Student Loans: It’s Complicated

The scope of student loan default is staggering.

Over 1 million student loans enter default every year, and 1 in every 10 Americans has defaulted on a student loan.

Some 7.8% of all student loans are currently in default… a total debt of $124.4 billion.

A high percentage of borrowers default long before they enter peak earning years:  More than 1 in 10 default within Year One… and 1 in 4 by Year Five.

The effects of default are devastating both for borrowers and their families.  Federal student loans are only considered in default after 270 days of non-payment, after which:

  • The loan is immediately due in its entirety, and interest and late fees continue to accrue until it is paid.
  • The borrower loses eligibility for future benefits including further student aid, deferment or forbearance of payment, and tax deductions.
  • The borrower’s credit score declines, which impedes the ability to secure home and auto loans.
  • The government or private lender can sue in court to garnish a portion of the borrower’s wages until the loan is repaid.  The borrower will incur court costs or other fees related to the lawsuit.
  • Schools may withhold proof of attendance.  It is also legal for them to withhold academic transcripts.

But default is only part of the story. 

Within a year of graduation, almost 3 in 5 borrowers are delinquent at least once, and nearly another 1 in 3 are already chronically delinquent.

The challenge for student debt relief is arriving at an equitable formula for a very unevenly distributed problem.

For starters, while more than 1 in 3 borrowers owe less than $20,000, almost 1 in 5 owe more than double that.

Student’s choices also play a significant role in default.

Those attending private, for-profit colleges are almost twice as likely to default as those attending other schools.

That should be unsurprising:

The average tuition and fees at public schools for in-state students in 2021 was $5,514 ($12,145 for out-of-state.  The average tuition for private schools was $24,107.

But even tuition at public universities rose by 63% between 2008 and 2020.

Default rates are also significantly higher for borrowers employed in selected professions and industries, and holders of selected degrees:

Regardless of the band-aid ultimately slapped on the current problem, the real question is whether the high cost of higher education is strangling American competitiveness and upward mobility.

College tuition at public universities is free or nominal for nationals of a long list of nations large and small, and both developed and developing: 

Argentina, Austria, Belgium, Brazil, Cuba, Czech Republic, Denmark, Egypt, Estonia, Fiji, Finland, France, Germany, Greece, Iceland, India, Iran, Italy, Kenya, Lebanon, Luxembourg, Malta, Mauritius, Mexico, Morocco, New Zealand, Norway, Panama, Philippines, Poland, Russia, Slovenia, Spain, Sri Lanka, Sweden, Taiwan, Trinidad & Tobago, Turkey, Uruguay.

But in America, education – like healthcare – is too often driven far more by profit than by public interest.

0

A sad win for Big Pharma

Insulin has been around since the 1920s, but Big Pharma – at least in the U.S. – is still pricing it as if it was the product of billions of R&D dollars.

In fact, the monthly cost of diabetes in the U.S. is over three times that of India and nearly 20 times that of Italy.

It hasn’t always been this way.

According to a study published in JAMA Internal Medicine, insulin prices tripled between 1996 and 2014 in the wake of Eli Lilly’s introduction of its market-leading Humalog insulin brand.

The U.S. accounts for only 15% of the global insulin market, but generates almost 50% of the industry’s insulin revenue.

Skyrocketing costs now impose an extreme financial burden on the 1 in 7 users for whom insulin consumes at least 40% of income remaining after costs of food and housing.

As many as one in four Americans with diabetes are now shaving insulin doses or going completely without, and those suffering the most either lack insurance or are chained to high-deductible policies.

The Inflation Reduction Act of 2022 caps insulin costs at $35/month, but for Medicare patients only.  A proposal to extend the cap to everyone covered by private insurance – including coverage purchased in marketplaces established under the Affordable Healthcare Act – was thwarted by the opposition of 43 Republican senators.  The seven Republicans who broke ranks to vote for broader coverage were:

  • Cassidy (LA)
  • Collins (ME)
  • Hawley (MO)
  • Hyde-Smith (MS
  • Kennedy (LA)
  • Murkowski (AK)
  • Sullivan (AK)

In 2020, Colorado was the first state to cap the price of insulin, limiting it to no more than $100 per month, but the cap only applies for those with health insurance.

