More Debt & Fiscal Audacity: ObamaCare & Forgiving Student Tuition Loans (video)
Posted By Vicki McClure Davidson on October 30, 2011
Pres. Obama is considering forgiving student tuition loans... to win back the youth vote for the 2012 election
This is the time on the political calendar when the wooing of voters and the unsustainable freebies, the buying of votes, cranks up. So, right on cue, Pres. Obama is now considering the fiscally disastrous and ridiculous idea of forgiving student loans so as to win back the youth vote that has deserted him. Federal student loans have now hit the $1 trillion mark.
The federal government has no business being in the loan business.
Editor in chief Nick Gillespie of Reason.TV discusses with Judge Andrew Napolitano the hidden ObamaCare provisions for student loans and the government’s rampant bailout mentality. Team Obama’s plan will worsen our economic crisis and throw the financial burden, again, on the breaking backs of taxpayers.
Deplorable.
Don’t Bail Out People with Student Loans! Nick Gillespie on Freedom Watch
Posted at Big Government via Glenn Reynolds at The New York Post — The Government-inflated College Loan Bubble:
It’s officially a crisis. Student loan debt has hit the $1 trillion mark, exceeding Americans’ total credit card indebtedness. Unemployed graduates with huge loan balances are camping out in “Occupy” camps — the Hoovervilles of our age — around the nation. And President Obama, perhaps afraid those camps will be dubbed “Obamavilles,” as indeed they have already been by some, has unveiled a new proposal that promises to help graduates who are drowning in debt.
Unfortunately, “promises” is the correct word. Though unveiled with much fanfare, the Obama proposal doesn’t really do much. First, as the Chronicle of Higher Education pointed out in an article characterizing it as mostly political, “The benefit is available only to current students. Those jobless college graduates who are protesting on Wall Street and at similar events elsewhere won’t qualify.”
Second, even for those who do qualify, the benefit doesn’t amount to much. Daniel Indiviglio of The Atlantic Monthly calculated that the president’s plan will save the average grad less than $10 a month. (Even those with $100K in debt will save only $28.50 a month). You can make that sound like more — and the White House tried — by touting total savings over the life of the loan, but this isn’t going to rescue anyone who’s financially underwater. It’s a beer and a slice a month, more or less.
At best, it’s a band-aid solution. The real problem is that we’ve been running a higher education bubble, one that — like the real-estate bubble — has been pumped up by cheap government money. Since 1999, student loan debt has increased by 511%, while disposable income has increased by only 73%.
That’s because when the government subsidizes something, producers respond by raising prices to soak up as much of the subsidy as they can. College is no exception. Tuition has been increasing much faster than disposable income, and families — believing that a college education is a can’t-lose investment, much as they used to think houses were — have been making up the difference with debt. After all, we’re told, student loan debt is “good debt,” because a college degree guarantees more earnings.
Tell it to the Occupy Wall Street protesters, many of whom note that they’re deep in debt for fancy degrees that didn’t get them jobs.
The problem is, “college” isn’t an undifferentiated product. Companies can’t hire enough mechanical engineers, but there’s no bidding war for majors in Fine Arts or Women’s Studies, degrees that cost just as much, but deliver a lot less in terms of employment.
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