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Terminate the Racket of College Loans
Townhall.com ^ | June 12, 2012 | Phyllis Schlafly

Posted on 06/12/2012 5:40:43 AM PDT by Kaslin

One of the ways to cut the big-spending binge engaged in by the federal government is to terminate the racket of college loans. It's counterproductive, discriminatory and a bad investment for both taxpayers and students.

College-loan debt has soared to nearly a trillion dollars, more than credit-card debt or auto-loan debt. Financial commentators are beginning to compare college-loan debt to the housing bubble that nearly brought down the banking system in 2008.

However, it's not the banks that will be the big losers if the bubble bursts. It's the taxpayers, because the government is now on the hook for the majority of student loans.

Even worse is the burden on students. The debt requires students to keep paying for a product that lacks its advertised value either in education or employment opportunities. College education has been dumbed down to enroll more and more taxpayer-subsidized students, even if they take only remedial (aka high school) courses.

College-loan debt is a powerful deterrent to marriage and to getting on with life. Students cannot discharge the debt in bankruptcy, can't get a job that justifies the loan and may have had a lousy education.

For years we've heard the propaganda line that everyone should go to college and that a college degree will improve your status in life and standard of living. Not any more. In Obamaland, 53.6 percent of young college graduates are jobless or working jobs that do not require a college degree and don't pay enough to retire the debt.

Making college loans more generous and easier to get does not make college more affordable. The easy availability of loans encourages colleges to raise tuition rates faster than inflation in order to rake in more taxpayer money, while discriminating against those thrifty enough to pay their own way.

The entire structure of college loans is discriminatory. It forces people who don't want or are not able to go to college or who work to pay their own way, to contribute taxes to support those who go to college at other people's expense, often at pricey elite colleges.

College loans seem to be based on the same pie-in-the-sky fiction that going into debt to buy a house you can't afford is a good investment and will make you a worthier citizen. That's another expensive lie told to gullible people by bankers and bureaucrats who should have known what they were doing.

Then there's the problem, as reported by the Washington Post, that nearly 30 percent of students with student loans drop out of college with debt but no degree. Of those who remain in college, the majority take five or six years, thus significantly increasing their debt.

This wastes some of what should be the most productive years of an American's life. When I went to college, carrying a full load of classes, I worked a 48-hour week to pay my own way, and I can't figure out what today's college students do with their non-study time.

Why do spokesmen of both political parties keep urging us to import more and more foreign college students and falsely tell us they are "the best and the brightest"? And why do we let jobs subsidized by U.S. taxpayers go to foreigners?

In 2010, Obama gave $300 million of his stimulus money to two Michigan plants to build electric car batteries. It turned out that the plants are owned by Koreans who outfitted their factories with Korean equipment and supplies and hired Korean workers.

Another major problem for students is that, having incurred all that indebtedness, most colleges today are a hostile environment for conservatives and Christians. A new report by the National Association of Scholars called "A Crisis of Competence: The Corrupting Effect of Political Activism in the University of California," explains that college graduates are alarmingly ignorant about history, literature and constitutional government because many professors have replaced real teaching with political indoctrination.

Another cause of higher tuition rates is paying high-salaried professors to teach worthless subjects that might justify one lecture but are not worth the price of a semester course. Let's hear demands that wealthy colleges use their extraordinary endowments to pay off college loans and thereby make restitution for teaching left-wing propaganda masquerading as education.

Obama is not doing you a favor when he gives you a college loan. It's hard to avoid the conclusion that college loans are part of Obama's policy to make as many as possible dependent on government, as well as to deceive us by keeping young people out of the unemployment statistics and in the totals of those attending college.


TOPICS: Culture/Society; Editorial; Government
KEYWORDS: college; debt; loans; tuition

1 posted on 06/12/2012 5:40:49 AM PDT by Kaslin
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To: Kaslin

One of my college professors told me: “You won’t believe what they pay me. It’s ridiculous.” The guy was a great teacher. Some of my others just plain stunk.


