Skip to main content
Part of complete coverage from

A trillion dollar anvil dragging us down

By Van Jones, CNN Contributor
June 6, 2013 -- Updated 1215 GMT (2015 HKT)
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
August 18, 2014 -- Updated 1242 GMT (2042 HKT)
The former U.K. prime minister and current U.N. envoy says there are 500 days left to fulfill the Millennium Goals' promise to children.
August 18, 2014 -- Updated 1310 GMT (2110 HKT)
Julian Zelizer says the left mistrusts Clinton but there are ways she can win support from liberals in 2016
August 19, 2014 -- Updated 1149 GMT (1949 HKT)
Peter Bergen says the terror group is a huge threat in Iraq but only a potential one in the U.S.
August 16, 2014 -- Updated 1734 GMT (0134 HKT)
Mark O'Mara says the way cops, media, politicians and protesters have behaved since Michael Brown's shooting shows not all the right people have learned the right lessons
August 17, 2014 -- Updated 1523 GMT (2323 HKT)
Retired Lt. Gen. Mark Hertling says the American military advisers in Iraq are sizing up what needs to be done and recommending accordingly
August 15, 2014 -- Updated 1941 GMT (0341 HKT)
Marc Lamont Hill says the President's comments on the Michael Brown shooting ignored its racial implications
August 15, 2014 -- Updated 2146 GMT (0546 HKT)
Joe Stork says the catastrophe in northern Iraq continues, even though many religious minorities have fled to safety: ISIS forces -- intent on purging them -- still control the area where they lived
August 14, 2014 -- Updated 2226 GMT (0626 HKT)
Tim Lynch says Pentagon's policy of doling out military weapons to police forces is misguided and dangerous.
August 15, 2014 -- Updated 1315 GMT (2115 HKT)
S.E. Cupp says millennials want big ideas and rapid change; she talks to one of their number who serves in Congress
August 14, 2014 -- Updated 2357 GMT (0757 HKT)
Dorothy Brown says the power structure is dominated by whites in a town that is 68% black. Elected officials who sat by silently as chaos erupted after Michael Brown shooting should be voted out of office
August 14, 2014 -- Updated 1149 GMT (1949 HKT)
Bill Schmitz says the media and other adults should never explain suicide as a means of escaping pain. Robin Williams' tragic death offers a chance to educate about prevention
August 15, 2014 -- Updated 1505 GMT (2305 HKT)
Nafees Syed says President Obama should renew the quest to eliminate bias in the criminal justice system
August 14, 2014 -- Updated 2024 GMT (0424 HKT)
Eric Liu says what's unfolded in the Missouri town is a shocking violation of American constitutional rights and should be a wake-up call to all
August 13, 2014 -- Updated 1922 GMT (0322 HKT)
Neal Gabler says Lauren Bacall, a talent in her own right, will be defined by her marriage with the great actor Humphrey Bogart
August 15, 2014 -- Updated 1056 GMT (1856 HKT)
Bob Butler says the arrest of two journalists covering the Ferguson story is alarming
August 13, 2014 -- Updated 2035 GMT (0435 HKT)
Mark O'Mara says we all need to work together to make sure the tension between police and African-Americans doesn't result in more tragedies
August 18, 2014 -- Updated 2006 GMT (0406 HKT)
Pepper Schwartz asks why young women are so entranced with Kardashian, who's putting together a 352-page book of selfies
August 13, 2014 -- Updated 2308 GMT (0708 HKT)
Michael Friedman says depression does not discriminate, cannot be bargained with and shows no mercy.
August 12, 2014 -- Updated 1251 GMT (2051 HKT)
Mary Allen says because of new research and her own therapy, she no longer carries around the fear of her mother, which had turned into a generalized fear of everything
August 12, 2014 -- Updated 1959 GMT (0359 HKT)
Gilbert Gottfried says the comedian was most at home on the comedy club stage, where he was generous to his fellow stand-up performers
August 12, 2014 -- Updated 2054 GMT (0454 HKT)
Iris Baez, whose son was killed by an illegal police chokehold, says there must be zero tolerance for police who fatally shoot or otherwise kill unarmed people such as Michael Brown
August 12, 2014 -- Updated 1246 GMT (2046 HKT)
Maria Cardona says as he seeks a path to the presidency, the Kentucky Senator is running from his past stated positions. But voters are not stupid--and they know how to use the internet
August 13, 2014 -- Updated 0219 GMT (1019 HKT)
Gene Seymour says the shock at the actor and comedian's death comes from its utter implausibility. For many of us over the last 40 years or so, Robin Williams was an irresistible force of nature that nothing could stop.
August 12, 2014 -- Updated 1951 GMT (0351 HKT)
Soledad O'Brien says the story of two veterans told in a documentary airing on CNN shows the challenges resulting from post-traumatic stress
August 12, 2014 -- Updated 1525 GMT (2325 HKT)
LZ Granderson says we must not surrender to apathy about the injustice faced by African Americans
ADVERTISEMENT