Sen. John McCain, R-Ariz., has no student debt. In fact, his net worth is $26.2 million. Six years ago McCain, along with other Democrats and Republicans in Congress, voted in favor of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, or S 256.
McCain’s colleague, Sen. Chuck Grassley, R-Iowa, sponsored the bill. Both McCain and Grassley have degrees from universities but firmly believe in denying that opportunity to our current generation of students.
Why? Section 220 of S 256 amended the law to prevent federal and private loans from being discharged in bankruptcy. In simple terms, if you have student debt, private interests may potentially profit from you.
In 2007 Sallie Mae insured 85 percent of its $142 billion in student-loan collection with the federal government, according to Bethany McLean of Fortune magazine.
Should a student default on a loan, a lender receives between 96 percent and 98 percent of the loan’s interest and principal from the government. This leaves taxpayers and students footing the bill for Sallie Mae’s profits.
McLean reported that in 2006 student loans comprised 23 percent of the “core earnings” for Sallie Mae, allowing CEO Tim Fitzpatrick to walk away with $16.6 million in salary, stock and bonuses.
This occurred while students were suffocating from lingering debt from their educations.
During last year’s lame-duck session, Grassley, McCain and many others from both parties voted in favor of extending former President George W. Bush’s tax cuts for the rich in last year’s tax cut deal, passing the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, HR 4853.
In the United States, the richest country on planet Earth, the decision makers in Washington fail to recognize education as a right.
If they did, then the system of class privilege on which the U.S. is predicated would be completely wrong.
This would mean that our leaders in Congress, many of whom have no debt and already received their university degrees, were also wrong for upholding this privilege. They diverted as much taxpayer money as possible into the hands of the small elite by insuring loans for lenders and not for students.
And heaven forbid that we fault the New American University (formerly ASU) for its extremely high tuition and moderate financial aid model of business.
Hamilton Nolan of Gawker sorted through the Department of Education’s report on the top 10 public universities for student debt. Nolan found that ASU ranked sixth with $479 million, only $81 million behind Ohio State University, which has $560 million in student loans.
According to a 2010 financial aid report by the Arizona Board of Regents, almost 50 percent of Arizona’s financial aid is loans, and half of all undergraduate and graduate students completed their degrees with debt.
Do you know one of these students?
Reach Athena at asalman3@asu.edu
