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Student Loan Crisis: Another Obama Legacy of Failure
The Revolutionary Act ^ | 02/13/18

Posted on 02/13/2018 6:38:48 AM PST by Liberty7732

There is indeed a student loan crisis. And the numbers show it is entirely the doing of President Obama, with an assist from his supporting cast in the Democrat-run Congress.

The crisis has its origins in 2010, when President Obama essentially nationalized the national student lending program by signing a law he had proposed and Congress passed that muscled banks out of the picture as lenders. Banks had been providing government-backed student loans, but Obama, in all of his community organizer wisdom, figured distant government bureaucrats could do it better than bankers and save taxpayers money. It’s laughable, sure, but he and Democrats apparently believed it.

“By cutting out the middleman, we’ll save the American taxpayers $68 billion in the coming years,” Obama said during the signing ceremony. “That’s real money.” By the way, that savings number comes from the Congressional Budget Office, which once again shows that a palm reader would probably be more accurate in projecting impacts.

The president assured Americans that anyone who wanted to go to college would be able to get a loan. Again, totally predictably, federal student loan debt skyrocketed, from $154.9 billion in 2009 to $1.1 trillion by the end of 2017, according to Investor’s Business Daily.

Eight years. One president. Another unforced crisis.

But that’s just for millions of students that jumped at something they could not afford and many would not finish. Taxpayers are really taking it in the hindquarters.

A recent U.S. Department of Education report puts it starkly. The report points out that the program had a $25 billion surplus in 2012. That fell to a $5 billion surplus by 2015, was $8.4 billion in the red in 2016 and plummeted to a $36 billion loss last year. Who knows where it will be by the end of this year.

Remember. This was pitched as a way to not only save money, but make money. Why let the banks make the interest when the government can? But government by nature is somewhere between Keystone cops at best and criminal corruptocrats at worst, with much falling somewhere in the middle. So naturally instead of making money, or doing anything positive at all, it cost American taxpayers $36 billion last year and presumably a lot more this year.

In addition to the Keystone Cops-corruptocrat part of the formula, Obama also played magical government money politics with it. Precisely when he directed Washington bureaucrats to run the loan programs, he solemnly intoned in his special way about the burden student loans are to young people and that “we” — meaning American taxpayers — need to help them shed this burden (which, you recall, he was helping heap on them.)

Obama and his pen instituted a series of programs that made it easier for students to get out of paying back their loans. Whatever compassion there may have been in this nonsensical scheme, there was surely more than a heavy dose of politics. Politicians giving away goodies (that are not theirs) to others is a time-tested way to get votes.

One of his programs — called “income-driven repayment” but nicknamed “Obama student loan forgiveness” — allows borrowers to not make payments when their income falls below a specific threshold, then caps payments as a percentage of total family income. Any debt left over at the end of 25 years is forgiven. Because that’s how real life works.

It doesn’t take a genius with an expensive degree in human nature to know the perverse incentives that program provided. Students with debt rushed into the program, minimized income at certain levels, kept income off the books and began running the clock out on the 25 years. Their debts were so massive, it made sense to them — even if it was immoral.

A survey of student borrowers by LendEDU found half do not plan to pay back all their debts because, as Obama and Democrats kept prattling on about, the feds would just forgive them.

Why were the debts so massive in the first place? Again, human nature. Knowing the government was going to make sure anyone could get a loan for college, universities around the nation began ramping up tuitions at a faster rate than their already rapid increase. After all, the windfall was coming, and there were no controls and no market mechanism anywhere because the government was doing everything.

This is all terrible policy from the start, even before Obama turned it into a financial horror flick.

Seriously, explain again why people who do not send their children to college should be working to subsidize and actually pay for those who do? Explain again how this is Democrats looking out for blue collar, hard-working Americans that they suppose are their constituency?

All this shows yet again just how extraordinarily bad a president Obama was — and how bad Democrat policies continue to be.


TOPICS: News/Current Events
KEYWORDS: debt; miserablefailure; obamalegacy; studentdebt; studentloancrisis; studentloans
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1 posted on 02/13/2018 6:38:49 AM PST by Liberty7732
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To: Liberty7732

There is no successful idea in the multiverse that was adapted by Dorkbama the Muslim eunuch quota boy.

He is utterly incapable of college level work, but somehow got all those degrees.

Any wonder that he hides the records?

But, he cannot hide his presidential record of complete and utter incompetence and failure.


2 posted on 02/13/2018 6:41:28 AM PST by Da Coyote
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To: Liberty7732
i_could_argue_but_i_completely_agree_640_18
3 posted on 02/13/2018 6:42:51 AM PST by SkyDancer ( ~ Just Consider Me A Random Fact Generator ~ Eat Sleep Fly Repeat ~)
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To: Liberty7732

People borrowed money and now they have to pay it back. How is that a crisis?


4 posted on 02/13/2018 6:43:44 AM PST by AppyPappy (Don't mistake your dorm political discussions with the desires of the nation)
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To: AppyPappy

Off topic, but does anyone know if the taxpayers are still paying for Obama phones?


5 posted on 02/13/2018 6:48:19 AM PST by CMailBag
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To: CMailBag

I cannot answer the obamaphone fiasco except to figure that any government program once started becomes eternal.


