Skip to comments.Democrats spring student-loan trap on GOP
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.
Its 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 ...
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.