2015/06/12 – Massachusetts Sen. Elizabeth Warren called on the federal government to punish states that choose to cut higher education funding, and for the federal government to step up funding for federal Pell Grants.

“States cuts to higher education must stop,” Warren said at a June 10 conference call with Democracy for America Executive Director Charles Chamberlain, and MoveOn Executive Director Anna Galland.  “Because states cut support, tuition goes up and families are left to pick up the bill. If they invest in their schools then they shouldn’t be able to get federal aid. And the federal government has to step up, too. … We need to step up Pell Grants. Pell Grants used to cover three quarters of the cost of college. Now it’s only one-third. Without Pell, smart, hard-working poor kids’ opportunities will shrink to the vanishing point.”

Warren’s call comes at a time when college costs are outstripping family incomes, particularly in Mississippi. The Associated Press reported that in-state tuition in Mississippi has gone up 57-percent since the fall of 2004, while household incomes in the state have stagnated drastically in the aftermath of the 2008 National Recession. According to the AP, one year of college at a state university—not including room, board, and other expenses—now yanks away about 17-percent of the typical Mississippi family’s income.

Black families more often fall below the “typical” category of Mississippi family income, with non-profit American think tank The Economic Policy Institute reporting that the 2012 median wage for white Mississippians was $16.97, while black Mississippians averaged only $11.44.  This might explain how the Associated Press was able to cite federal figures showing almost all of the state’s undergraduate students at historically black Mississippi Valley State University (about 90-percent) having to make use of college loans in 2011, and owing an average of more than $7,800 as a result.

But soaring college costs are a problem at the state’s majority-white schools, as well.  More than half of students at the state’s eight public universities have federally-financed student debt in 2011, with the average student borrowing more than $6,000.

“We have a serious problem,” Warren said. “The cost of college is out of control. Students and families are mounting up more and more debt just to make it through. Two-thirds of students today borrow money to get through school and the average debt for an undergraduate is about $30,000. Low-income families and middle-income families are hit the hardest.”

The senator pointed out that school debt is chipping away at the greater economy, not just the checkbooks of students and their parents.

“Exploding debt is stopping more and more young people from moving out of their parents’ house, from saving up to make a down payment on a house, buying cars, starting small businesses, saving for retirement, from making the purchases that make our economy grow. Even if you have no kids at all, student loan debt is a drag on our economy,” she said.

Student loans are not at all like traditional loans from a bank or a credit card company. It’s not easy to re-finance student loans, which are a high credit risk and offer no collateral.  Also, unlike your hospital bill or your VISA debt, there’s no getting away from student loans through bankruptcy court just because your college degree didn’t land you a job with a living wage.  Your bankruptcy lawyer won’t let you throw your college debt onto the pile of discharged debt thanks to a 1998 law making undue hardship the only means to discharge student loans in bankruptcy.

Shooting for that “Undue Hardship” brass ring is not easy, of course.  You’ll first have to convince a federal judge that there is a “certainty of hopelessness” to your financial life before he’ll take your case seriously—and by “certainty of hopelessness,” you’d better be handicapped and/or destitute, yet somehow still able to afford a lawyer to argue your case.  But even if you are blind, and prescribed with enough anti-psychotic drugs to mellow down a wolverine, you’ll still get no guarantee, and bankruptcy lawyers admit that convincing the court of your undue hardship is unlikely.

The Educational Credit Management Corporation (ECMC) is a contractor paid by the federal government to squelch your Undue Hardship argument in court, and they’re very good at it.  Even the ECMC website makes clear that “undue hardship rarely discharges student loan debt.”

According to ECMC: “the bankruptcy court uses what is known as the Brunner test, which requires you to show that you cannot pay your student loans and maintain a minimal standard of living; your circumstances (often disability related) are such that the hardship is long-term and beyond your ability to change; and you have made good faith efforts to repay your student loans.”

One former lawyer wrote  that proving undue hardship was about as easy as “stabbing out your eyes and being done with it.”  Thanks to that onerous 1998 law, you’re stuck with whatever low-end job your junk degree from a predatory for-profit college that sank more money into marketing itself than hiring good professors.

Warren added that colleges’ misplaced priority on revenue was another thing that needed a harsh government response.

“If they have the resources, schools need to step up. Schools need to make sure that federal aid is spent on education, not on marketing budgets,” warren said.  “Affordable college with a debt free option can be a reality, but lobbyists won’t work for it.  We have to work for it.”

Source: NAACP Writing Staff