2 posted on 06/12/2012 5:54:39 AM PDT by Sacajaweau
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To: Kaslin

All this is too true and cannot possibly be overstated or exaggerated!

Creating gargantuan debt for young people is NOT the answer!

Passing this default and indebtedness on to the same taxpayers, whose money paid for their ‘education’ in the first place, is shamefully unethical and absolutely punitive way to resolve the problem, when you think of what it means to working Americans who are trying harder all the time JUST to get by.


3 posted on 06/12/2012 5:57:50 AM PDT by SMARTY ("The man who has no inner-life is a slave to his surroundings. "Henri Frederic Amiel)
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To: Kaslin

Get rid of federal financial aid and watch the cost of college plummet. Getting rid of this ridiculous notion that people who don’t go are failures will also drive down costs.


4 posted on 06/12/2012 5:58:53 AM PDT by tfecw (It's for the children)
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To: Kaslin

Stop me before I kill again.


5 posted on 06/12/2012 6:12:07 AM PDT by AppyPappy (If you really want to annoy someone, point out something obvious that they are trying hard to ignore)
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To: Sacajaweau

If it is a state school, you can go to the library and look it up.


6 posted on 06/12/2012 6:12:56 AM PDT by AppyPappy (If you really want to annoy someone, point out something obvious that they are trying hard to ignore)
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To: Kaslin

Are student loans sent directly to the student or the school?

A girl my son knows has been living high on the hog for the last three years with no visible means of income but we do know she gets student loans to pay for school that she never seems to attend.

She’s thrown herself a $10,000 wedding for 55 guests, they travel/vacation frequently and she goes shopping almost daily. Her husband works at Walmart so we know it isn’t HIS paycheck making all this possible!


7 posted on 06/12/2012 6:13:40 AM PDT by nodumbblonde ("The ladder of success is best climbed by stepping on the rungs of opportunity." - Ayn Rand)
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To: Kaslin

Excellent summary.

This unjust aspect of govt-backed college loans is rarely considered:

-—The entire structure of college loans is discriminatory. It forces people who don’t want or are not able to go to college or who work to pay their own way, to contribute taxes to support those who go to college at other people’s expense, often at pricey elite colleges.-—

I get sick when I think that some hard-working mechanic is paying for Johnny to attend Binge-Drinking U.


8 posted on 06/12/2012 6:16:46 AM PDT by St_Thomas_Aquinas (Viva Christo Rey!)
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To: Kaslin

Excellent summary.

The following unjust aspect of govt-backed college loans is rarely considered:

-—The entire structure of college loans is discriminatory. It forces people who don’t want or are not able to go to college or who work to pay their own way, to contribute taxes to support those who go to college at other people’s expense, often at pricey elite colleges.-—

I get sick when I think that some hard-working mechanic is paying for Johnny to attend Binge-Drinking U.


9 posted on 06/12/2012 6:19:52 AM PDT by St_Thomas_Aquinas (Viva Christo Rey!)
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To: tfecw

“Get rid of federal financial aid and watch the cost of college plummet. Getting rid of this ridiculous notion that people who don’t go are failures will also drive down costs.”

Watch a significant number of schools close, watch the disparate minority impact, as schools and predominant majors of minorities disappear, watch rents in university towns plummet, watch unemployment in university towns rise.

These are all inevitable results of this. I think getting rid of “easy” money in college (gov’t loan guarantees) is a good thing - but there will be a huge amount of whining that goes along with it.

Chapter 7 and Chapter 13 bankruptcy absolutely should apply to student loans, as it does for virtually all other debts. It will prevent both students and lenders from this sort of problem in the future.


10 posted on 06/12/2012 6:23:07 AM PDT by RFEngineer
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To: nodumbblonde

Federal Loans are disbursed by the school to the student accounts. Once tuition and any other charges (books, room and board etc) are paid for the student gets a “refund” of the extra monies.

If you don’t need or want the full loan awarded, you can adjust the amount you take.


