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Story of the Week: The strange turn in the presidential campaign

Something remarkable happened in the presidential campaign this week, something rare, even beautiful and it deserves a moment of commemoration: Mitt Romney agreed with President Obama on a substantive matter of policy. 

 As you've probably heard, thanks in no small part to the President's appearance on Jimmy Fallon slow-jamming the news, the interest rate on Federal Stafford loans is set to double from 3.4 percent to 6.8 percent this July, as the law temporarily lowering them expires. 

 Congressional Democrats, led by Congressman Gary Peters and the White House are pushing for an extension of the lower rate before the deadline. You won't be surprised to hear that, to the extent that Republicans have expressed their views on the matter, they've been opposed. Here's uber-reactionary Congresswoman Virginia Foxx giving her two cents on the matter. 

"I have very little tolerance for people who tell me that they graduate with $200,000 of debt, or even $80,000 of debt. Because there's no reason for that."

And this past week Missouri Senate candidate Representative Todd Akin compared student loans to "Stage 3 Cancer of Socialism." The Ryan budget calls not only for the student loan rate to double back to its original number, but also slashes Pell Grants, the direct aid the government gives to students to offset tuition, by $170 billion over the next ten years. 

 And just a couple months ago when asked about student loans on the campaign trail, Romney said this:

"You know I wish I could tell you that there is a place to find really cheap money or free money and we could pay for everyone's education - that's just not going to happen."

Ah yes! Free money, heaven forefend. We can't have that. Nevermind the trillions of dollars, literally in near zero-interest loans the Fed has made to the Too Big To Fail Banks during the crisis and its aftermath. We all know students aren't too big too fail, but they are, apparently, a powerful enough political constituency, that the ever-expedient Romney pivoted towards pandering to them this week. 

"I support extending the temporary relief on interest rates for students as a result of, as a result of student loans obviously, in part because of the extraordinarily poor conditions in the jobs market."

 I suppose this counts as progress. House Republicans came around as well, and passed a bill to extend the lower inrerest rate, but their bill pays for it by taking money from the Affordable Care Act, rather than closing a tax loophole for high earners as Democrats prefer. (That didn't stop the Club for Growth from asserting that any federal subsidy of student loans was bad policy and should be ended).

But even if we do have a brief, and tenuous moment of consensus on Stafford loan interest rates it masks a much larger and deeper set of conflicts. There's a profound distance between our ideal of a social contract that offers "equal opportunity" and the reality of a society in which a four year college degree remains out of the grasp of a majority of the population. We think of college as the primary engine of social mobility in our society, the mechanism to secure one's place in the middle or upper middle class, and yet for the last nearly two decades, the percentage of the population with college degrees has risen slowly and is still only just above 30 percent. In 1980 it was about 20 percent.

26-percent

 

 

As tuitions rise, students must take out more debt to pay for those rises in tuition, and so now we have a total of one trillion dollars in outstanding debt, more than credit card debt or auto debt. And that debt is growing at a rate twice as fast as mortgage debt was growing during the housing bubble. So, too, are deliquencies. Not surprising given that fully half of those under 25 are either un or underemployed.

Higher education is a public good that everyone agrees is valuable and essential both for individual flourishing and social health, and yet for all the rhetorical nods we make to it in our political culture, we don't actually spend that much public, federal money on it, and what we do spend is, like so many other areas of policy, hidden largely in the tax code. It's a model that incentivizes debt, debt which then fuels further tuition increases. The great Mike Konczal at the Roosevelt Institute made a list of the various ways the tax code subsidizes higher education, and found the total cost of the roughly dozen different exemptions and deductions was about $23 billion a year, which is in the middle range of estimates of what it would cost to simply make higher education free.

Part of the reason that bachelor's degrees have remained a relatively rarefied commodity is that we have failed to conceptualize of it fully as part of the rights of citizenship, like, say, police protection, access to the courts, elementary schools and public streets.

Student debt is a symptom of a broken social contract as much as it is the cause. But don't bet on hearing either candidate say that on the campaign trail.