Unitary executive proclaims student-loan regulation relaxations

posted at 10:45 am on October 26, 2011 by Ed Morrissey

As widely expected, Barack Obama has acted unilaterally again to heal this economy — heal it, I say — by proclamation.  This time, the Emperor — excuse me, President — has focused on student loans to ease our economic suffering, relaxing repayment regulations.  But is that enough?

The Obama administration is set to announce relaxations in student loan repayments on Wednesday, a third in a series of executive orders issued as part of the “we can’t wait” campaign to boost the economy without the help of Congress.

The amount of student loan debt Americans hold surpasses credit card debt, a fact that drove Congress to act in 2007 and create a “pay as you earn” program that allows former students to repay loans at a rate equal to 15 percent of their income. The new measure lowers that to 10 percent, but it is unclear whether the effort will be effective. The White House reports that only 450,000 students—out of an estimated 36 million borrowers—took advantage of the 2007 rule.

The problem here is that Obama can only relax repayment schedules for direct loans, where the federal government loaned the money directly to students.  Until last year, most loans came from the private sector, guaranteed by the federal government but still managed by the private lenders.  Obama and a Democratic Congress eliminated the guarantees in their “reform” of the student-loan industry, a reform that wipes out the “industry” entirely and forces students to deal directly with government instead.  Without getting Congress involved, Obama can’t do anything about the private-sector loans.

Besides, let’s not forget the point that Obama and the Democrats had the opportunity to entirely remake the student-loan system into what they wanted — and they did.  If Obama thinks that Congress has somehow failed students on student loans in the direct-loan sector (where his changes are taking place now), then it was his reform in the 111th Congress that he should blame, not the current Congress.

Speaking of which, some in this Congress note that Obama has set up a pretty profitable enterprise by making the executive branch the only banker in the nation for students:

Congress directed the Education Department to use that savings to expand Pell grants for low-and moderate income students to attend college. But many House Republicans who still oppose the move they say it has made the Department of Education one of the largest banks in the nation, largely unaccountable to Congress.

“This is another example of the Obama administration making changes to federal education policy behind closed doors,” said GOP committee spokeswoman Alexandra Sollberger in an e-mail. “We are disappointed that the Department of Education chose not to engage committee members prior to announcing this plan to the press.”

Republican critics also note that the Education Department charges 6.8 percent for loans that cost much less, “creating a pretty big slush fund for the government,” said Rep. John Kline (R) of Minnesota, who chairs the House Education and Workforce Committee, at Tuesday’s hearing.

He tabbed federal borrowing for the program “at less than 1 percent” – yielding a large profit.

What better way to have enough cash to make proclamations?  Note, though, that the actual impact of limiting payments is likely to be pretty small.  Former students will see payments cut by a third, which in theory gives them more money to spend elsewhere.  But Obama has also capped the payment schedule to 20 years (down from 25 in the Congressionally-enacted regulation), which means that taxpayers will end up eating more of the back end of these loans years into the future, since borrowers will pay less at these inflated interest rates and pay for a shorter period of time.  How much will taxpayers lose?  Since the level of lending is so significant, debt forgiveness is likely to stretch into the billions of dollars.

One final question: If Obama is keen on relaxing regulation to get the economy moving, how about relaxing it at the EPA so we can get energy production back on track and create jobs in that sector?  Or on Dodd-Frank?  Or ObamaCare, where Obama’s CLASS Act failed?

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Seems that not too long ago I recall Obama pushing this

http://finance.yahoo.com/news/APNewsBreak-Obama-seeks-debt-apf-585121864.html?x=0&.v=2

To the dismay of consumer groups and the discomfort of Democrats, President Barack Obama wants Congress to make it easier for private debt collectors to call the cellphones of consumers delinquent on student loans and other billions owed the federal government.

William Amos on October 26, 2011 at 10:51 AM

But many House Republicans who still oppose the move they say it has made the Department of Education one of the largest banks in the nation, largely unaccountable to Congress.

Looks like the OWS loonies missed one of the biggest banks to protest. Occupy The Dept. of Education!

a capella on October 26, 2011 at 10:52 AM

“Here’s some play money, vote fo me.”

fogw on October 26, 2011 at 10:52 AM

All hail dear leader!

cmsinaz on October 26, 2011 at 10:52 AM

If the emperor can set up these “banks”, going around congress… how long until there are 100 of them?