11 posted on 06/12/2012 6:24:41 AM PDT by PrincessB (Drill Baby Drill.)
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To: Kaslin

The government financing college loans just drives up the cost and reduces the quality of education. Just like with any other free market interference, it puts more distance between the vendor and the consumer, insulating the vendors from the proper consequences of incompetance. It also blunts the natural competition between institutions, since there is a never-ending supply of customers to go around. Also, it diminishes the value of a degree by making them more commonplace, which weighs against any potential benefit to be claimed in regards to the higher number of college graduates.


12 posted on 06/12/2012 6:26:25 AM PDT by Boogieman
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To: Kaslin

It’s a Democrat funding mechanism

Make huge loans available to students
Schools raise prices to scoop up the gravy
Schools pay legions of profs and admins excessive salaries
Liberal profs and admins donate to Democrats

and repeat


13 posted on 06/12/2012 6:27:10 AM PDT by nascarnation
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To: PrincessB

Thanks for the info!


14 posted on 06/12/2012 6:27:40 AM PDT by nodumbblonde ("The ladder of success is best climbed by stepping on the rungs of opportunity." - Ayn Rand)
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To: St_Thomas_Aquinas

“-—The entire structure of college loans is discriminatory. It forces people who don’t want or are not able to go to college or who work to pay their own way, to contribute taxes to support those who go to college at other people’s expense, often at pricey elite colleges.-—”

It also forces the tuition of those who pay or borrow money to go up to fund favored minorities free-rides.

I’ve been trying to arrange a meeting with the CFO of the university my son attends to underscore this and many other points. He’s agreed to meet, but is avoiding scheduling the meeting.

I have the university financials. I’m an engineer not an accountant, but even I can see that raising the price will not stem the demonstrable drop in enrollment of premium-paying out-of-state students. “Private-Public Partnerships” to provide over-priced housing are long term debt that will not be paid if they can’t continue to raise tuition by 10% per year (which requires loans forevermore), and universities simply pool tuition and room-and-board and “mandatory fees” in the end and then subtract costs.

Administrative costs, academic support always grows faster than inflation - and.....the portion of tuition-paying students that goes to “financial aid and scholarships” is steadily increasing.

That’s just one example - but I’m sure it’s widely applicable


15 posted on 06/12/2012 6:30:24 AM PDT by RFEngineer
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To: St_Thomas_Aquinas

Nobody is paying for my MBA. I am.


16 posted on 06/12/2012 6:31:21 AM PDT by goseminoles
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To: Kaslin; metmom; Yashcheritsiy
Imagine what a Secretary of Education, Newt Gingrich, in a Romney Administration will be able to do about this.

Think something where we start with "pay for placement."

For the time the Dept of Ed is still allowed to exist (the ultimate intent is to kill it, of course, but even Bill Bennett was able to use the Dept of Ed to publish the famous "Nation at Risk" expose of American education failures back when he served as Sec'y under Reagan), and under penalty of perjury mandate that schools report the number of students who start but never finish school at their institutions, and report post-graduation success of graduates landing a job in the student's field of study.

Assemble a data base which is available on line that ranks the success or failure of institutions. Identify the professors who teach courses with an ability for interested parties to be able drill down to personal biographies. Associate those bios with employment success rates of students who took their classes. Publish that ranking. Make schools receiving public money report the salary and total compensation of all employees, much as is done with Gov't general schedule personnel.

It will lay bare the failure rates of multicultural basket weaving degrees, those schools who schedule and market them, those professors that teach them, and how much they fleeced the system to teach them at all. Expose the liberal foundations and "nonprofits" that prop up such programs with their $.

On the flip side, incentivize schools who attract and teach students in traditional studies which include math, sciences, engineering, etc.

It's a starting place.

FReegards!


17 posted on 06/12/2012 6:36:05 AM PDT by Agamemnon (Darwinism is the glue that holds liberalism together)
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To: Kaslin
Whenever the government subsidizes something, the price goes up and the quality goes down.
Too few care about the cost when "someone else" is paying.

How come nobody calls out the colleges for their price gouging?

