Free Republic

While Barack Obama is enjoying extravagant parties with Hollywood celebrities and taking opulent vacations, America's middle class is being decimated by his policies. Certainly Obama deserves to be condemned for the Nixonian corruption and Carteresque incompetence of his administration, but what Obama is doing to middle class Americans is just as despicable. He's slowly, but surely squeezing them into oblivion. Sadly, many Democrats are fine with this because they've calculated that a poor voter or better yet in their eyes, a voter dependent on welfare and food stamps, is more likely to support them than a voter in the middle...

If you think the federal student-loan program looks like a bad deal for taxpayers, imagine how it would look with honest accounting. And now you don't need to imagine thanks to a new report that's receiving far too little attention. Turns out that the official "savings" for taxpayers of $184 billion over the next decade really add up to $95 billion in losses. Here's the scam: Lawmakers peddle what is a massive subsidy for universities while claiming that student loans generate a windfall for the taxpayer. This phony windfall is conjured by creative accounting that politicians mandated via the Federal...

Unless Congress acts, interest rates for government subsidized student loans will double to 6.8% from 3.4% on July 1. In May, House Republicans passed a bill that would index rates on new loans to the rate on 10-year Treasurys (currently about 2.6%), plus 2.5 percentage points, with an 8.5% cap. But with little Democratic support in the Senate, that bill is dead in the water. Most Democrats want to lock the current 3.4% rate in place for two more years while Congress debates a "fairer" solution. Massachusetts Sen. Elizabeth Warren has even proposed letting students borrow directly from the government...

With Congress and the Obama administration focused on Monday’s deadline to prevent student loan interest rates from doubling, it is an apt time to examine the larger consequences of America’s staggering student loan debt load. Even as mortgage, credit card and other consumer debt levels have decreased, today’s students carry unprecedented — and growing — debt burdens. With outstanding student loan debt in the first quarter of 2013 totaling a record $986 billion, the impact on individuals is disturbing. But add to that the fact that this debt load threatens the nation’s very ability to compete in the global economy,...

NEW YORK (MainStreet)—It seems that many students - and their parents - are wading into a miasma of college tuition financing they are ill-prepared to understand. All too anxious to start attending the college of their choice, indeed often the college of their dreams, students and parents know little about the terms of the loans they obtain for tuition. One would have thought somewhere in all the high school honors courses and all those science and math courses SOMEBODY would have mentioned ...

NEW YORK (MainStreet)—When SLM Corp., the largest education financing entity in the country more commonly known as Sallie Mae, announced in January that profits for the fourth quarter of 2012 decreased to $343 million, from $506 million earned in the same quarter in 2011, it was a conspicuous reminder of how lucrative the student loan business is....

With interest rates on government-subsidized student loans set to double on Monday, U.S. Rep. Donald Payne Jr., D-Newark, called on Congress to act, saying the imminent rate increase would “devastate students and their families.”

Since January, the agency said it has flagged 126,000 applicants, about 1% of all those seeking aid for the 2013-2014 school year. "What we find are very poor students academically that are borrowing to the max, getting the maximum in their Pell grant and just going from school to school," said Rich Heath, director of financial aid at Anne Arundel Community College Roughly $829 million in Pell grants in the fiscal year that ended last September were "improper payments," which includes fraud and disbursements...

Americans are still talking about the recently deflated housing bubble, but there’s a new bubble in town. It’s the student loan bubble and when this one pops, it might dwarf the wreckage we’ve witnessed in the real-estate markets. In the latest news, the Federal Reserve’s Board of Governors warned that soaring student-loan debt has “parallels to the housing crisis,” according to a May report in Bloomberg. As with housing, free-flowing cash will lead to widespread default. Of course, it’s easier to repossess a tract house than to take back a potentially worthless degree. Federal Reserve Chairman Ben Bernanke dismissed these...

Cable news channels regularly stoke their viewers' fears about China holding $1.1 trillion of U.S. debt. But they're focused on the wrong $1.1 trillion of loans. The borrowers of this other $1.1-trillion debt are far more likely to default on their obligations: students, particularly those who went to for-profit colleges. The global consequences could be — and likely will be — staggering. More than 38 million Americans have student loans outstanding. To put this in perspective, 38 million is the combined population of New York and Florida. And this collective debt is on par with the entire GDP of Mexico.