6 posted on 02/13/2018 6:49:52 AM PST by Mouton (The MSM is a clear and present danger to the republic.)
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To: Liberty7732

Obama’s Cloward-Piven weapon of mass destruction.


7 posted on 02/13/2018 6:51:48 AM PST by griswold3 (Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.)
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To: Liberty7732

There has been talk of the student loan (SL) bubble being the next one to burst going on five or six years now.

I have to ask: Would you work hard to pay off your student loan if there was a lot of talk that they might be forgiven?

Yeah, me neither.

They need to foreclose on a few thousand of these SL deadbeats to send a message to the rest of them.


8 posted on 02/13/2018 6:55:52 AM PST by robroys woman (So you're not confused, I'm male.)
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To: Liberty7732
"federal student loan debt skyrocketed, from $154.9 billion in 2009 to $1.1 trillion by the end of 2017,"

That is absolutely breathtaking. The student loan program really just became another form of welfare.

9 posted on 02/13/2018 6:57:55 AM PST by circlecity
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To: AppyPappy
"People borrowed money and now they have to pay it back. How is that a crisis?"

Because a large proportion of these debtors will never have the resources to "pay it back." Default rates are skyrocketing.

10 posted on 02/13/2018 6:58:58 AM PST by circlecity
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To: circlecity

The Universities are responsible for this. They should take the hit out of their endowments for students that fail to repay.


11 posted on 02/13/2018 7:01:41 AM PST by ActresponsiblyinVA
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To: Liberty7732
Missing from the Analysis is the fact that the monies earned by taking over this industry was to be used to prop up Obamacare.

Probably also to appease College Students who lost their high deductible catastrophic plans they could buy as students because it didn't meet the Obamacare "Qualified Plan" requirements, and they went on their parents, correction their parents employers dole until 26.

So "when" Mr. President, I know your busy, but when do we cut this Obama giant chum bucket away from the dock and send it out to see to sink on it's own, give it back to the private sector...

12 posted on 02/13/2018 7:02:05 AM PST by taildragger ("Do you hear the people Singing? Singing the Song of Angry Men!")
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To: taildragger

Oops “Sea” not see, lol !!


13 posted on 02/13/2018 7:03:21 AM PST by taildragger ("Do you hear the people Singing? Singing the Song of Angry Men!")
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To: robroys woman

I agree with you. Some garnishments on pay might be in order, or hold up their tax refunds, etc. This might start to get their attention.


14 posted on 02/13/2018 7:03:34 AM PST by NEMDF
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To: Liberty7732

“The president assured Americans that anyone who wanted to go to college would be able to get a loan.”

My how history repeats itself. This is a carbon copy of what the libs did to the housing market starting in the mid 90’s when they called loaning agencies in and threatened them with special taxes if they didn’t start giving loans to high risk clients based upon race. The libs then further destroyed the market by lying about the liquidity of Fanny and Freddie, two of the main loaning recovery funds to cover the expected foreclosures mainly done by Barney Frank and Chris Dodd. The selling point during the Clinton administration was the same as the student loan situation now: anyone can own a house (go to college). Funding is available. Exact same situation with exact same results. And if these people who took the loans are consistent, they will need further government programs to protect them from their stupidity. In rides the libs on their white steed to do that. So the action required is the government has gotta keep them in office to save the day for the thousands that failed on their loan. Votes, votes, votes.....

rwood


15 posted on 02/13/2018 7:06:19 AM PST by Redwood71
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To: circlecity

I don’t think you can default on a student loan if it is Federally insured. Screw everybody else but the government is going to get their money.


16 posted on 02/13/2018 7:06:39 AM PST by AppyPappy (Don't mistake your dorm political discussions with the desires of the nation)
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To: AppyPappy

“People borrowed money and now they have to pay it back. How is that a crisis?”

Its only a crisis for the fools who borrowed a boatload of money to buy a degree in intersectional black transgender interpretive mime studies with a minor in hate whitey.


17 posted on 02/13/2018 7:12:41 AM PST by bk1000 (I stand with Trump)
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To: AppyPappy
"I don’t think you can default on a student loan if it is Federally insured."

No, you can't discharge a student loan debt in bankruptcy. You can and many do default on it by failing to make repayments. You can't squeeze blood out of a turnip. If they don't have the money and don't have wages to garnish it's the govt. that takes the hit. That's all federally insured means now.

18 posted on 02/13/2018 7:23:34 AM PST by circlecity
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To: Liberty7732

A crisis deliberately created for political reasons.

Democrats can now come to the rescue by floating loan forgiveness proposals. We underestimate the potential of this at our peril.


19 posted on 02/13/2018 7:24:23 AM PST by Buckeye McFrog
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To: Da Coyote
There is no successful idea in the multiverse that was adapted by Dorkbama the Muslim eunuch quota boy. He is utterly incapable of college level work, but somehow got all those degrees. Any wonder that he hides the records? But, he cannot hide his presidential record of complete and utter incompetence and failure.

Below is his new presidential painting surrounded by his favorite herb of choice. He and his chair are floating in the air and his favorite herb.


20 posted on 02/13/2018 7:24:54 AM PST by Grampa Dave (Never pick a fight with an angry beehive of 64+ million Trump Deplorables. You will lose!)
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