Student Loans: Another 'Mis-Selling' Narrative Hides the Systemic Debt Trap
📰 THE STORY: The Financial Times suggests that student loans could be the next 'mis-selling scandal' due to changes in repayment terms and graduates' uproar over escalating debt burdens, hinting at a potential financial liability for the loan providers. 🔍 WHAT THEY'RE NOT TELLING YOU: Historical Context: In 1980, the US government guaranteed student loans, shifting risk from lenders to
taxpayers. This, coupled with the erosion of public funding for higher education (e.g., California's Master Plan for Higher Education, which offered free tuition at UCS and CSUs, was dismantled through budget cuts heavily influenced by neoliberal policies starting in the late 1970s), led to skyrocketing tuition fees. This wasn't 'mis-selling'; it was a deliberate policy shift to privatize the cost
of education, transforming students into revenue streams for banks and universities. Double Standard: Mainstream media decries 'student loan fraud' or 'mis-selling' as if it's an isolated bad apple scenario, yet rarely scrutinizes the underlying ideology of financializing education itself. Contrast this with the swift, indignant condemnation of nations that nationalize industries or provide broad
social services without attaching crippling debt. When countries like Venezuela or Cuba invested heavily in free universal education, it was labeled state overreach, while Western nations forcing young citizens into decades of debt for basic advancement is merely a market inefficiency. Follow the Money: The US student loan industry is a $1.7 trillion behemoth. Major banks like Sallie Mae (now