Washington Informer: Indenturing Our Young People

Demos, a research institution, created a model to estimate the losses. Their study found that for a young couple with B.A. degrees from four-year colleges, with median incomes and college debts for their education level, they would lose an average of $208,000 over the course of a lifetime, in comparison to a couple without college debts. Two thirds of the losses would come from retirement savings — since they would be unable to save as much while paying down their debts. One-third comes from loss of home equity, since they would either purchase a home later or be able to afford less of a down payment.

Not surprisingly, researchers at the Federal Reserve worry that the debt burdens will harm the economy, as the young put off buying cars or renting apartments or starting new families.

This is the down side of Gilded Age extremes in wealth. As the rich get richer, they rig the rules to avoid paying their fair share of taxes. Top rates go down; tax dodges proliferate. Some billionaire hedge fund operators pay lower rates than their chauffeurs.

Billion-dollar companies like GE use overseas tax tricks to pocket refunds rather than pay taxes. From 2008 to 2012, GE paid less in taxes than the smallest mom and pop store with a profit.

So instead of taxing the rich and powerful, we squeeze public investment. Government cuts back on support for universities. Students and families get the bill. The result is that an entire generation racks up deep debts or forgoes needed education.

This can’t go on. We need fair taxes to generate the income needed to make college affordable for all who merit it. We should put clear limits on the debt burden graduates must bear — and how long they must bear it. Rep. Karen Bass has a bill — the Student Loan Fairness Act – that would limit repayment to 10 percent of after-tax income and 10 years at most. Sen. Elizabeth Warren suggests students should be given the same interest rate — 0.75 percent — that the Federal Reserves gives the biggest banks (that taxpayers had to bail out).

The only way this will change is if students, parents and indebted graduates make their voices heard. But all of us should demand action. It is unacceptable that the sons and daughters of America’s working families must face indentured servitude simply to get the education they need.

Keep up with Rev. Jackson and the work of the Rainbow PUSH Coalition at www.rainbowpush.org.