This is going to be one of those political posts that some won’t agree with. If you don’t want to read about completely biased political arguments, then I have some very nice pictures in my Gallery.

And if you are asking why I am bias, it is because I am one of those people who still has a significant student loan to pay back. While I was lucky, and don’t have as big a loan as some of my friends, I still owe enough to be a very respectable down payment on a house, or to buy a very nice car. And yes, despite being in Japan, I am still sending money back to the US to pay down my loan.

Without further ado:

Recently, Elizabeth Warren has been campaigning to help those people who are being crushed under the financial burden of student loans by writing the Bank on Students Emergency Loan Refinancing Act in the Senate. If you are interested, it can be read here (PDF). It’s not a very exciting read, by the way.

After reading it, it seems to be a very well thought out act, at least from what I can tell. It allows those who have student loans, which currently cannot be refinanced after consolidation, to refinance at lower rates, while increasing taxes on those who have an income of over $1 million a year (known as the Buffett rule).

I know that a lot of people find that extra tax cringe worthy, but keep in mind, that it would only affect around 22 thousand people in the US. My guess is that I don’t have any readers who would be affected by this tax.

Of course, both our state congressmen, Inhofe and Coburn, voted against the bill. Of the 60 votes needed to pass the bill, it only got 56. This was a very partisan vote.

I decided to write a letter to the congressmen.

Dear Senator,

I am writing because I was curious as to the reason for voting against the Bank on Students Emergency Loan Refinancing Act?

It would seem that despite your claims of supporting education, it would appear to the every-man that you have made a grave mistake by ignoring the needs of those who are now being crushed with high interest rates.

Since 2000, the average cost of public universities has increased by nearly 50%, or around $7000, per year. Even adjusted into current dollars (as of 2012) the price of a meaningful education at a public university has increased by 30% per year. As most students attend public universities, I will focus on these statistics.

Assuming that a student graduates in the traditional 4-year period, this places a burden of an extra $28,000, or $20.000 depending on which statistic you use, on the student, which most students are forced to take extra student loans to pay. Some of these loans come with a low interest rate as determined by the government, but upon completing university, and consolidation, some of the interest rates could as much as double.

This is an unfair burden placed on the future generations of this country. The very people whose tax dollars, which support your salary, and will continue to do so throughout your retirement, are forced to forego the traditional lifestyle that you promote so that they can focus solely on paying you back, or be crushed under the burden of high interest on a set of loans that they are forced to take to partake in an economy that no longer rewards anything but the ability to successfully complete a list of milestones (it is nearly impossible to find meaningful work and success without a university diploma).

This means that they are getting married and having children much later. They are buying houses much later. They are creating meaningful lives much later. This in turn affects an economy that is already shaky at best. They are not spending the dollars to help build a stronger economy because they must must focus all their resources on paying you back.

I was curious as to your reason for voting against this bill? Is it because some of your donors, whose incomes exceed the $1 million mark would have an increase in taxes? Is it because it was submitted by a Democrat? Is it because you have an alternate plan that nobody knows about that would assist those who are being crushed by an increasingly inefficient education system? Is there a different reason?

I would be very thankful if you could take the time to send a reply so that I, and many others, could have some peace of mind that the politicians that we support are actually making decisions in the best interest of their constituents and promoting a system that helps people achieve the American Dream rather than focusing all their energy to preserving a system that rewards greed and corruption.

Thank you,

Bryan Ogden

PS: While it may be a lot to ask, a direct honest answer would be appreciated, rather than some polititalk non-answer.

Whether or not you agree with me, I think everyone can agree that something needs to be done about the rising cost of education, and the increasing burden that are being imposed on future generations. This is the definition of a barrier to entry, but this isn’t business. This is life. Everyone should have an equal opportunity achieve success in their life after university, as well as an opportunity to contribute to and strengthen the economy.

What do you think?

 

 

EDIT – The Inhofe response

Dear Mr. Ogden:

 

Thank you for contacting me regarding student loans. As your voice in Washington, I appreciate being made aware of your concerns.

 

My views on education in America come from a somewhat unique perspective in that my wife, Kay, was a teacher at Edison High School in Tulsa for many years, and our daughters both became teachers as well. I can assure you that I am one of the strongest supporters of quality education. I commend the efforts of all students who strive to achieve a higher education and improve their lives, especially those struggling through financial burdens.

 

The William D. Ford Federal Direct Loan (DL) program is the primary federal student loan program administered by the U.S. Department of Education (ED). Several types of loans are offered through the DL program including: Stafford Loans for undergraduate, graduate and professional students and PLUS loans for graduate students and parents of dependent undergraduate students. From 2000 to 2010, the annual total of loans disbursed to students in the U.S. more than doubled, from $43 billion to $109 billion.

 

In 2013, I supported the Bipartisan Student Loan Certainty Act of 2013 (P.L. 113-28), which made major changes to student loan interest rates, including setting the interest rate on all new loans to the 10-year Treasury rate plus an add-on based on loan type to offset costs associated with defaults, collections, deferments, forgiveness, and delinquency. The bipartisan compromise allowed for an estimated savings of $715 million over 10 years, according to the Congressional Budget Office (CBO).

 

On June 4, S.2432, the Bank on Students Emergency Loan Refinancing Act, was brought to the Senate floor. This bill would allow most individuals with existing student loan debt to refinance both federal student loans and private loans into new federal direct loans at rates from the 2013 law. On June 11, S. 2432 failed a Senate procedural vote by 56-38.

 

I believe higher education is one of the key tools in lifting young people out of poverty and setting them on a path to success. However, S.2432 would have completely diminished the private sector refinancing market, which currently provides students with responsible and affordable debt payment relief, by transferring private loans into public debt. This bill, if passed, would be detrimental to our deficit by putting taxpayers on the hook for private loans. In addition, this bill does not address the skyrocketing price of education for current and future students. What Americans truly need is legislation that would improve our economy, foster higher learning, and create stable middle-class jobs.

 

There are several loan repayment and forgiveness programs currently available to assist individuals in paying back their student loans. The Income-Contingent Repayment Plan allows borrowers to pay a monthly payment based on annual income, and any outstanding balance after 25 years is forgiven. The Public Service Loan Forgiveness program allows the unpaid balance of a student loan to be forgiven after 120 monthly qualifying payments and 10 years of full-time employment at a public service job. You can find more information on these and other programs at https://studentaid.ed.gov/repay-loans/understand/plans

 

Please know that I will continue to work with my colleagues to find a solution to the looming increase in the cost of higher education. Do not hesitate to contact me again with any future thoughts or concerns you may have.

Sincerely,

James M. Inhofe
United States Senator