Skip to comments.Screw U.: Government inflated the college loan bubble, but Obama isnít fixing it
Posted on 10/30/2011 7:29:11 PM PDT by SeekAndFind
ts 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 doesnt 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 wont qualify.
Second, even for those who do qualify, the benefit doesnt amount to much. Daniel Indiviglio of The Atlantic Monthly calculated that the presidents 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 isnt going to rescue anyone whos financially underwater. Its a beer and a slice a month, more or less.
At best, its a band-aid solution. The real problem is that weve 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%.
Thats because when the government subsidizes something, producers respond by raising prices to soak up as much of the subsidy as they can.
(Excerpt) Read more at nypost.com ...
And of course, remember that virtually every dollar spent on education is subsidized by the American taxpayer - public colleges far more than private, but both are enjoying the largess from the treasury. If you count education tax credits and earned income tax credits, it’s even more subsidized, and many of these graduates are exiting the education system with zero skills needed for landing or keeping a job in the private sector.
And this is after the $109k spent on primary education per student (California numbers, 2010 ADA breakdown, average for all students in California).
This article nails it. It doesn’t take a genius to realize all the government subsidies and handouts, like Pell grants, for folks to attend college have driven up the cost. We have a massive education bubble going on, and we’ve reached the point where the value of most degrees just isn’t worth the expenditure. Of course, business shares some of the blame when it demands credentials for jobs that the vast majority of high school graduates could do with some on the job training. This house of cards is doomed to collapse sooner or later.
There is only one solution to this problem... print money.
As I’ve said before, this (colleges, universities, small colleges, etc.,) are the democrats MAIN BASE. The reason for the age 26 Phoney-Care exemption. Without this base, they lose.
Just think of it as the bribes you have to pay to get a government job.
1. Colleges and Universities hike tuition 8% a year, every year, to pay for high salaries for wack job administrators and employees who are hired by their liberal friends. Academia is a scam.
2. Almost every College and University offers "McDegrees" like Womens Studies, Queer Theory, Black Studies, or some other garbage major. To be Politically Correct, they hire scores of useless liberals to fill the faculty to teach this rubbish.
3. Colleges and Universities have two prices, on for "whitely" or Asian students, and another one for blacks and Hispanics. The latter groups get a free ride.
We should be protesting the greedy colleges/uni for charging their services so high
$97 Bucks a semester at San Jose State for anything over 12 units. I got the G.I. Bill of $305 a month, which was plenty of beer money. Oh, I also worked in a warehouse for a furniture store. Russell’s Furniture. The owners would pick up the tab for books for all of us college kids working there. Now that was a DEAL! He didn’t have to do that, but he did. What a perk that was! More Beer all around! This was post 1983, so it wasn’t ancient history. (Or was it?)
Look on the bright side. Inflate it, and it will end before long. Try to manage it and keep it going along with all of the other debts, and it will go on much longer. Help Lefty run it up, then repudiate it. Shut the spending down. Use Tai Chi and Kung Fu on that spending. Give it a helping push, then stomp on it.
” - - - Occupy camps — the Hoovervilles of our age - - - “
I like the image created by the above quote, but prefer the term “Obamavilles.”