Excerpt:NEW YORK (MainStreet)—The American automobile industry was once the envy of the world. But the automobile companies and their workers gradually slipped into complacency. Eventually, the industry was characterized by increasing costs and decreasing quality. The workers and executives earned more, but produced less. Soon their product was inferior to that of Germany and Japan. Eventually, companies became bankrupt and - were it not for the American taxpayer – would have been dispatched to the ash heap of history. It seems that the American education system, while currently still the envy of the world, is following that same trajectory. The...

Would you like to know what America's young people are actually learning while they are away at college? It isn't pretty. Yes, there are some very highly technical fields where students are being taught some very important skills, but for the most part U.S. college students are learning very little that they will actually use out in the real world when they graduate. Some of the college courses listed below are funny, others are truly bizarre, others are just plain outrageous, but all of them are a waste of money. If we are going to continue to have a system...

NEW YORK (MainStreet)—The latest trend in Congress is to all for bailing out college students from their student loan debt. After all, the logic goes, if the American people can bail out the banks why not students? They are our greatest resource and they have a greater impact on the economy than inefficient, greedy and incompetent bankers. For this purpose, two pieces of legislation have been introduced--one on March 21, in the House, by Rep. Karen Bass (D-CA) and the other, on May 8, in the Senate, by freshman Elizabeth Warren (D-MA). Bass calls hers the Student Loan Fairness Act...

Why Student Loan Debt Will Crush The Recovery by Jason FarrellJune 3, 2013Last week, US News & World Report’s money blog noted the Federal Reserve Bank of New York’s recent ominous findings: Student loan borrowers, facing mounting debts and diminished prospects for employment, are retreating from other markets they customarily supported, such as housing and auto loans: “In the past, young adults with student loan debt were more likely to buy a house than those without student loan debt. In fact, in the years leading up to the recession, a gap emerged between homebuyers with student loans and those without....

Congress has one month to reach an agreement before interest rates on new federally subsidized student loans double to 6.8 percent. For once, both Democrats and Republicans see the increase as a problem that needs to be solved. As expected, though, they have very different solutions, each with their own benefits and shortcomings. President Obama emphasizes the importance of college affordability, but a Fidelity Investments survey shows that new graduates are getting stuck with $32,000 in debt — a staggering sum even before interest costs are included. House Republicans want manageable interest rates, but they also want to trim the...

On Friday, President Obama will once more revive one of his ol’ campaign-favorite memes and remind college-age and younger voters of what it is exactly the Democrats can do for them — besides, you know, engendering a sluggish economy with a youth unemployment rate of sixteen percent, but I digress. On the campaign trail last summer, the president spoke to younger crowds about preventing the interest rate on federally subsidized Stafford loans from doubling to 6.8 percent as a way of boosting the economy, and Congress sent up a one-year extension of of the 3.4 percent rate for him to...

According to the Congressional Budget Office, $8.7 billion of the money collected in student loan interest payments actually goes to pay for ObamaCare. The CBO estimates that the interest rate on these loans could be reduced from 6.8 percent to only 5.3 percent were the funds not used to subsidize the healthcare reform law and other federal programs. The profits from student loans are divided as follows: $8.7 billion goes to pay for ObamaCare; $10.3 billion goes to pay down the federal debt; and $36 billion goes to Pell Scholarship grants. The 16 million American students who now have student...

Dismissing a veto threat from President Barack Obama, lawmakers in the House passed legislation that links student loan rates to the ups and downs of the financial markets in a vote largely along party lines. The Republican-backed bill would allow students to dodge a scheduled rate hike for students with new subsidized Stafford loans next month, but rates could rise in coming years. Democrats largely opposed the measure—which they branded the “Making College More Expensive Act”—while the Republican chairman of the Education Committee labeled the legislation a starting point for negotiations with the Senate and White House. … Interest rates...

“Fat, drunk and stupid is no way to go through life,” counseled Faber College’s Dean Wormer in “Animal House.” For the collegiate class of 2013 — until next year the most indebted ever — add “in hock” to that immortal list. Compared with their parents, current graduates are paying four times more in inflation-adjusted terms for their diplomas while suffering substantially inferior job and income prospects. Like “Animal House’s” witless frat brothers, those who believe college is a last hurrah before plunging into adult reality must Think Again. For generations, Americans practiced what Benjamin Franklin preached — “An investment in...

Markets work. But sometimes they take time. That's the uncomfortable lesson that proprietors of America's colleges and universities are learning. For many years, market forces didn't seem to apply to them. There was a widespread societal consensus that a college education was a good economic investment. Politicians gave lip service to the idea that everyone should go to college. No one should be stopped by a lack of money. There was historic precedent. The G.I. Bill of Rights vastly expanded college populations and helped build prosperous post-World War II America. Putting even more through college would make us even more...