Living on borrowed time

Published

George Binning

Lending is one of the essential mechanisms of a fluid economy, whether it be for starting a business, buying a house or funding a university education. Without the availability of loans, huge, useless reservoirs of liquid assets would sit stagnating to the detriment of society as a whole.

It seems only right then to encourage those with the means, to share the wealth; to make it desirable to invest in the potential of others; and if that means allowing them to set a profitable interest rate on a loan then so be it. However the aggressive profiteering that is taking place on loans intended to fund the education of young Americans seems a step too far. It is objectionable in the same way that it is objectionable to pay to go the loo in bus stations. Education, like a bodily function, is a priceless and vital commodity that should not be sold with profit in mind.

This is one economic problem that precedes this recession, the one before it and the one before that. As a second generation of Americans become enslaved to their student loans, as communications improve and the recession tightens its grip an increasingly vocal and disgruntled movement is arising on the Internet. Comments on relevant news articles, and websites such as StudentLoanJustice.org provide an insight into the various states of despair that such a huge proportion of American graduates are suffering.

As well as lobbying for the restoration of borrower protections to American law, some groups are calling for a total amnesty of student debt in the US. Having seen what some students have already been through it may seem like a good idea, but who will be willing lend to future generations students if their debt is to be cleared once every few decades?

The US President is promising reform across the board, including in the area of college debt; the effects of recession are being felt acutely, by heavily indebted American graduates in particular, and change, whether regulated or radical, is imminent.