Posted on 04/20/2012 11:01:18 AM PDT by mandaladon
The Democratic Party is springing a five-year-old political trap that may help President Barack Obama win support from middle-class parents and young voters.
Their trap is the scheduled election-year doubling of interest-rates on government-provided student loans.
The pre-planned doubling forces GOP politicians to either approve a Democratic measure that extends the low interest rates or else face protest from millions of students and their middle-class parents.
Many GOP legislators dislike the subsidized interest rate because it inflates education costs while delivering a disguised subsidy to the Democrats’ political allies in the education industry.
The trap “kinda makes sense,” said Mark Kantrowitz, publisher of Finaid.org, a financial aid website.
“It’s a ‘Heads I win; Tails, you lose,’ scenario, where if President Obama succeeds in getting it extended a for a year he gets a victory for a key segment of the voters [and] if it gets blocked, he can blame his opponents for blocking it.”
“Either way he wins,“ Kantrowitz said.
(Excerpt) Read more at dailycaller.com ...
The Republicans should point out that this is why students now graduate with 100K in debt and that extending this will enslave another generation of students to debt for the rest of their lives. In other words, despite the politics, they should do what is right for the country and those students.
The Republicans should point out that this is why students now graduate with 100K in debt and that extending this will enslave another generation of students to debt for the rest of their lives. In other words, despite the politics, they should do what is right for the country and those students.
So target the parents who actually have to pay the taxes to fund these loans.
Fine, just link it to something that the Democrats will never approve. Like no student loans to Universities that accept tenure. Or have the shortfall come out of the budget of the Department of Education, forcing them to eliminate say 80% of their staff. That way they are the ones who will kill the change.
I pay for my children's college. It's brutal and expensive. By borrowing money to go to college, you might as well just work for the company store. You can no longer make your own decisions on what to do, where to go, and what to spend on what................and oh yeah! Who to vote for.
Doesn’t matter. The youth vote won’t be nearly as big this time around. Laziness, short attention spans, and boredom work against Obama.
It was Obama and the democrats that took competition out of the student loan market and put student loans in full control of the govmt.
There are a lot of Freepers who will crucify me for saying this but the GOP should punt on this one, pass the extension for a year (yes do the WRONG thing) remove the issue from the table and if possible get some concession on something else from from the Rats in exchange. Next spring we will have a GOP president, maybe a GOP senate, and a more Tea oriented majority in the house. Real reform can happen then. No substantial reform can be done now because Obama would veto it. Small stands on principal like this one just give the rats campaign issues that the weak minded middle will fall prey to. To the purist who believes we should not punt here I would simply ask how they are enjoying their Duncan Hunter presidency...
That is so. True. My son was ranked top 10 in hs class, with GPA 3.75, NHS award, etc..., we applied to over 8 colleges this year, from private colleges to state colleges. Whether the sticker price was $49,000 annually for the private colleges to $27,000 for the state colleges (all including R&B), after they all threw in their respective allotments for 'scholarship, grants, etc..', the remaining out-of-pocket borrowing costs for all the colleges 'magically' all leveled-out to about the same for everyone.... $23,000 to $25,000 "per year". You think I'm going to let him get stuck with $100k debt before he even gets a job offer?
He's decided to go to 2-yr County College instead with an academic scholarship, and then transfer to 4 yr school for last 2 years. They all 'inflate' their costs because they expect the students/parents to go into debt.
Double Buffett’s and George Clooney’s taxes to pay for this...they can afford it.
#1 - why was the Federal Government allowed to take over student loans in the first place?
#2 - Why is this a trap for Republicans? How about somebody get a backbone and lay this squarely on the shoulders of the Democrats who bought this in the first place. Oh - I forgot, the GOP has no shoulder (or backbone).
Screw the GOP...
You made the right call. Let the student get a feeling for what they’re interested in for a couple years, then decide which way to go. Govt. should get the hell out of this business. Let competition work its magic.
I agree with you. Let’s hope the GOP agrees also.
Next Spring we will have a Liberal president, regardless of the letter next to his name. So don't get too excited for any real and substantive course corrections from the Whitehouse. Indeed - I fully expect this ship of state to continue on the leftward journey to oblivion.
