
© American Talleyrand
Debtors' Prisons.
Marco Rubio has a plan for students. Since the 1980s, the student loan-debt burden has risen to $1.2 trillion, which is nondischargable, meaning that the debt could follow you for the rest of your life. States have cut education funding and in response, universities raised tuition.
And it does not seem that politicians are taking any meaningful action to ameliorate this debt burden. Rubio wants businesses to invest in individual students and after graduation; the student "will pay a percentage of my salary over a defined period of time in return for that investment." (
The Wire)
There are several problems with this arrangement not the least of which: It smacks of indentured servitude.
The arrangement puts the student in the same financial place as traded securities: i.e. bought and sold. In addition, investing in an individual student would be on its face a more risky "investment" if the student were from low-income families.
This plan might work for student from high-income families: Students from high-income families can use their family income, and assets as tangible collaterals; and goodwill, namely, family name and reputation as intangible "collaterals." So in institutions of higher learning, the poor would be underrepresented in the student population if the Marco Rubio model is deployed.
According to an article (
USA Today), in 2013, the government's profit from student loans was $41.3 billion: It was $49.9 billion in the previous years. But should the government be making money on a public good such as education? Students who borrowed money from the government pay (based on 10-year U.S. Treasure rate) on Stafford loans: the Treasure rate plus 2.05 percent, capped at 8.25 percent. Graduate student loans pay Treasure rate plus 3.6 percent, capped at 9.5 percent. Parent loans are the Treasure plus 4.6 percent capped at 10.5 percent. (Ibid.) Rubio's plan is ersatz. Senator Warren's and President Obama's plans were better than Rubio's (they do not put a student in hock to a benefactor) although Congress made short shrift of their plans. Perhaps a better way to proceed would be to use the profits the government stands to make in the coming decade on students: more Pell grants and fewer Stafford loans. But a superior (uber) policy is one Obama suggests for community colleges: free tuition! With the caveat that the student is "responsible." This is an unneeded demand, which could be in some ways discriminatory.
Since students aren't allowed to default on their loans, the business investor resort to legal action against the student to recoup her investment. Yet, another, though perhaps remote possible outcome for the delinquent student is prison:
in some states, debtors' prisons are back.
Comment: According to reports, trade ties will continue to be limited until Congress lifts the trade embargo, not likely before 2018, however ties will resume under the auspices of humanitarian assistance and travel. It remains to be seen if the upcoming American acceptance and influence provides a shake-up to "reforming" the current Communist regime and if this resumption of relations provides Obama with the important self-serving "legacy" bullet point for his otherwise dismal administrative record. Time will tell: good thing, bad thing. Also, consider the context of North American Region, the order unfolding.