Western social democracies leverage the buying power of their national healthcare systems to negotiate drug pricing, and their buying clout delivers substantially lower pricing

In contrast, Medicare/Medicaid – the nation’s largest buyers of drugs to the tune of over $1 billion annually – are actually barred from negotiating drug prices.

Reforms that would allow Medicare to negotiate prices, cap out-of-pocket costs for prescription drugs, and limit insulin cost-sharing would make lifesaving drugs more affordable…

...but that will require a working Congressional majority for the Democratic Party.

Something to remember in November.

0

Contraceptives: Mexico’s new contraband

For 20 years Verónica Cruz Sánchez, founder of the feminist human rights group Las Libres in Guanajuato, Mexico, was a tireless advocate for women seeking abortions in a country with staggeringly high rates of rape and domestic violence. 

During that time, her non-profit organization distributed hundreds of thousands of ‘abortion pills’ to women in need.

But when Mexico’s Supreme Court decriminalized abortion in 2021 on the grounds that abortion bans violated the rights of women, it may have seemed that her organization’s work was concluded. 

Then the U.S. Supreme Court overturned Roe vs. Wade and Las Libres’ mission was suddenly turned on its head.

In recent weeks, the organization has experienced an avalanche of calls from U.S. jurisdictions in which abortion restrictions are already taking effect.

Previously scheduled abortions are being summarily cancelled, leaving the victims with too little time to sift through too few alternatives.

Las Libres packages the pills in orders of 3-5 each, depending upon availability.  They are batched and transported to the U.S.-Mexican border, where an army of volunteers carries them into the U.S. and assures that each is delivered to its final destination within days of order.

Mexican clinics are already anticipating an influx flood of U.S. women seeking abortions, evoking images of abortion clinics dotting the Mexican side of the border like casinos on Native American reservations.

And contraceptives are now a regular part of the mix of drugs making its way north. In an ironic reversal of stereotypes, Mexican Catholics have proven themselves far more tolerant and respectful of human rights than Evangelical Americans.

0

At risk from redistricting

With the exception of metropolitan Detroit, Michigan is a challenging landscape for any Democratic candidate.

Republicans have maintained control of the state’s Senate for the past 8 elections, and of its House for 6 of the past 8 elections.

Current Governor Gretchen Whitmer is a Democrat, but Michigan’s governorship has alternated between the two parties for the past 6 elections.

The 2020 Congressional redistricting significantly redrew boundaries for the adjacent 7th and 8th Districts, now pitting one House incumbent, Republican Tim Walberg, against another, Democrat Elissa Slotkin.  Walberg has served in the House since 2011, and Slotkin since 2019.

Slotkin, who holds a bachelor’s degree from Cornell University a master’s from Columbia, began her career serving in Iraq with the CIA. She later served on President George W. Bush’s national security staff and in the Department of Defense during the Barack Obama administration.

Her experience makes her an exceptional choice for her current House committee assignments:  Homeland Security, Armed Services, and Veterans’ Affairs.

Highlights of her voting record (Yeas) in the current Congress:

  • American Rescue Plan
  • For the People Act
  • American Dream and Promise Act
  • Equality Act
  • Infrastructure Investment and Jobs Act
  • Build Back Better Act
  • Women’s Health Protection Act
  • COVID-19 Hate Crimes Act
  • Impeachment of Donald Trump

Learn more about Elissa Slotkin here:

0

Racial inequality: Peeling the onion

It is unsurprising that Republicans are far less likely than Democrats to believe that Blacks experience racial discrimination on every dimension surveyed… but the contrast in partisan perceptions is truly staggering.

Reality seen through a fractured lens

Democrats are 4 times more likely than Republicans to believe that Blacks experience racial discrimination in employment.   The data suggests that the more than 1 in 3 Republicans who deny employment discrimination believe that affirmative action has actually given Blacks an unfair advantage.

It is of note, however, that – perhaps as a result of the BLM movement – the partisan gap is significantly narrower on the issues of discrimination within “the criminal justice system” and “dealing with police”.

