I am sure there is something to be outraged about this morning. I can’t rev up the energy to get too upset about the coming increase in the rate of interest charge to Pell Loans. I listened to some earnest pundits talking about it. The President made it a big deal, like the Bad Congress was going to double the rate of interest charged to the struggling students, saddling them with crushing debt.
It is very curious. The total number of people affected by this appears to be around seven million people. Certainly a key-demographic, of a sort, but nothing will change on existing loans even if nothing is done, and the increased rate would only apply to money provided for this coming September and beyond.
Seven million is a big number- not as many as the number of undocumented immigrants, mind you (by about two thirds) and this is a niche issue for the rest of us- you know, the 311,591,917 other citizens. I just did the math. The affected population- wait, the prospective population that maybe will be affected- amounts to around 2.2% of the total.
The awful consequence of the interest increase might amount to $1,000 paid back over a decade. I am betting that many of those who are keenly interested in the issue spend more cash at Starbucks over the same period.
So, this is like a major issue?
I listened to the pundits rave on, pro and con, as I drove up Town Hill in Pennsylvania toward Breezewood, the Village of Motels. Having been down the rapids of the triage system of military medicine of late, I buy in completely to the notion that you allocate resources to those who are most gravely hurt, but who at least have a chance of survival.
This furor over the interest rate that will affect so few in such a relatively infinitesimal manner reflects how nuts we are, and unable to triage anything in the myriad of problems confronting us.
I mean, the house is on fire and we are worried about the individual books in the library? Oh well.
The topic blipped again yesterday afternoon. National Public Radio interviewed some student who vowed darkly that really big things would be happening on campus if the essentially-zero rate of interest (allowing for inflation)- was permitted to increase.
I did not hear a word about other ways to finance an education- GI Benefits being one, or ROTC being another. But with even fewer people in the military (about half of one percent of the population) than on Pell Grants, I don’t suppose it has occurred to anyone that there are other ways to actually earn benefits, rather than sit on your ass and demand a better deal.
I am deeply sympathetic to the kids who are graduating from college in this economy with huge debts. Liz-S at Willow financed her law degree and has a daunting bill that is not commensurate (yet) with the economic advantage of having one. I know there are kids who blithely sign up for debt without a freaking clue about what it means.
But here is the deal. My kids do not have any debt from school, and neither do the children of an old buddy who got me spun up about the issue while we were rambling on about something else.
“Did your kids have any debt when they graduated?” I asked.
He shook his head. “Nope. We budgeted and then saved $400K to send both girls to college. I spent about $120K on the older girl, and about the same for her sister, though at a different school and some different costs. Call it a quarter million, total.”
“You came out ahead, or at least under budget,” I said.
He nodded. “Our money, spent as we saw fit. And no student loan debt for the girls.”
“I got off light, too,” I said. “It was an ugly time, with the divorce and all that crap. Still, my home state was good about treating active duty military folks. For example, they didn’t impose state taxes on us if we maintained legal residency there. Other states essentially drive out the troops to places like Texas and Florida that impose no state tax burden.”
“Unintended consequences,” said my friend. “Public policy is always a crap shoot on how it will really work in practice.”
“No shit. My younger boy started school the day before I retired and had to become a resident of Virginia. So, we benefitted from public policy by paying in-state tuition.” I screwed up my brow. “I think it was about $180 grand, total, and I juggled credit card debt and some other structural stuff, but I got it done and they graduated with no debt at all.”
“So where are the parents in all this?” my buddy asked. “And why has a program like Pell Grants that was sold as being intended to help students from low-income families turn into a middle-class entitlement program?”
He shrugged. “Name me a Federal program that actually works the way it was supposed to.”
I thought hard. “Social Security? Medicare? Food Stamps? The Department of Defense?” I gave up after a while. “I think that I think better at Willow. Maybe something will come to me over there.”
Copyright 2012 Vic Socotra
www.vicsocotra.com