From our friends at ProgressIowa comes yet another disturbing report on how Iowa’s current Republican administration has taken Iowa from being a great place to live and raise kids to a place built for the wealthy and well connected.
“Governor Reynolds and Republicans in the legislature have gutted funding for higher education, and more Iowans are feeling the burden of student loan debt as a result,” said Matt Sinovic, executive director of Progress Iowa. “Every dollar in student loan debt is a dollar not spent in the local economy. If the Governor wants to create a strong economy for every Iowan, she should focus on investment in public services like higher education, not one corporate tax giveaway after another. The $13 billion in student debt held by Iowans would be much better spent in our local economy. Unfortunately, the failed priorities of Governor Reynolds have made that impossible.”
In their recently released “Snapshot on Student Debt” the CFPB, based on consumer information compiled by the Federal Reserve Bank of New York, totaled Iowa borrower’s’ share of the $1.4 trillion plus student loan debt held nationally in 2016 at $13.08 billion. The report also found Iowa consumer complaints filed with the CFPB about their loans and collection practices rose 70 percent from October 2015 to September 2016 compared with complaints between October 2016 and September 2017.
A report issued by the Federal Reserve Bank of New York also shows that rising student debt delays homeownership, and decreases purchasing power, leading to a drag on the economy. The report also says that “A policy decision to fund state higher education can stimulate youth homeownership in the long run.”
Despite the increasing debt load, Gov. Kim Reynolds and the Republican-controlled legislature decreased funding to higher education earlier this year, causing the state’s public universities to increase tuition, which will only deepen the need for students to borrow in order to further their education.
Almost every other country in the world views higher education as an investment in society that will have much greater returns for their society than the investment involved. In America the wealthy who control our society sees post secondary education as yet another way toe squeeze a few dollars from the poor and middle class. Our values in this area are upside down.
Some of the long term effects are noted above – rising student debt delays homeownership, and decreases purchasing power, leading to a drag on the economy. But there are others that are not mentioned. Trying to find any job after college becomes more important causing some to take any job in order to start paying on their debt rather than seeking a job that is a good fit. The need to start payments along with a severing of health care coverage at age 25 also discourages youngsters from starting businesses.
Once again the short term gain of a few greatly outweighs the long term health of the society as a whole.
Unfortunately Reynolds and the Republicans in the Iowa legislature are more concerned about short term give aways to corporations and following the dictates of “trickle down” economics than building a solid economy from the bottom up. Policies like this will make Iowa into Kansas in no time.