Republicans, however, exhibit their greatest denial of discrimination on the issues of “healthcare” and “voting rights”.

Blaming the victims

When it comes to the causes of racial inequality, Democrats assign greater weight than Republicans to external factors including the influence of access to good schools and jobs, and systemic discrimination.

Republicans are far more likely to blame the victims, attaching far greater significance to family instability, lack of good role models, and laziness.

An atmosphere of bigotry

Ever since Trump was elected in 2016, both Blacks and Republicans have believed that the expression of racist views is both both more common and more widely accepted.

Government action

It has been as long documented that awareness of racial inequality increases with education as it has been that American education has been faltering.

In fact, a voter with a high school education or less is twice as likely as a college graduate to believe that government has done too much to address racial inequality, a view shared by:

  • 1 in 5 of those aged 65+
  • 1 in 4 of those aged 50-64

In stark contrast – and on a hopeful note for the future – those 18-29 years of age believe that that government is doing too little by a staggering 5-to-1!

NOTE: All data presented in this post was generated by Pew Research.

Racial stereotyping and prejudice are proving far more deeply rooted and resilient than many imagined.  It is a cancer that will only grow without elected representatives who will stand up to reactionaries for the protection of equal rights.

0

Affordable healthcare at risk

The Affordable Care Act (2010), created access to affordable health coverage for nearly 25 million Americans.

In 2014 – the first year of operation –  enrollment was over 8 million, in the following year over 11 million, and in the final year of the Obama administration to over 12 million.

The CMS reports that the ACA marketplace remains an important source of coverage and financial assistance for millions of low-income and middle-class Americans.

  •  52% benefit from reduced deductibles and other cost-sharing
  • Over 90% live in household with income at or below poverty level

According to Pew Research, only inflation ranks as a higher concern than rising healthcare costs.

And yet, from Day 1 of his administration, Donald Trump repeatedly tried to repeal the Act, and when that failed launched a sustained attack on the program:

  • Within days of taking office – and while enrollment for 2017 was still open –  slashed the enrollment assistance budget by 90% and cancelled television ads for the marketplace outreach campaign.
  • Halved the duration of the enrollment period, reducing open enrollment from 90 days to 45 days.
  • Eliminated the individual mandate penalty and loosened regulation of ‘short-term junk plans’…effectively diverting applicants away from ACA.
  • Stopped reimbursing insurance companies for their costs of compliance with the ACA’s financial assistance to low-income enrollees. Insurance companies responded by increasing premiums for silver plans to cover the cost of the cost-sharing subsidies.

The Center for American Progress estimates that if not for these added obstacles, at least 1.26 million more people would be enrolled in marketplace coverage today.

America’s ‘essential workers’ cannot endure without basic healthcare coverage. Protect their rights in November.

0

Blue in Ohio

Congressman Tim Ryan is running for the Ohio U.S. Senate seat vacated by retiring, two-term Republican Senator Rob Portman.

Ryan represented northern Ohio’s 17th Congressional District from 2002 – 2013, and has represented its 13th District since 2013.

He has won his House elections by generous margins, and in the 2022 primaries garnered more votes than his Republican opponent.

Ohio is, nonetheless, a challenging political landscape for statewide Democratic candidates. Donald Trump carried the state.

Although a Catholic, Ryan nevertheless announced in 2015 that he no longer supported abortion bans:

“…while there are people of good conscience on both sides of this argument, one thing has become abundantly clear to me:

the heavy hand of government must not make this decision for women and families.”

A May, 2022 USA/Suffolk poll showed Ryan trailing his opponent by 3 points, but the Roe vs. Wade decision had a dramatic impact: Ryan now leads in some polls by as much as 21 points, including gains among.

  • Women 18 to 44:  From +10% to +19%
  • Independents: From +6 to 8

While Ryan’s focus is on economic issues including fair wages, infrastructure, and healthcare costs, he has supported a broader agenda in Congress, including votes for:

  • American Rescue Plan
  • For the People Act
  • American Dream and Promise Act
  • (LBGTQ+) Equality Act
  • Women’s Health Protection Act
  • COVID-19 Hate Crimes Act
  • Impeachment of Donald Trump

Learn more about Tim Ryan:

0

The widening income gap

The G.O.P’s ability to highjack a labor vote which once made up the Democratic Party’s core is unsurprising in light of the continuing rise of income inequality.

