Skip to comments.Telling Students to Earn Less: Obama now calls for reforming his bleeding college loan program.
Posted on 04/24/2014 6:50:58 AM PDT by SeekAndFind
The federal student loan program is becoming so costly to taxpayers that even President Obama is pretending to fix it. Readers will recall Mr. Obama as the man who has spent much of his Presidency expanding this program, creating new ways for borrowers to avoid repayment, and then campaigning about these dubious achievements on campuses nationwide.
Now Team Obama is acknowledging that his policies are turning out to be more expensive than he claimed.
Participation in federal debt-forgiveness programs is surging. In a mere six months the number of borrowers who've signed up for such plans has increased to more than 1.3 million from less than a million, with total balances rising to $72 billion from $52 billion. Maybe the White House didn't understand that when you give people an economic incentive not to repay a loan, more people won't repay.
Taxpayers can suffer in many ways from federal education lending, because most loans are issued regardless of a borrower's ability to repay. So loose is this form of credit that in the slow-growth Obama economy it has become a vehicle to fund basic living expenses, with tens of thousands of borrowers consuming aid even when they're not enrolled for courses.
But the immediate taxpayer S.O.S. concerns Mr. Obama's Pay As You Earn program. We've warned for years about the risks of this program as Mr. Obama has worked to expand the number of eligible borrowers and sweeten its terms.
(Excerpt) Read more at online.wsj.com ...
Where are those Federal ‘debt forgiveness’ programs for me?
Oh, that’s right...
I finance them!
I’ve heard that colleges have been increasing their tuition and fees over the years, precisely because all this federal loan money is available to pay tuition increases.
It seems strange if this is the case. But, it also sounds as if increasing amounts of loans do NOT in the end help students cope with the costs of college.
My daughter needs help next year for her junior year in college. We’ve been able to handle the 1st 2 years but need a loan now. It never crossed my mind to apply for any federal funds. We’re just going to our bank.
The borrower becomes slave to the lender.
New International Version (NIV)
7 The rich rule over the poor,
and the borrower is slave to the lender.
This was written more than 3000 years ago............
Well, if Obama could have his way, black students and illegals wouldn’t have to repay their student loans. That’s what white citizens and rich people are for.
Thanks for this info.
It could be a racket. Colleges increase their tuition far beyond rates of inflation or their own operating costs. But then, Uncle Sam steps in with increasing amounts of loan money to pay the increased cost. So colleges can get away with huge increases, and God knows what they are doing with the additional money. Probably hiring more professors of women’s studies and black studies and other such fields.
Funneling it straight to politicians.
Victor Davis Hanson ( Hoover Institute, Stanford University ) knows this first hand.
Here are his observations...
College costs have gone up over 7 percent annually on average for the last two decades.
If I had an investment that paid me 7% regularly every year, I’d buy it over any mutual fund.
It is past time for transparency, especially given the infusion of state and federal subsidies.
Don’t you find it strange that that universities will publish statistical data on almost every facet of American life from racial matters to the environment but not provide the public with a detailed breakdown of their own expenditures to allow students and their parents to understand why their tuition is priced as it is.
Students should have the choice of deciding whether they wish to attend a college that budgets for rock-climbing walls, an Assistant Dean of Internet Technology, or visits by a Michael Moore or John Edwards, at thousands of dollars per campus rant.
Much of the recent explosion in annual costs is due to administrative bloat special assistants to this and deputy associates of that. Left unspoken is that many of these trumped-up six-figure positions are to promote diversity and technology that have little to do with mastery of reasoning, prose, and scientific knowledge.
Most administrative jobs require less formal expertise than does a faculty position, and it is generally recognized that full professors who take on administrative positions are sometimes welcomed out of the classroom given their poor teaching and research records.
But why should those who dreamed up exploitative part-time teaching positions be exempt from their own logic? Private enterprise could supply all sorts of part-time administrative clerks to the university at a fraction of the present in-house costs. If a PhD in French can be hired as a lecturer for $800 a month, surely the Associate Provost for Diversity Affairs can be part-timed and outsourced for $600?
What? I thought this was actually making money and we were going to use it to help pay some of obamacare’s cost?
allow student loans to be dischargable in bankruptcy and make UNIVERSITY ENDOWMENTS as well and universities liable for any unpaid balance.
This will start to discourage junk diplomas and diploma mills.
The UC system here in California under the guidance of Richard Blum (DiFi’s hubby)has .78 employees for every single student.
“I finance them!”
No, actually you don’t. It is your kids and grand kids.
When I read this I realized this is the next big handout to “Big Education” - one of the prime funding mechanisms of the Democrat party.
The Chicago Mob leaves no avenue untrod in its quest to reward friends and punish enemies.
Yes “Big Education” has a mission to transfer money from the taxpayers to Democrat politicians.
Via high paid profs and admins who donate to progressives.
It appears to be working really well too.
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