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Gingrich calls Obama student loan proposal a 'Ponzi scheme'
The Hill ^ | 10/28/11 | Justin Sink

Posted on 10/28/2011 7:10:29 AM PDT by Libloather

Gingrich calls Obama student loan proposal a 'Ponzi scheme'
By Justin Sink - 10/28/11 08:15 AM ET

Newt Gingrich said that President Obama's recently announced student loan proposal was a "Ponzi scheme."

Obama's plan would allow for easier consolidation of outstanding student loans, and would forgive outstanding balances on federal loans after 20 years of payments, rather than 25. Federal loan repayments would also be capped at 10 percent of a borrower's income, lowering payments, down from 15 percent now. The president would also begin implementing the changes next year, rather than 2014 as was currently planned.

But Gingrich says that Obama's plan lies to students "by promising to every young person, 'You won't have to pay off your student loan as a student." Instead, the former Speaker of the House says that those who benefit from the program will just "have to pay off the national debt" as taxpayers later in life.

He went on to say that the proposal was "a Ponzi scheme even by Gov. Perry's standards."

Gingrich was speaking at an education forum in New York attended by a number of Republican candidates.

Michele Bachmann also criticized the plan at the forum, saying it created a "moral hazard."

"There is a morality in keeping our financial promises, and I don't think we should push that off onto the taxpayer," Bachmann said. "The individual needs to repay and be responsible for repaying their student loan debt."

The Minnesota congressman also echoed comments by Speaker John Boehner (R-Ohio), who said Thursday he was concerned about the constitutionality of the administration's decision to change rules without congressional approval.

"I believe it is abuse of power from the executive to impose via an executive order a wholesale change in the student loan," Bachmann said.

TOPICS: Crime/Corruption; Extended News; Government; News/Current Events
KEYWORDS: boondoggle; college; gingrich; loan; loans; ponzi; student; tuition
..."have to pay off the national debt" as taxpayers later in life.

“You can pay me now or you can pay me later.”

1 posted on 10/28/2011 7:10:31 AM PDT by Libloather
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To: Libloather

I always wondered why it was so important to Obama for the feds to take over the student loan system. Now I know. It was a long con.

2 posted on 10/28/2011 7:16:34 AM PDT by ChocChipCookie
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To: ChocChipCookie

The cincher is working for the government....

3 posted on 10/28/2011 7:21:22 AM PDT by Sacajaweau
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To: Libloather

4 posted on 10/28/2011 7:39:16 AM PDT by Don Corleone ("Oil the the cannoli. Take it to the Mattress.")
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Our Heritage

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The Men Left Bloody Footprints In The Snow..............

5 posted on 10/28/2011 7:58:44 AM PDT by DJ MacWoW (America! The wolves are here! What will you do?)
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To: Libloather
There's one small part of Obama's plan I agree with. Students should be able to consolidate their loans. They should also be allowed to re-finance them just as homeowners can do so when a lower rate is out there.

When I was a student, I was given the chance to reconsolidate my loan only one time and the rate was lock in at 9%. A couple of years later, when the rates dropped down, I was locked out of refinancing it, which I feel was punitive and unfair.

I am fortunate that I was able to get it paid off well before the 20-25 years so I am no longer a slave to the student loan monsters but a lot of people aren't that fortunate.

6 posted on 10/28/2011 9:18:18 AM PDT by Tamar1973 ("Never care what the other guy has, it is not yours and someone always has more."--isthisnickcool)
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To: Tamar1973
I agree with you about the consolidation, or rather the ability to refinance when the rates are low.
7 posted on 10/28/2011 3:43:07 PM PDT by shatcher
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