Skip to main content
Part of complete coverage from

A trillion dollar anvil dragging us down

By Van Jones, CNN Contributor
updated 8:15 AM EDT, Thu June 6, 2013
STORY HIGHLIGHTS
  • Interest rates on Stafford Loans issued after July 1 are set to double to 6.8%
  • Van Jones: The $1.1 trillion in student debt out there already creates a crisis for all of us
  • He says, unfortunately, Congress is not looking at big fixes but rather Band-Aid fixes
  • Jones: Sen. Elizabeth Warren's proposal to give students lower interest rate is good policy

Editor's note: Van Jones, a CNN contributor, is president and founder of Rebuild the Dream, an online platform focusing on policy, economics and media. He was President Barack Obama's green jobs adviser in 2009. He is also founder of Green for All, a national organization working to build a green economy. Follow him on Twitter: @VanJones68.

(CNN) -- The student debt fight is back -- with a vengeance.

Once again, current students are facing the possibility of interest rates on Stafford Federal student loans doubling.

Once again, we are asking what our leaders are doing about a crisis that gets worse every year.

Once again, the answer is: Not much.

Van Jones
Van Jones

That is a huge problem -- and not just for millennials, or young people born between 1980 and 2000. The approximately $1.1 trillion in student debt out there already constitutes a crisis for every one of us.

It is the only form of household debt that has continued to rise during the Great Recession. It is also the only form of debt that cannot be discharged under bankruptcy or even death, as parents who have lost children have discovered to their horror. It is preventing young people from buying homes and starting businesses.

Student loan debt greater than card debt
Expert: College is not worth it

In short, student debt is a $1.1 trillion anvil dragging down the entire U.S. economy.

Unfortunately, the conversation in Washington is not about big fixes, but simply how to avoid making matters worse by letting interest rates rise.

Last year, the interest rate on federal Stafford student loans was set to double from 3.4% to 6.8%. There was a massive outcry from students and organizations like my own, Rebuild the Dream. Perhaps fearing young people's electoral clout, Congress kicked the can down the road a year.

So here we go again: Last week, President Obama waded back into fight, urging Congress to prevent the rate hike scheduled for July 1.

But this year, something is different: Sen. Elizabeth Warren. A few weeks ago, Warren, D-Massachusetts, proposed groundbreaking legislation that would give students the same deal that big Wall Street banks get. This bill is good policy, and even better politics.

After all, why are we loaning money to mega-profitable international financial institutions at 0.75%, but demanding up to nine times more from our own young people?

By comparison, the otherwise ideal Harkin-Reid proposal for a two-year extension of the current 3.4% rate is simply not as ambitious.

Unfortunately, the proposals with the most energy behind them are worse than both these options. House Republicans, the Obama administration, and a number of senators are all pushing to permanently tie the rate for student loans to the government's borrowing costs.

It may seem commonsense, but the devil is in the details.

For instance, the Republican plan passed recently is just plain bad for students. Interest rates on July 1 would actually be higher than 6.8% for some borrowers, and vary wildly and unpredictably over the lifetime of the loan. The government would mark up the costs 2.5% to 4.5%, based on the type of loan. The profit would pay down a deficit young people did not create, instead of funding education.

The Obama plan, by contrast, has better terms for borrowers and would offer fixed-rate loans that will not suddenly spike in cost. But it lacks any cap on how high interest rates can go, and continues the worrying practice of the government profiting off student loans.

As for borrowers who already have loans? Sen. Kirsten Gillibrand, D-New York, has proposed allowing students to simply refinance their old loans at today's historically low rates. It is almost shocking that you cannot do this already. California Democratic Rep. Karen Bass' Student Loan Fairness Act would make repayment fairer and easier.

Young people should be rallying behind the Warren, Bass, and Gillibrand bills. But they can and should demand a whole lot more.

The problem is not just that the cost of borrowing could go up. The real problem is the skyrocketing cost of tuition that is forcing students to take on unmanageable levels of debt in the first place. It is in our leaders' own best interests to do something about that.

After all, millennials will make up one-third of eligible voters in 2020. It is no accident that the two best Senate bills were introduced by senators -- Warren and Gillibrand -- who have been rumored as future presidential candidates.

But at the end of the day, this is not a student issue. It is not a youth issue. This is a corrosive crisis that touches your life whether you know it or not. If you live in the United States of America, this is your issue.

