More than 70% of federal spending goes to various dependency programs for the poor, homeless, the disabled and farmers, not to mention the oppressed, the hungry, the thirsty, the phone less, now the dems are adding college students to the mix. It started in 2006 by the dems while pandering for the youth vote by campaigning on a promise to cut the 6.8% rate on some federal loans in half. Hr 2669, the “college cost reduction and access act championed by Pelsoi and Miller passed in the summer of 2007.
Democrats employed an accounting trick to hide the true cost of the student loan interest rate cut. They avoided the obligatory decade-summary line item at $6 billion a year, a ten year $60 billion price tag. Instead, Pelosi and Co. tallied only half the cost, sun setting the subsidy after five years and thereby setting a familiar trap. The five years is now up as of 71/12. If nothing is done the rate returns to 6.8%.
Today around 40% of Americans have some kind of college degree—30% have a bachelor’s degree form a four-year college. The rest have an associate’s degree from a 2-year college. Contrast to 1940 when fewer than 5% had a college degree.
Enrollments have exploded from the 2.3 million in 1947 to 12.1 million in 1980. Now over 20 million. Jonathan Robe from the center of college affordability states—“cheap and readily available subsidized student loans have contributed to the tuition explosion.
Over the past quarter-century the cost of college, adjusted for inflation, has tripled. Here the dirty little secret: the more a college charges for tuition, the more student loans cash it rakes in.
Cato estimates that it cost roughly $8,000 to educate an undergraduate at a typical residential college, yet tuition averages almost $16,000 at a public university and $37,000 for a private college. Take California’s 21% instate tuition increase.
The student aid and fiscal responsibility act, a rider passed along with Obamacare, cut out private lenders and forced all student loans to be administered by the Department of Education. Then there was the regimes executive order last October—the income based repayment (IBR) plan—to, along with other perks, forgive student loans debt after 20 years.
According to Heritage, politicians have created s system “where virtually anyone is eligible for a student loan, regardless of credit history or repayment potential. But unlike other loans taxpayers are on the hook when students default or incur other losses.”
Investor’s business daily that “hook” could total $850 billion. The current rate of student default: 23%, reports George Will.
53% of college grads under 25 are either unemployed or underemployed.
CENGAS, “the new group are College-educated, Not going anywhere people per Zogby, now living with mom and dad. Personal responsibility has been left out of the equation.
The democrat’s solution—you guessed it: even more federal intrusion into the student loan industry. Obama wants to “shift taxpayers’ dollars in favor of schools that restrain tuition and graduate more low-income students.” Then he wants to throw a billion dollars at trying to “encourage cost-savings innovations in colleges. The Student Loan Forgiveness Act of 2012, by Hansen Clark, which would forgive student loans after 10 years (five for teachers or public servants) and cap interest rates at 3.4%.