18 posted on 06/12/2012 6:36:41 AM PDT by BitWielder1 (Corporate Profits are better than Government Waste)
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To: BitWielder1
How come nobody calls out the colleges for their price gouging?

Since it's a liberal funding ploy (see my post 13), the MSM certainly isn't going to attack it.

19 posted on 06/12/2012 6:40:15 AM PDT by nascarnation
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To: Kaslin

Very little of what is taught in college can’t be done on-line, without the massive expense of a brick and mortar campus. College is largely a business that exists to provide employment for those working in the business of college.


20 posted on 06/12/2012 6:48:44 AM PDT by vortigern
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To: Kaslin

It’s hard to avoid the conclusion that college loans are part of Obama’s policy to make as many as possible dependent on government....

^^^
C’mon, Phyllis, you are leaving out yet another goal, i.e., to predicate a bail-out that will damage the economy even more.


21 posted on 06/12/2012 6:51:21 AM PDT by Bigg Red (Pray for our republic.)
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To: Kaslin

The Democrats have here created the political equivalent of “In Case of Fire, Break Glass”.

Their ace in the hole is that they can propose to forgive the outstanding debt burdens at any time their backs are really up against it and they are in danger of losing their power.

I expect to hear the sound of breaking glass by October.


22 posted on 06/12/2012 7:07:11 AM PDT by Buckeye McFrog
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To: BitWielder1

AMEN!!!! BIG COLLEGE!!!! What a Racuet!!


23 posted on 06/12/2012 7:10:20 AM PDT by Ann Archy ( ABORTION...the HUMAN Sacrifice to the god of Convenience.)
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To: Kaslin

My son the doctor got out with $200000 in student loans, all were deferred but one to Bank of America for $80,000.
All BOA had to do was to contact him before default and get him to sign a form to defer it til he gets out of residency.
They let it go and sold his low interest student loan to a New York Collection Agency that tacked $21,000 on to the loan and are making him pay $900 a month at 21% interest.

Crime?


24 posted on 06/12/2012 7:11:35 AM PDT by urbanpovertylawcenter (where the law and poverty collide in an urban setting and sparks fly)
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To: tfecw
Get rid of federal financial aid and watch the cost of college plummet.

You said it. Get rid of the quid pro quo that rewards colleges for training Americans to give up freedom and individualism for communism and debt slavery.
25 posted on 06/12/2012 7:22:18 AM PDT by hedgetrimmer
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To: vortigern
Very little of what is taught in college can’t be done on-line, without the massive expense of a brick and mortar campus.

Except for the credential. The diploma is important to one's employment prospects. Yes, it doesn't at all affect how good one does one's job; but in the current climate, it's an absolute requirement for many positions to avoid getting your resume tossed immediately into the trash can.

26 posted on 06/12/2012 7:28:06 AM PDT by Oberon (Big Brutha Be Watchin'.)
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To: nascarnation

Add this step:

Forgive the outstanding debt on the student loans by charging it off to the taxpayers.


27 posted on 06/12/2012 7:28:34 AM PDT by NEMDF
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To: nascarnation

Bingo!

But students are now becoming aware of what they signed up
for....it is starting to trickle down....

So schools will be cheaper when they get rid of dramatic
writing, cinema, gender studies programs and other
super-niche programs, and lump only a few of
those classes into broader categories, thereby getting rid
of many subperforming professors, and they won’t attract
the binge drinking, netsurfing,perhaps STD carrying, depressed
students.

I don’t know if it’s important but I have been told by someone
(this person has very good inside information) that the main medications
dispensed at their school health care facility are birth
control pills, and antidepressants. Can you imagine trying to
learn something worrying about side effects of BCP’s or
being depressed? Or both?


28 posted on 06/12/2012 7:47:51 AM PDT by Getready (Wisdom is more valuable than gold and diamonds, and harder to find.)
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To: Getready
birth control pills, and antidepressants.

bcp I totally understand

antidepressants is interesting

I have heard that Adderall (not an a/d but a stimulant) is known as the "breakfast of champions" on campus

29 posted on 06/12/2012 8:02:01 AM PDT by nascarnation
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To: Sacajaweau
One of my college professors told me: “You won’t believe what they pay me. It’s ridiculous.”