And who funds them, oh yes, the tax, er, fee payers.

looks good on paper Barry, but it won’t work!

golfmann on October 26, 2011 at 10:52 AM

I sure hope a new congress can privatize these loans again

karenhasfreedom on October 26, 2011 at 10:53 AM

With the lsm, he will blame this congress and the folks who don’t pay attention will believe him, nevermind this is his boondoggle

cmsinaz on October 26, 2011 at 10:54 AM

“Here’s a trillion bucks. Please remember me on election day,” -Obooba.

Akzed on October 26, 2011 at 10:55 AM

Can drum subsidies be far behind?

RBMN on October 26, 2011 at 10:56 AM

The White House reports that only 450,000 students—out of an estimated 36 million borrowers—took advantage of the 2007 rule.

This is just stupid. If a person’s loan payment is less than 15% of their income they would not be eligable to take advantage of the 2007 rule.

The problem here is that Obama can only relax repayment schedules for direct loans, where the federal government loaned the money directly to students.

This certainly has an effect on the numbers above in terms of who is taking advantage of the 2007 rule. But I am still curious just how many are actually paying more than 15% of their income to service a student loan.

NotCoach on October 26, 2011 at 10:57 AM

It’s just like the housing crisis. The problem isn’t the amount of the payments on the loans. It’s that the people who took out these loans can’t afford to make the payments, no matter how much leeway you give them. It’s why you have these delusional 20-somethings out in the streets demanding debt forgiveness.

Doughboy on October 26, 2011 at 10:58 AM

Obama got his stimulus, his Obamacare, his banking regulations and now this.

Supporters are going to start noticing that none of this stuff is helping them.

forest on October 26, 2011 at 10:58 AM

Why am I, a moderately successful business owner, who left college after one year because I felt it was a waste of money, paying for other people’s tuition?

emz35 on October 26, 2011 at 10:58 AM

The problem here is that Obama can only relax repayment schedules for direct loans, where the federal government loaned the money directly to students. Until last year, most loans came from the private sector, guaranteed by the federal government but still managed by the private lenders.

I can’t imagine why this would make anyone feel any better. This is just a bomb waiting to go off.

Missy on October 26, 2011 at 11:00 AM

I must have missed the section of the Constitution that enables the SCoaMF to do whatever he damn well pleases about anything he chooses.

Or is there a special exemption from our laws written in specifically for President Historic First©?

MrScribbler on October 26, 2011 at 11:00 AM

Maybe those who have the older loans will realize this ‘tool’ president is a sham. They are stuck with their current rate and payments. They should have thought twice about signing on the dotted line for loans, found a cheaper school to go to for the first 2 years and gotten a job to pay as they go. They also could have gotten a degree in something where they could have a better job to pay the loans back.

Kissmygrits on October 26, 2011 at 11:01 AM

heal it, I say — by proclamation.

Clamo sanare!

Latin, I think, for healing by proclamation.

ted c on October 26, 2011 at 11:02 AM

Why is no one moving to impeach this sonofab*tch? The constitution is clear. The president doesn’t just get to unwrite law and rewrite his own.

Where is the frikkin GOP? Why is this unconstitutional power grab not being screamed from the mountaintops from all corners?

Is it not yet clear to EVERYONE that this man will do WHATEVER he believes he can get away with in the service of Leftism?

The only thing preventing him from becoming a full-blown dictator is that he hasn’t tried it yet.

This is going nowhere good.

IronDioPriest on October 26, 2011 at 11:03 AM

looks good on paper Barry, but it won’t work!

golfmann on October 26, 2011 at 10:52 AM

Oh, yes it will! The minute he declares a national state of emergency and cancels the elections.

Rovin on October 26, 2011 at 11:04 AM

Since student loans are all federal, I bet tax payers are going to love that extra burden!

One final question: If Obama is keen on relaxing regulation to get the economy moving, how about relaxing it at the EPA so we can get energy production back on track and create jobs in that sector? Or on Dodd-Frank? Or ObamaCare, where Obama’s CLASS Act failed?

