Sure, but it’s from Obama’s policies, not student loans.
President Obama used remarks at the University of Michigan in Ann Arbor on Friday to discuss the crushing student-loan burdens faced by many college graduates. While it’s certainly a great goal to make quality education accessible to all Americans, the way to do it is to make education market-based and stop the government from distorting prices and propping up demand.
Capping student-loan payments at 10 percent of monthly income, or threatening to reduce federal aid to colleges that don’t put artificial caps on tuition, would do nothing to address the problem of skyrocketing education costs in this country. While the federal government should be out of the education business completely, Obama’s proposals will make a broken system worse.
President Obama’s rhetoric appeals to the populist narrative that student loans are symptomatic of an unfair system that betrays the American way, which would offer everyone the same shot at wealth and prosperity. His rhetoric on student debt, and more importantly his policies on it, amount to nothing more than a brazen attempt to bribe college students for their votes with our tax dollars.
Instead of constantly pumping more money into an already distorted education market, government should do everything it can to get out of the way, allow free-market competition between lenders, schools, and students, and focus on the real student debt: the $48,000 Americans owe to the federal government at birth, twice the average debt owed by college graduates. It’s made worse every day by policies that have ballooned the national debt by trillions since Obama took office in 2009.
President Obama’s focus on student debt is his attempt at a political sleight of hand with students: ignore the massive debt you already owe by no fault of your own, and focus on this debt half its size that you incurred by choice.
— Chris Chocola, a former congressman from Indiana, is president of the Club for Growth.
"Sure, but it’s from Obama’s policies, not student loans."
Yes... but...
I'm going to have to say that it's both, especially when I'm paying back about 120K of student loans. Before anyone asks, yes, it's my own fault for racking that up for a stupid bachelor's degree - my own fault and no one else's.
Reply to this commentLinkReport AbuseIf costs are skyrocketing, we're going to need price controls. I'm sure liberal academia will be all for it.
Reply to this commentLinkReport AbuseSince Obama is using interest from Government-sponsored student loans to pay for Obamacare, I don't think it's too likely government will be getting out of the Educational Loan business
Reply to this commentLinkReport AbuseInterest on student loans is used to pay for Pell Grants. Obama does not appropriate, congress does.
Reply to this commentLinkReport AbuseUm, no, it's the loans.
When kids are pushed and shamed at every corner by their teachers, counselors, principals, parents, and friends into believing that college is the ONLY respectable option after graduation, how can we blame them for the debt they naively take on? As a teacher I witness this daily; the kids ate given only one message and it is loud and clear - go to college or you are a loser. I was almost fired my first year for telling my classes that maybe half of them should not be thinking of college.
Forget loan policies and all that blather - focus on dis-incentivizing schools to go for high college bound rates.
Reply to this commentLinkReport AbuseSomeone check my math, but if the Feds are spending about $12,000 per year per citizen and the deficit is 40% of spending, then each of us is going about $5,000 further into debt each year. It's all college loans, all the time, for everyone! (When I went to college, at arguably the nation's finest private university (reasonable people may disagree) it cost just about $5,000 per year. Tuition, room and board.)
Reply to this commentLinkReport AbuseAnd, as an alum, do you think anything has happened to justify the price rising eight-fold?
I didn't think so.
You went to Vanderbilt? How did you like Nashville?
I'm jealous only because I still have never been to the Grand Ole Opry.
:)
Reply to this commentLinkReport AbuseI graduated univeristy at the age of 23. I did that by living at home, working full-time (3rd shift, menial labor), commuting to school, and paying tuition as I went; no student loans, no grants, no financial aid, no scholarship, and no subsidy from my parents other than a roof over my head. At the age of 22 I made a mistake of getting involved with someone who was functionally incapable of doing that, someone who failed to understand that it is infact possible to get a degree without a penny from parents, government, the school, or a bank. As a result, that person's outlook on education and personal entitlement (due to the enormous subsidy that person received from government) reduced that human being to a lifelong voter for the Democratic Party. So what President Obama was saying was in fact, by design.
My way of higher education was the way it used to be. For far too many students today, they fail to grasp that their own power of achieving that goal is infinate.
Reply to this commentLinkReport AbuseI and all 962 of my Annapolis classmates received an enormous subsidy from the government in the form of free everything, plus a small paycheck, plus a guaranteed job at graduation. But I'll bet you that a fairly small minority of us are lifelong voters for the Democratic Party. Simply being the beneficiary of a subsidized education doesn't necessarily make one automatically favor liberal policies.