The student debt fight is back -- and it is not going away any time soon.

Follow @CNNOpinion on Twitter.

Join us at Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Van Jones.

ADVERTISEMENT
Part of complete coverage on
updated 10:25 AM EDT, Tue September 30, 2014
The Occupy Central movement has already achieved much by bringing greater attention to Hong Kong's struggle for democracy, writes William Piekos.
updated 10:13 AM EDT, Tue September 30, 2014
As Prime Minister Narendra Modi visits America, Madeleine Albright says a world roiled by conflict needs these two great democracies to commit to moving their partnership forward
updated 10:04 AM EDT, Tue September 30, 2014
John Sutter: Lake Providence, Louisiana, is the parish seat of the "most unequal place in America." And until somewhat recently, the poor side of town was invisible on Google Street View.
updated 9:11 AM EDT, Mon September 29, 2014
Julian Zelizer says in the run up to the 2016 election the party faces divisions on its approach to the U.S.'s place in the world
updated 10:19 AM EDT, Mon September 29, 2014
Ruben Navarrette says Common Core supporters can't devise a new set of standards and then fail to effectively sell it.
updated 9:29 AM EDT, Tue September 30, 2014
Earlier this month, Kenyans commemorated the heinous attack on the Westgate Mall in Nairobi.
updated 4:57 PM EDT, Mon September 29, 2014
David Wheeler says Colorado students are right to protest curriculum changes that downplays civil disobedience.
updated 9:58 PM EDT, Fri September 26, 2014
Sally Kohn says when people click on hacked celebrity photos or ISIS videos, they are encouraging the bad guys.
updated 7:55 AM EDT, Fri September 26, 2014
Loren Bunche says she walked by a homeless man every day and felt bad about it -- until one day she paused to get to know him
updated 9:32 AM EDT, Tue September 30, 2014
ISIS grabs headlines on social media, but hateful speech is no match for moderate voices, says Nadia Oweidat.
updated 8:33 AM EDT, Mon September 29, 2014
A new report counts jihadists fighting globally. The verdict? The threat isn't that big, says Peter Bergen.
updated 5:37 PM EDT, Tue September 23, 2014
Ebola could become the biggest humanitarian disaster in a generation, writes former British Prime Minister Tony Blair
updated 12:58 PM EDT, Fri September 26, 2014
ISIS has shocked the world. But will releasing videos of executions backfire? Four experts give their take.
updated 10:39 AM EDT, Fri September 26, 2014
Eric Holder kicked off his stormy tenure as attorney general with a challenge to the public that set tone for six turbulent years as top law-enforcement officer.
updated 9:09 AM EDT, Fri September 26, 2014
LZ Granderson says Obama was elected as a war-ending change agent, not a leader who would leave behind for his successor new engagement in Iraq and Syria. Is he as disappointed as the rest of us?
updated 5:10 AM EDT, Wed September 24, 2014
Gayle Lemmon says the question now is how to translate all the high-profile feminizing into real gains for women
updated 3:00 PM EDT, Thu September 25, 2014
John Sutter says the right is often stereotyped on climate change. But with 97% of climate scientists say humans are causing global warming, we all have to get together on this.
updated 8:57 AM EDT, Thu September 25, 2014
Andrew Liepman and Philip Mudd: When we declare that we will defeat ISIS, what do we exactly mean?
updated 4:40 PM EDT, Fri September 26, 2014
Thailand sex trafficking
Human trafficking is a multibillion dollar global industry. To beat it, we need to change mindsets, Cindy McCain says.
updated 6:42 PM EDT, Fri September 26, 2014
The leaders of the GOP conferences say a Republican-led Senate could help solve America's problems.
updated 10:01 AM EDT, Thu September 25, 2014
Nicholas Syrett says Wesleyan University's decision to make fraternities admit women will help curb rape culture.
updated 9:02 AM EDT, Thu September 25, 2014
Mike Downey says New Yorkers may be overdoing it, but baseball will really miss Derek Jeter
updated 8:32 AM EDT, Mon September 29, 2014
Quick: Which U.S. president has authorized wars of various kinds in seven Muslim countries?
updated 2:17 PM EDT, Wed September 24, 2014
Women's issues should be considered front and center when assessing a society's path, says Zainab Salbi
updated 2:05 PM EDT, Tue September 23, 2014
A catastrophe not making headlines like Ebola and ISIS: the astounding rate of child poverty in the world's richest country.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT