The $ 1 Trillion College Debt Bubble – Foist It on the Taxpayer

0
Share

 

Obama has promised a new initiative a week. Each initiative will be in line with Obama’s ideology and each will cut away at our freedoms. When Obama talks about income inequality, he is talking about redistribution, which is a Marxist tenet.

The college loan initiative is one that nationalizes the trillion dollar college loan industry, puts the debt on the back of taxpayers, forces banks out of the college loan business, provides more free money to students regardless of ability and commitment, and forgives loans. If students go into default, what do we get in return? Can we pull their diplomas off their walls?

You can’t run a business like this. Only the government with its hands in our pockets can be this generous. It also puts more graduates into the public sector.

Students will be forced to work for the public sector to get loan reductions under this plan. Obama is not private sector.

Fox News Reports::Obama’s early legislative initiatives was to have the federal government take over the student lending business in America.

Obama is now seeking to use that new power to obtain a taxpayer-financed stimulus that Congress won’t approve. As he said, he wants to ignore Congress.

The idea is to cap student loan repayment rates at 10 percent of a debtor’s income that goes above the poverty line, and then limiting the life of a loan to 20 years.

Take this example: If Suzy Creamcheese gets into George Washington University and borrows from the government the requisite $212,000 to obtain an undergraduate degree, her repayment schedule will be based on what she earns. If Suzy opts to heed the president’s call for public service, and takes a job as a city social worker earning $25,000, her payments would be limited to $1,411 a year after the $10,890 of poverty-level income is subtracted from her total exposure.Twenty years at that rate would have taxpayers recoup only $28,220 of their $212,000 loan to Suzy.

Obama will also allow student debtors to refinance and consolidate loans on more favorable terms, further decreasing the payoff for taxpayers.Obama’s move comes at a moment when many economists are warning of a college debt bubble that is distorting college tuition rates and threatening to further damage credit markets. The president’s move is intended to make college more affordable for more people, which will, in turn allow universities to jack up their rates.Remember: This is the same guy who pretends he’s concerned about “spending within your means.”

The Health Care bill that passed the House today includes the reform of student loans, taking over Sallie Mae by barring future government guarantees of most private student loans at a cost of $100 billion a year. What is a college loan program doing in a healthcare bill? I’m real tired of these deals being made.

I have complained about the wild spending of colleges and this change will only encourage them to do more of the same. College costs will continue to rise because the taxpayer is on the hook for it.

Obama and his envoys are taking this message to high schools and colleges so they will be strong supporters come election time. One lure discussed in the video is $2500 a year for community college, up to $10,000 per student for four years and it doesn’t matter if you are a bad student. It’s for all students so the ones who do not achieve can drink and party for four years.

From Mark Steyn: The administration wants to nationalize the $1-trillion college loan market…At taxpayer expense, they want to cap the percentage of income that former students pay on their loans and lower forgiveness of student loans by lower-paid former students from 25 years to 20 years. But, if the former student works in the public sector for 10 years, the balance of the loan would be waived:

1. Very nice for former students who take virtually useless curriculums.

2. Even nicer for those who take government jobs, where average wages and benefits are now higher than in the private sector.

3. And, even nicer for government union allies.

4. Also very nice for the heavily liberal college faculties and administrators who can continue to charge high tuitions and delay inevitable modernized instruction and conferencing without the posh, big fixed cost campuses.

5. Not so nice for taxpayers, as with this latest proposal, politicians find ways to pay off their constituencies whenever they get a hold of another money stream or power. The takeover of the student loan market, says the Congressional Budget Office, might save up to $47 billion over 10 years, especially the CBO says if defaults don’t increase. The latest proposed, in effect, giveaway “defaults” via lowered repayments and waivers of repayment, not yet scored by the CBO, will eat up much of or more than that to buy off political backers and buy votes. Take a look at this map of which states have the highest average student debt. Overlay which states are “blue” and you can see which states’ residents stand to get the most bailouts from their student loans.

As the New York Times reports, “Most U.S. Union Members Are Working for the Government, New Data Shows.”

According to the labor bureau, 7.2 percent of private-sector workers were union members last year, down from 7.6 percent the previous year. That, labor historians said, was the lowest percentage of private-sector workers in unions since 1900.

Among government workers, union membership grew to 37.4 percent last year, from 36.8 percent in 2008.

And, government employment is the only major sector with job growth. “Notwithstanding the recession, government employment grew last year, inching up 16,000, to 22,516,000, according to the bureau.”

Rather than reflect on the growth of their union allies in government jobs, where most states and localities are cutting back basic services in order to pay their salaries and benefits, the Labor Secretary instead sees the answer in expanding the ease for unions to expand in the private sector via “card checks” that obviate the secret ballot and further increase their members in the public sector.

Meanwhile, those former students who take private sector jobs, who actually generate the taxes to support government workers, are second-class citizens, schlubs or blockheads, for not feeding at the federal teat and supplying the milk for those who do.

Obama’s social justice and redistributive socialism will permeate every aspect of our lives. More and more people will be included and those people will support Obama for his efforts come election time. Since we are broke, the freebies will come to an end, but in the meantime, nationalizing school loans and forgiving loans owed is a great move towards the Enormously Big Government Obama has planned for us.

As an aside, has anyone noticed that the OWS signs are perfectly in line with Obama’s plans. for instance, the anti-college loan, anti Sallie Mae message is on signs everywhere on Wall Street. This is more evidence that they are Obama’s campaign workers.

Eventually the borrowing and printing of money must end and, when it does, we will be Greece.

Share