Reply to this commentLinkReport AbuseThe challenge is that if we get the Govt out of the student loan business we will have to let banks make informed decisions on what students they will decide to loan money too.
Chances are that the banks will only be willing to loan money to good students who keep up their grades and stay on track to graduate with a degree in a serious subject from a serious institution.
If that happened what would all of the Gender and Ethnic Studies Professors do for a living.
Reply to this commentLinkReport AbuseA student may still opt to get a loan through a private lender and due to limits on federal loans most students do. Banks choose only to lend to students who have co-signers with adequete credit (those who do not really need financing), they do not care what you study.
Reply to this commentLinkReport AbusePlease help me think of the proper adjective to describe those who feel justified to charge $40,000/yr. -- and rising -- for a watered-down, part-remedial education, and who likewise claim to be morally superior to everyone else out of their level of overflowing compassion and benevolence for those at the lower socioeconomic strata.
It's been a long day, and plumbing my brain or a thesaurus at this hour for the proper word to describe such twisted thinking is out of the question.
Reply to this commentLinkReport AbuseHmmm. Am I the only one who remembers that Carter slapped price limits on gasoline in the 70s? Am I the only one who remembers waiting in lines for hours for a few gallons of gasoline. We all know that's what happens when you control the price of something, there's less of it.
And I can't be the only one wondering how shrinking supply (imposing price controls) will increase supply (affordable education for everybody).
Reply to this commentLinkReport AbuseNo, I remember it well. Not only did I wait in gas lines with my mother and brother after school, but we were restricted to even/odd days depending on the digits of your license plate.
Reply to this commentLinkReport AbuseI don't know why anyone would willingly acquire a massive debt for a four year degree (and yes, you should have the degree in four years) when there are state universities for 1/4th the cost of those big high charging universities.
Reply to this commentLinkReport Abuse"Sure, but it’s from Obama’s policies, not student loans."
Chocola failed to explain how Obama's policies, over his three years in office, have caused current student debt.
Btw, it's estimated that the effect of a college education on a person's lifetime income is something on the order of a million dollars. That's the equivalent of investing about $200K now. Should private universities be giving away something that's worth $200,000 for $50K or $100K? Or should they be charging what the service they provide is worth? How about public universities?
Reply to this commentLinkReport Abuse"While it’s certainly a great goal to make quality education accessible to all Americans,"
I'm tired of the above always-emplaced qualifier; I don't give a R'sA if everyone doesn't have college available to them.Who says they're supposed to?
Reply to this commentLinkReport AbuseThe vast majority of college degrees aren't worth the sheepskin they used to be printed on.
Reply to this commentLinkReport AbuseIt's economically laughable to insist on caps on re-payments, after the debt has been incurred in the first place. The reason the debt has been incurred is a) we've been sold on the idea that every single human being on the planet can and will benefit from spending 4 years and a hundred K on a college degree, and b) the federal government protects educational institutions from having to make hard choices because they help fund, in large part, the tuition costs. Colleges have more applicants than they can matriculate. When your demand exceeds your supply, you can happily raise your rates and people will still buy your product.
Why is there no talk of price gouging at colleges? Why is there no Congressional committee charged with reviewing and reforming higher education funding? Why are private businessmen vilified for making hundreds of thousands of dollars per year, but college presidents make the same kind of money? Why do college administrators make 100K per year for performing what are essentially office duties?
Why? Because there's a line of customers out the door for a product with diminishing returns, and the federal gov't supports the status quo at every opportunity it gets. It won't change until people realize that they're not ever going to get their money's worth from a college that charges them in excess of 100K for a degree that might be entirely useless in the real world.
Reply to this commentLinkReport AbuseIncome based repayment (IBR) is a Bush administration policy. Last summer the GOP controlled house voted to allow caps to be reduced to 10% of discretionary income starting in 2014, President Obama merely moved that date forward.
The cap is placed on a monthly payment, not the overall balance, in fact IBR increases the balance dramatically. My putting less funds towards the principal a borrower is increasing the amount subject to interest monthly.
This past summer there were attempts to place more regulations on educational costs with the Gainful Employment (GE) provision. Lobbyists successfully watered down the final product and will likely show little results to the worst offenders of the federal aid system.
Higher education professionals have a lot of regulations that they need to follow and while 90% do not make 100k a year their services are necessary in order to insure that all regulations are followed. Each year the financial aid handbook detailing regulations a school must follow contains over 100 NEW pages and is given in the middle of the academic year, after all budgets have been sculpted.
Look up "financial aid counselor" on a salary estimating website and you will know how much these college administrators who perform "basic office duties" make.
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