Obama relax the EPA? Never. Dodd-Frank? Never. ObamaCare… this is Obama’s New Deal. So we already know that is a NEVER!

upinak on October 26, 2011 at 11:04 AM

Edico curatio!

ted c on October 26, 2011 at 11:05 AM

Mr. President, it would work better if you’d unilaterally declare that only the top 10% of any graduating class is eligible to attend a four year school.

rogerb on October 26, 2011 at 11:05 AM

Oh, yes it will! The minute he declares a national state of emergency and cancels the elections.

Rovin on October 26, 2011 at 11:04 AM

prep on. But scaring people is not going to help, even though i know how you feel about this.

upinak on October 26, 2011 at 11:05 AM

I said this yesterday. I think it’s wrong for Uncle Sam to charge U.S. citizens interest. We should pass a law to that effect.

The Feds shouldn’t be in the loan business anyway. If we graded them as a bank, would they pass a stress test? Politicians decide to loan everybody money, and then forgive those loans. Taxpayers end up backstopping poor decisions and laziness.

Taking away the financial incentive for government to give loanscould only help get gov’t out of the banking business. And the less money bureaucrats have access to, the less damage they can do.

hawksruleva on October 26, 2011 at 11:09 AM

Is this even Constitutional?

MeatHeadinCA on October 26, 2011 at 11:10 AM

Why is no one moving to impeach this sonofab*tch? The constitution is clear. The president doesn’t just get to unwrite law and rewrite his own.

IronDioPriest on October 26, 2011 at 11:03 AM

What is this Constitution you speak of? Has anyone in Washington ever been lobbied by it?

hawksruleva on October 26, 2011 at 11:10 AM

This is going nowhere good.

IronDioPriest on October 26, 2011 at 11:03 AM

I’m expecting the word “impeach” to soon join the HA “no-no filter” block list.

Apparently, there is some good political-appearance reason why we cannot hold the SCoaMF to account for his High Crimes and Misdemeanors here. Or maybe it’s just that the prevailing attitude is that Osama Obama’s violations of his oath of office and all-around America-hating behavior are mere “Obamateurisms.”

MrScribbler on October 26, 2011 at 11:11 AM

A third in a series of executive orders issued as part of the “we can’t wait” campaign to boost the economy without the help of Congress.

When did El Presidente Downgrade ever take this pressing issue to congress?

How can you ‘Wait’ for an issue to be addressed when it was never brought up in the first place in a legislative sense?

Chip on October 26, 2011 at 11:11 AM

I keep remembering Barry’s explanation for the Solyndra CF. Paraphrasing, “Well, we knew upfront that some of these companies weren’t going to be successful.”
Playing roulette with house money is fun.

a capella on October 26, 2011 at 11:11 AM

Just wait till he becomes a lame duck…he’ll try and finish us off…

PatriotRider on October 26, 2011 at 11:12 AM

Obama got his stimulus, his Obamacare, his banking regulations and now this.

Supporters are going to start noticing that none of this stuff is helping them.

forest on October 26, 2011 at 10:58 AM

Don’t forget that Obamacare included a big student loan aspect. It was part of the shenanigans to make the bill look like a cost-cutting measure. You know, along with collecting payments on CLASS for years before it became another deficit-building handout.

hawksruleva on October 26, 2011 at 11:12 AM

I keep remembering Barry’s explanation for the Solyndra CF. Paraphrasing, “Well, we knew upfront that some of these companies weren’t going to be successful.”
Playing roulette with house money is fun.

a capella on October 26, 2011 at 11:11 AM

It’s worse than Soyndra. After the students that do manage to put in some work in their studies graduate, they’ll find a jobless future. It’s like a double-fraud.

MeatHeadinCA on October 26, 2011 at 11:13 AM

WOOHOO

I decided to go back to school two years ago and I am using a combo of GI Bill scholarships and student loans

seaniep on October 26, 2011 at 11:13 AM

Are student loans going to be bundled?

Cindy Munford on October 26, 2011 at 11:14 AM

How can you ‘Wait’ for an issue to be addressed when it was never brought up in the first place in a legislative sense?

