I didn't watch the State of the Union address last night, but not for any Obama related reason. Ever since Reagan introduced the “people in the audience” crap which every President since has felt duty bound to emulate, I've been sort of sickened at the prospect of watching what has become more and more a meaningless exercise. Not that it was ever truly that meaningful, but…to get to my actual point.
I understand that Obama is casting himself as the protector of the middle class, by proposing legislation that he knows will never pass. That's all well and good. I'm all for proposing stuff that won't pass if the point is to shape the discourse and get what you want in the long term. On the other hand, Obama is still president, and there's lots of things he can do right now to help both the middle class and the rapidly expanding nameless class, which I'll call proles. (Hint for those of you who grew up without Classic Comics: read your H.G. Wells) Unfortunately, far too often when Obama could do the proles a favor with the stroke of his own, or an underling's, pen, it just doesn't happen.
The latest case in point concerns the impending bankruptcy of the for-profit Corinthian College, brought on by a slew of lawsuits or threatened lawsuits accusing it (correctly) of defrauding its students. Obama has it in his power to forgive the student loans these kids were duped into taking on to pay for the education they never really got. But these are not bankers, so apparently there will be no bailout for them. You can read the full story here. This sort of thing makes the Administration's claim to be the advocate for the bottom 99% ring just a bit hollow.
There are signs of hope, however. The Obama Administration may not be interested in helping these kids, but the progressives in the Senate have spoken out:
A group of Senate Democrats has urged the Obama administration to forgive debts incurred by thousands of current and former students at troubled for-profit schools owned by Corinthian Colleges Inc.
Thirteen Senate Democrats, including Sens. Elizabeth Warren (D-Mass.), Richard Durbin (D-Ill.) and Jack Reed (D-R.I.), demanded in a stinging letter on Tuesday that Education Secretary Arne Duncan “immediately” forgive federal student loans taken out by students at Corinthian-owned schools, such as Everest, WyoTech and Heald.
The lawmakers argued that because federal and state authorities have accused the company of duping students into taking out loans by advertising false job placement rates, and federal law enables borrowers to have their loans discharged if their schools misled them into taking out federal student loans, current and former students shouldn’t be forced to repay those debts.
The $600 million this would cost the government (assuming it could not recover anything from the banks and hedge funds behind Corinthian) sounds like a lot of money to you and me, but it's actually less than peanuts to the federal government. Besides, forgiving that debt would operate as a sort of mini-stimulus; the money those defrauded students don't pay to the government would be spent elsewhere.
This sort of issue will undoubtedly recur. It would be easy enough to stop it from happening in the future. These for-profit schools were designed for one thing only: to suck at the federal student loan teat. All we need do is restrict student loans to students attending non-profit colleges. Better yet, make state colleges and universities free, as Obama has timidly proposed doing for community colleges. But, in the meantime, it's time to give the proles a break, and Obama should jump at the chance to do so.
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