The Federal Minimum Wage has not been increased since  2009… the last time that the Democrats held a working Congressional majority.

And despite periodic increases, the purchasing power of the Federal Minimum Wage peaked in 1968!

While a number of states have enacted laws raising the minimum to as high as $13+/hour, the 2009 Federal Minimum wage of $7.25/hr. is the minimum in 20 states (GA, ID, IN, IA, KS, KY, LA, MS, NH, NC, ND, OK, PA, SC, TN, TX, UT, VA, WI, WY).

The effect is also unsurprising.

Since 1980, income gain for the top 1% is nearly 5 times the gain for the bottom 20%.

The richest 1% now own nearly half of the world’s wealth.

In the depths of the Great Depression, Franklin Roosevelt’s 1935 National Labor Relations Act explicitly granted employees the right to collectively bargain and join trade unions.

When the G.O.P. regained control of Congress in 1946, it passed the Taft-Hartley Act, the so-called right-to-work law, that effectively neutered unions.

Today, America is experiencing a rebirth of organized labor as workers at deep-pocketed multi-nationals including Amazon and Starbucks struggle to regain their American dream.

They deserve our support as voters and as consumers.

0

Environmental U-Turn

With the 2016 election of Donald Trump, U.S. energy and environmental policy pivoted almost 180 degrees.

The administration’s policy was for the US to attain energy independence based on fossil fuel use.  To that end, it rescinded 98 environmental rules and regulations, and supported gas and oil drilling in national forests and near national monuments and parks.

While the current administration has reversed some of these changes, others are now anchored not in agency rules and regulations, but by act of Congress.

Here is only a partial list of the environmental atrocities:

2016

  • Installed a former coal lobbyist to head the Environmental Protection Agency.
  • Signed executive orders approving the Keystone XL and Dakota Access oil pipelines.

2018

  • Announced plans to allow oil and gas drilling in nearly all U.S. waters.

2019

  • Opened the entire coastal plain of the Arctic National Wildlife Refuge to drilling.

  • Rewrote pollution-control policies to reduce regulation of chemicals known to be serious health risks, to the benefit of the chemicals industry.

2020

  • Pulled the United States out of the Paris climate accord.
  • Lowered vehicle emissions standards (projected to increase annual U.S. emissions by 20%.)

The clear message from the Trump administration’s Congressional enablers is that quality of life takes a back seat to corporate profits.

And there is no assurance that a change in control of Congress in 2022 will not allow the assault on the environment to pick up where it left off in 2020.

0

High flying Sen. Mark Kelly

Mark Kelly is a former U.S. Navy aviator who flew 39 combat missions during the Gulf War.

He is also a former astronaut who flew four missions on Space Shuttle Endeavour to the International Space Station.

In 2020, he defeated incumbent Martha McSally (R), appointed to fill the seat formerly held by John McCain, by a margin of 2.4%. He is running for his first full term in 2020.

Kelly is also the husband of former Rep. Gabby Giffords, who survived an assassination attempt in in 2011, but resigned the next year due to brain injury resulting from the shooting. (She has since recovered much of her ability to walk, speak, read, and write.)

In 2013, Kelly and Giffords co-founded the advocacy group Americans for Responsible Solutions (since rebranded simply ‘Giffords’) that is “fighting for stronger gun laws, holding the gun lobby accountable, and supporting candidates who stand for safer schools & communities.”

He has voted for legislation including:

  • American Rescue Plan Act of 2021
  • COVID-19 Hate Crimes Act
  • Protecting Medicare and American Farmers from Sequester Cuts Act
  • Infrastructure Investment and Jobs Act
  • Impeachment of Donald Trump

Learn more about Mark Kelly here:

Stay tuned for the third and final installment of COBALT’s blog series on Arizona, focusing on the gubernatorial race.

Read the first in the series, “Arizona: A Red Blue Checkerboard’ here.

0

Up ↑