There's a certain poetry to the notion that the remnants of the housing bubble might be used to ward off the next financial catastrophe facing the middle class: the looming student loan bubble.
But it's not a very soothing verse, nor is it a valid notion.
On Thursday, Missouri Attorney General Chris Koster came to St. Louis to outline the financial settlement reached by attorneys general in 49 states that will offer some financial relief for homeowners who either lost their homes to foreclosure or are paying for mortgages in which they owe more than the home is worth.
Five of the nation's biggest banks will pay $25 billion as a punishment for their role in the crisis that still grips much of America's middle class. Illinois gets about $1 billion; Missouri, $195 million.
It's good that the banks that played such an oversized role in causing the crisis will pay a price.
But it's really too little too late. Even $25 billion is a drop in the bucket when Americans have $700 billion in underwater mortgages.
Some folks who lost their homes will get a check for $2,000. They won't get their homes back.
Others, barely hanging on to their mortgages, will be able to refinance at more reasonable rates, perhaps reducing their payments to a sustainable level.
But then, if they've got a kid in college or hope to send one there, the other shoe will hit.
Tuition at public universities in Missouri is about to go up. Again. Gov. Jay Nixon had proposed cutting the state's higher education budget by 12.5 percent. Most universities have been mulling tuition increases in the 7 percent range.
Mr. Nixon knows this is bad for the middle class. On Thursday, as Mr. Koster was in St. Louis, Mr. Nixon was meeting with reporters, editors and publishers at an annual gathering in the Governor's Mansion. He lamented the coming student loan bubble, noting that last year the level of student loan debt in the nation surpassed credit card debt for the first time.
Mr. Nixon plans to use $40 million of the mortgage settlement money to ease the planned cuts for colleges and universities. Now their budget cuts might be closer to 3 percent. Mr. Nixon hopes this means tuition hikes will be no higher than the increase in the Consumer Price Index.
The annual two-semester tuition for Missouri residents at the University of Missouri's flagship Columbia campus now is $8,928, not counting room and board, books and supplies. The CPI last year rose 3.2 percent. If it rises the same amount this year, that would amount to a tuition hike of $285.
If you apply the increase to the entire cost of attending the university for a year, $22,216, the increase would be $710 per year.
That's serious money for folks in the middle class taking out student loans they can't pay back even as they get minor relief for the mortgage loans they also can't pay back.
Still, the mortgage settlement is a step in the right direction. So is the decision to restore some higher education funds. Still, both, massive problems remain, and our state and national governments no longer seem capable of, or even interested in, dealing with them.
Economic bubbles are colliding. One appears to be deflating; the other is yet to pop.
