Posted on 08/08/2016 9:16:49 PM PDT by Mr. Mojo
Regulations are flying out the door in in Washington, where an already hyper-aggressive Obama administration is looking at its last chance to move its agenda forward while sidestepping Congress. Many of the expensive rules in areas like energy, health care, and finance have drawn widespread public and media scrutiny – which makes it all the more curious that what is likely to be the single most expensive proposed regulation of the year, a Department of Education rule that would discharge billions in student loans, has gone almost completely unnoticed.
The proposed rule, titled the “Borrower Defense to Repayment Regulations,” would create a stampede to file claims for loan forgiveness based on a newly broadened, vague standard requiring only that a plaintiff allege a school made a “substantial misrepresentation.” This phrase is defined broadly as any “statement” or “omission” with a “likelihood or tendency to mislead under the circumstances.”
For decades students have been able to apply for loan forgiveness when they were victims of intentional fraud or another violation of state law. The proposed rule ditches the requirement that there be any actual legal violation, substituting in a new standard so vague that complaints will proliferate based on innocent errors and alleged misunderstandings – with the costs shifted either onto schools or, ultimately, to federal taxpayers.
Schools will have little recourse to defend against the allegations. Determination of whether an institution has made a “substantial misrepresentation” to a student or group of students is made unilaterally by a hearing examiner at the Department of Education. The examiners, facing sympathetic tales of woe from people who racked up big debt totals, will likely be inclined to approve most of them. State universities and community colleges will consume taxpayer dollars defending themselves even when they prevail. Some schools, flooded with claims, will likely be put out of business, leaving taxpayers on the hook.
The ultimate cost to taxpayers will be astonishing. The department’s own analysis found “a net budget impact in costs over the 2017-2026 loan cohorts ranging between $1.997 billion in the lowest impact scenario to $42.698 billion in the highest impact scenario.”
Let that sink in. Bureaucrats are proposing a rule that imposes costs – they think – of at least $2 billion and quite possibly $40 billion or more on taxpayers. What kind of insane range is that? They clearly have no clue how much this will cost. And who elected the Department of Education to spend our tax dollars at all?
That’s a lot of money. And I wouldn’t want to spend it. But we have dumped 12 billion a year on the goat humpers in Afghanistan. Id rather it go to Americans with student loans before a goat humper, or to pay for an Egyptian to buy a sub from Germany, or to fund the Syrian jihadis, or to resettle Syrians and Africans, or to blow up Libya, or to pay for the offense....oops, I mean the “defense” of the EU..
I think the government was already on the hook through loan guarantees that are almost impossible to discharge. If these students are thousands of dollars in debt for essentially worthless degrees, I don’t necessarily think that this is a bad idea. With the ability to essentially discharge this debt they have the opportunity to build a better life instead of having a thousands in debt that will never be paid as agreed.
I won’t hire anyone who has their loan forgiven.
But Obama is going to do so much damage on his way out, its probably incalculable.
I do note that anything that helps a normal person is instantly seen as evil and wrong, and a moral hazard. But banks can be bailed out freely, without any moral hazard.
Curious.
They are both wrong.
Lawyers are drooling...
I was going to run out and get a student loan to pay off my credit cards in the hope it would all be forgiven. May as well get enough to pay for some new teef while I am at it.
Well....spit..!! Glad to know that!!
@#%#$%
How about "FREE" cars for everyone too!!!
@#%^#$&^%!!!
Although, I was issued a sweet set of tools and gauges that I used forever, and a copy of Modern Refrigeration and Air Conditioning that was the size of a New York City phone book. Thankfully, the Eppes Essen deli next door had great chow and coffee!
Don’t forget free puppies!
Housing bubble redux - both brought to you by the ‘rats - and neither will ever be blamed on them......
“I think the government was already on the hook through loan guarantees that are almost impossible to discharge. If these students are thousands of dollars in debt for essentially worthless degrees, I don’t necessarily think that this is a bad idea.”
I don’t either... The students are the victim here. For colleges to provide an education that is essentially worthless and have the student on the hook for the inflated cost is just wrong in so many ways.
A better model IMHO, would be for students to be on the hook for a percentage of their gross income, for X number of years after graduation.
If colleges were funded in that fashon, the schools would only get paid for value added in the programs they offered. If they did a crappy job of educating, they would get a very low repayment. The schools are the ones that need to be held accountable...
100% agreed. But just saying that nobody ever thinks its natural to tell the banks or Islamic nations they must live with their crappy choices.
Id like to see it all stopped.
The “Medicaid” template for student loans.
Clean up your spittle moron. I would happily rather it go to an American student than to an Afghan warlord or to a Syrian jihadi.
And I’d be *happiest of all* if it stayed in my pocket.
A college education and a $1.50 will buy you a cup of coffee these days and that’s about it.
The education monopoly needs to be destroyed.
I'm just pissed off here regularly.
I pay more than 50% of what I make to taxes....
What the hell...do they want to take MORE!!!???
Our country is going to hell in a hand basket.....when folks agree that college should be "free". The socialists are in charge of 98% of colleges in this country....Doesn't anyone here...know what will happen? I do.....
Does anyone...know that we cannot give everyone, everything they want?
@#^$%&%&*.....I've had it,,,
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