to tens of millions, and established U.S. higher education as a democratic gold standard worldwide. According to a recent estimate, drawn from Department of Education data, the cost of covering tuition at all the nation’s two- and four-year public colleges and universities will be about $70 billion. Put in perspective, the Pentagon “wastes” this sum in unaccountable spending every year. Simply ending the Bush tax cuts ($80 billion annually) will easily cover this cost.

2) Zero-Interest Student Loans: Student loans are not consumer loans, and they should not be charged fees and interest as if they are for a new flat screen TV. For many Americans a university degree has become a prerequisite for employment. Soaring tuition costs means that for most students debt is a precondition for entry into the workforce. This is akin to systems of indenture where workers are forced to pay for access to work with work. This arrangement does not correspond in any meaningful way to a consumer choice. Zero-interest student loans are the only justifiable kind of lending under these circumstances. The current scenario, in which government agencies, banks, and other private lenders charge high interest rates by which they extract lavish profits is corrupt and unsustainable.

3) Private Colleges Must Open Their Books: Students at private and for-profit universities and colleges have a fundamental right to know how their tuition dollars are being allocated and spent. These institutions are fiscally dependent on student loan debt, they enjoy a tax-free status, and they are beneficiaries of federal largesse in all sorts of ways. Withholding information about the conduct of their fiscal affairs is a violation of the ethos of shared governance and transparency that liberal institutions like universities should be promoting, and practicing.

4) Student Debt Written Off In The Spirit of Jubilee: The student loan industry has profited from borrower vulnerability through predatory lending practices such as compounding interest rates, high collection fees, and few consumer protections. Inflating tuition costs have been financed through student debt that will soon exceed 1 trillion dollars. The morality of perpetuating this unjust system by continuing to pay these predatory loans is questionable. In times of fuller employment, the student loan debt system has yielded no end of private suffering and humiliation for at least two generations of debtors. In a time of chronic underemployment–and the worst may be yet to come–the burden is beyond tolerance. Immediate forgiveness in the spirit of a jubilee, where the injustice of an unpayable debt is redeemed through a single, corrective act, is the only just response to this crisis.

An interesting fact pointed out by The New York Times: In 2007, 77 Republicans — most of whom are still in Congress — voted for the College Cost Reduction and Access Act, but the current legislation to extend the lowered interest rate has exactly zero Republican sponsors.

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Correction: The demonstration took place Wednesday, not Thursday. We regret the error.


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