The Republicans should point out that fewer than 10% of 18-year olds have IQs high enough to make going to college worth anything, and should then point out that if you are one of that 10% and you want to go, you should get a freaking job and pay for it.
And get called flaming RINO's by conservatives in the process.
The GOP faces real conondrums which the base doesn't see. Go for the deal and get whip-lashed by the base, or stand against it and alienate millions of votes which we need to defeat the liberal agenda for the long term.
It's very easy being a keyboard kritic on FR..it ain't easy being a Repub pol especially during election season.
What’s the beef on the low interest rate? If everybody in Congress votes for free money for all the TBTF banks to “strengthen their balance sheets”, why not for student loans too.
Yep; I agree... they could even go one better -- Offer an even lower starting interest rate, with graduated payments, the interest rates of which will rise after they're ostensibly employed.
” There are a lot of Freepers who will crucify me for saying this but the GOP should punt on this one, pass the extension for a year (yes do the WRONG thing) remove the issue from the table and if possible get some concession on something else from from the Rats in exchange”
Yes. Otherwise, the MSM will crucify us, and Obama will just issue “Executive Orders” to do it anyway. The law means nothing to him.
They inflate their prices because, Gov't puts forth loans and grants. But also, you cannot gid rid of a student loan through bankruptcy, like any other loan. So, there is no need for the cost of college to go down, if you can forever go after someone who has a debt.
If a college couldn't get the money, I can guarantee the costs would go down.
Just like health care costs, the problem is that we have health insurance, if there was no insurance, the cost of healthcare would drop instantly.
Sounds like these subprime student loans are the result of predatory lending.
The Pubbies need to point out that these student loans, whether or not the interest rate increases,are the responsibility of Pres. Obama now that he essentioally nationalized them.
THE DEMOCRATS AND OBAMA TOOK FULL CONTROL (ILLEGALLY) OF STUDENT LOANS WHEN HE WAS ELECTED
THIS IS 100% OBAMA’S FAULT
Its worse than that, most of the university are giving away largly useless educations that produce people who are not-employable.
If you ask me the way to reform the collage system to make the collages themselves bare some of the risk. Perhaps making them issue the loans and simply offering a payback plan of 10% of the resulting income a year for the next 20 years.
If the student gets a good job from the education and making enough money for that education to be worthwhile the school will recoup the entire cost of the loan + interest.
If however the school is offering a useless curriculum being sold to our intelectualy most vulnerable they may end up justly going out of business.
We could even make it easy for the collage, the Government will put up the upfront money as it does now, and collect the repayment. But at the end of that 20 years if it doesn’t add up, the bad collage gets the bill.
I have posted this before, but a couple years back I had three stents put in, (Great Doc by the way) the hospital billed Blue Cross about #106,000.00 for that out patient care. Blue Cross paid about $6,000.00 and I was not obliged to pay anything more. figures are my best memory, not exact.
Yes he did. You are correct.
This will backfire on Obama. The Yutes have been dumbed-down too much. They think all the money comes from his ‘stash.
If it stops a’ flowin’ it will only be Obama to blame.
Health care and “higher education” are similarly influenced by government funding. The ongoing campaign to get every student into college inflates the cost. Yet how many high school graduates are REALLY college material (defined as would directly benefit from it, and are likely to get jobs afterwards that would require said education, and will actually succeed in the educational environment)?
Here’s how to deal with this trap: tell Obama, sure, we will reform the student loan program! Put it in your budget.
Obama has no budget.
And, just to remind you folks: the education bubble is a bubble. This student loan program is a government subsidy, but because it is fashioned as a loan program, it does not show up as a direct government expense. But it is a subsidy, just the same.
It is the reason tuition prices have been going up steadily over the decades at a rate faster than general cost-of-living. It has encouraged colleges to turn themselves into the biggest country-clubs in the land. And all this when instructional technology should be making education cheaper!
I have been in higher education, and I know how this works.
When the reckoning comes, pop goes the bubble!
Perhaps you've not noticed the unemployment numbers. Tuition is just as high regardless of the field of study. until there are more reasonably cost higher education options, telling a kind with a high school education to get a job to pay for their $100k or $50k tuition is silly. Newt and Perry have both had solid ideas on breaking this barrier.
The single most constructive thing that could be done about $100K tuitions would be to make sure that if you can't pay it, you don't go.
Subsidizing it is pure insanity.
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