Our salary schedule is online if you take the time to look around for it. At the two schools I'm working in, adjuncts start at $32.50 and $40. Full-time instructors start at $50,000 at the community colleges in the area. Of course, "full-time" is a relative term ... apparently somewhere between 25 and 30 teaching hours per week plus however many office hours they put in, minus all the time off.

Adjuncts generally have no benefits package, but the full-time staff has the same package as that offered to the public school faculty and staff.

I consider the pay adequate as long as I can get enough hours each semester. Perhaps others would consider it too high or too low. I'm earning 1/5 of what I earned the last year I worked for the telecom company, if that will help you determine my actual worth in the market.

30 posted on 06/12/2012 10:40:42 AM PDT by Stegall Tx (Living off your tax dollars can be kinda fun, but not terribly profitable.)
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To: BitWielder1

Obama Breaks Down Student Loan Overhaul
He will also talk about the provision’s less controversial expansion of Pell Grants, as well as supporting historically black and minority institutions and caps on student loan repayments.
According to the White House, “New borrowers who assume loans after July 1, 2014, will be able to cap their student loan repayments at 10 percent of their discretionary income and, if they keep up with their payments over time, will have the balance forgiven after 20 years.”
http://whitehouse.blogs.foxnews.com/2010/03/30/obama-breaks-down-student-loan-overhaul/
So basically, you need to make sure you buy or rent a living space expensive enough to maximize your non-discretionary spending, so you make the absolute minimum student loan payments for 20 years. Then the debt disappears!
Or more acurately, your debt gets paid by other Americans, which is “free money”!
Those of us who pay off our loans and debts sure look like chumps.
“These investments complement President Obama’s broader agenda for higher education and will help us reach his goal of America having the highest proportion of college graduates in the world by 2020.”
http://www.whitehouse.gov/sites/default/files/10326-higher-ed.pdf
(no mention given to QUALITY)
“Public service workers such as teachers, nurses, and those in military service will see any remaining debt forgiven after just 10 years.”
http://abcnews.go.com/WN/Politics/health-care-obama-signs-student-loan-overhaul-legislation/story?id=10239569&page=2


31 posted on 06/12/2012 11:07:51 AM PDT by TurboZamboni (Looting the future to bribe the present)
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To: Kaslin

One thing you should explore is the amount of power the government exerts over those in debt to the feds on student loans. First, the debt can not be bankrupted. No matter what, you are stuck with that loan until you pay it off OR 20 years (whichever comes first) with the interest continuing to accrue.

Second, if you do default on the loan, you are no longer eligible for a number of federal programs nor can you collect a tax refund. Or any money the government may legitimately owe you.

Third, if you choose certain career paths, the government will pay off some or all of your student loan. Of course, most of these careers otherwise cannot attract quality applicants and if you drop out of the program, you still owe the loan.

Fourth, and I believe this is the real reason for the federalization of student loans, the majority of those who never graduate college take out student loans. And statistics say they tend to make less than those who graduate. However, they have to pay off that loan regardless. Therefore, since the interest generated on the loan goes to the government, they end up paying a stealth tax to the government without the feds ever having to pass a bill.

Think about that for a minute. A family of three earning $25k pays something along $500 in income tax. But a family with two average student loans ($23,000 each) at the normal 6% = $2,500 in interest to the government. Of course, that number goes down as the balance on the loan decreases, but in the years you are earning the least, the government collects the maximum amount of interest. In the later years, when the interest collected goes down, your income is very likely to increase, therefore increasing the income taxes collected.

It’s a way to collect more money for the government from the lower classes without actually passing a bill to tax them. Heck, for that matter, most folks view it as a benefit from the government when it’s actually a direct tax on the poor.


32 posted on 06/12/2012 11:41:14 AM PDT by Stegall Tx (Living off your tax dollars can be kinda fun, but not terribly profitable.)
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