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.
They should also garnish the pay of the college presidents, administrators, professors etal who took this government money knowing full well that a significant number of their students would never be able to pay it back.
I think part of the crisis is, they want the government to wipe away their debt. Of course, when you drop over $100k for a worthless degree and realize that it ain’t gonna pay the bills, the snowflakes among us start pointing fingers and look to others to save them. They’ve been taught that the, Government, will solve all their problems.
Instead, they (the college employees you mentioned) are likely to come after us again, if their pensions are short of funding when they want to retire.
I once read that the profession that had the highest number of defaulters were those in the medical field. After all that schooling, the doctors either wouldn’t or couldn’t pay back their loans. Back in the day people would change their names and get new SSNs to avoid paying. But, then the rules changed. And, now you can’t run and hide. If you’re behind, you’re not getting a government job, a security clearance or anything like that.
You’re exactly right. When their hero federalized the industry and they knew the kids would have unlimited access to government money, everything increased. I remember reading that the university system in Cali had to increase tuition and fees by 13% or more one year. Funny, I never heard anything about the faculty being asked to take a pay cut or maybe some useless positions being cut for ridiculous degree programs and classes. Government, in all its forms, is nothing but a way for those on the Left to find work, not have to worry about performing and can usually make a comfortable living, doing it.
Did you know all about this?
they do that. If they go after people. People used to be able to get away with not paying. Not anymore. It’s treated like any other debt, with one catch, you can defer your payments if you prove you’re unemployed or still in school. Interest still builds on the loan amount.
So, if you’re a Millenial Hipster that can’t find work, living with your folks and waiting tables for cash, you can defer and defer and defer. Then you have people like Sanders talking about loan forgiveness, why would any one of them write a check.
The housing stuff started with CRA, under Carter. Kind of withered away until Clinton and his enforcer at HUD, Cuomo, started threatening banks and lending institutions. They caved but then learned that they could use Wall St to protect themselves by selling the mortgages, even though the paper wasn’t worth anything. Then it crashed.
How is all that similar? Kids are getting degrees in, NOTHING. But, they throw money at them, like they threw mortgages at them, and they rack up debt. Then they get into the real world. Suppose they’re in IT. Now they have to compete against and H1B visa holder, who will work for nothing.
When I took mine out, which I repaid, I was told that the rules had changed dramatically and that they could not be discharged in a bankruptcy. In fact, they said that most, if not all, the loopholes people used before, name changes, new SSN, etc, were filled and folks couldn’t walk away from them anymore.
But one thing that has them all in an uproar, this is affecting their credit, etc. So, there goes the new Prius, trendy apartment in the latest hipster neighborhood or a mortgage.
George W Bush’s phone were only supposed to go to people that couldn’t afford one and to be used to call 911 and other government entities, for help.
Not be given away on every street corner, then traded for crack, heroin, or an EBT card.
I knew The Kenyan took banks out of the process but didn't know how quickly it went from the black into the red.
Debt is the opioid behind our entire economy, and especially for the "higher education" industry.
We're hopelessly addicted and it will eventually contribute to our inevitable downfall.
ANOTHER MASSIVE DEBT, A FANTASY OF THE KENYAN FAKE PRESIDENT, THE MAGIC NEGRO AND HIS MONEY FAIRY.
If ignorance is bliss, super ignorance and an agenda invariable ends in financial disaster.
Sooner or later, educated, literate and engaged American citizens will have to acknowledge two things.
First of all, that Hussein is without question the most inept and ignorant president in U.S. history. Even 8 years is not long enough to learn on the job to deal with the demands of the office. Historically an unquestioned failure, fully documented by the vast record.
The only preesident on record able to make a trillion$ disappear in a matter of months without a trace. In his first year in office!
Second, the CBO is a fake agency, a total and complete sham, AUATOABP!
A 47 million$ rubber stamp that "confirms" what they receive from Congress for mathematical accuracy only! a thousands of employees adding machine!.
Congress adopts a budget or proposes a large expenditure; assumptions made, that no matter how unreal, absurd and otherworldly cannot be challenged, or modified in any way. Miraculously, most of the time the CBO confirms the financial analysis of what the Congress of criminals submits.
So what's the point of this useless exercise? In the immortal words of that disgraced master scammer, Jonathan Gruber, to "inform" the barely literate ignorant voter!
Does that credibly explain a $23,000,000,000,000 National debt?
Double up on your meds, pappy...
90% of them are "forgiven"
and never pay it back!
By any definition, that's a crisis!
Also "you're busy," NOT "your busy..."
If student loans are revived IN ANY FORM, it must be limited to STEM diplomas, and NEVER FOR HIGH SCHOOL IN "COLLEGE" REMEDIAL COURSES!!!
You "Effed Up?" apply at McDonalds...
We've got our own real American citizen "dreamers" we need to put though university.
I beg to differ.
The govt can't take shit. They don't create wealth. We, the working non govmt employee net taxpayers "take the hit."
You are absolutely right! There are millions of heirs who are actually bastard/errs...
Tell that to the IRS.
In the last decade or two there have been numerous reports of the IRS sizing assets for payment of parents' unpaid taxes that are 35 years old!
That can only happen if the IRS proved the parents tried to hide assets through their children.
If you die, your debts die with you after assets are liquidated to pay them. That’s the law.
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