Chip on October 26, 2011 at 11:11 AM

Actually, Congress already passed this bill. Obama just wants to speed up implementation of it to 2012 so he can look good to all his slacker college loser buddies.

hawksruleva on October 26, 2011 at 11:14 AM

How can you ‘Wait’ for an issue to be addressed when it was never brought up in the first place in a legislative sense?

Chip on October 26, 2011 at 11:11 AM

Y’mean like those free trade agreements he blasted Congress for ignoring, while they sat unnoticed on his desk in the Oval Office, just off to the side of where he puts his feet?

a capella on October 26, 2011 at 11:14 AM

Why is no one moving to impeach this sonofab*tch? The constitution is clear. The president doesn’t just get to unwrite law and rewrite his own.
 
IronDioPriest on October 26, 2011 at 11:03 AM

 
First black president. Simple as that.

rogerb on October 26, 2011 at 11:14 AM

This time, the Emperor — excuse me, President — has focused on student loans to ease our economic suffering, relaxing repayment regulations.

student loans are merely a symptom of a different problem…expensive university tuition. The average rate of rise for tuition is what 5-7% per year. Why do universities get off scot free?

ted c on October 26, 2011 at 11:15 AM

The point of this, of course, isn’t really do to much of anything for the students’ bottom line, long-term, and it has nothing to do with actually reforming the system or dealing with the overpriced college education costs. It’s all about the headline and the 10-second sound bite from the supportive big media, followed by the spin that those opposed to Obama’s program hate college students and young adults.

But even then, it’s hard to see Obama recapturing the magic with the 18-30 crowd, if they both owe student loans and can’t get a decent job because Obama’s failed economic policies haven’t ended the recession. He’s going to end up having to fly Air Force One over college campuses dropping brand-new $100 bills out of the plane to recapture the youth vote enthusiasm of 2008, and odds are any giveaways to the young voters isn’t going to sit all that well with the swing voters.

jon1979 on October 26, 2011 at 11:16 AM

When one is not a leader, they must rule by decree not through leadership.

albill on October 26, 2011 at 11:16 AM

Why do universities get off scot free?

ted c on October 26, 2011 at 11:15 AM

Because the flow of money doesn’t get cut off…

MeatHeadinCA on October 26, 2011 at 11:17 AM

Are student loans going to be bundled?

Cindy Munford on October 26, 2011 at 11:14 AM

I would say no.

upinak on October 26, 2011 at 11:18 AM

student loans are merely a symptom of a different problem…expensive university tuition. The average rate of rise for tuition is what 5-7% per year. Why do universities get off scot free?

ted c on October 26, 2011 at 11:15 AM

you forgot the cost of the books and the lab fees and the parking fees and all the other freaking fees.

upinak on October 26, 2011 at 11:19 AM

Obama: The political equivalent of Ernest Angsley.

(BTW, they both have the same kind of private jet…B-747s)

BobMbx on October 26, 2011 at 11:21 AM

healing by proclamation

All American health care needs will be free

All college tuition will be free

All home mortgages will be forgiven

All illegal immigrants are now nationalized citizens

All financial institutions (private and public) will not receive payments for two years. Subsidies will be supplied by the government.

All golf courses will be played for free

OWS can declare victory—-mission accomplished!

Final Proclamation: Personal income taxes will be 300% of current levels……..Have a nice day.

Signed, His Majesty, Barack H. Obama

Rovin on October 26, 2011 at 11:21 AM

Pleeeeeeeeeeeeeeeeease tell me these college educated students are smart enough to recognize a bribe when it’s coming at them!?!

capejasmine on October 26, 2011 at 11:26 AM

We should not have to repay the portion of our student loans used for tacos at 3 a.m.! /

gmbdds on October 26, 2011 at 11:27 AM

Why do universities get off scot free?

ted c on October 26, 2011 at 11:15 AM

Because the flow of money doesn’t get cut off…

MeatHeadinCA on October 26, 2011 at 11:17 AM

that’s the thing in his argument, it’s incomplete. It is one thing to help someone out with their student loans, but it is intellectually dishonest if you aren’t simultaneously asking the question, “Why is the cost of a college education so damn high?”

without asking that question, meathead is right, the flow of revenue to the universities, and an extraordinary flow it is, is not threatened.

ted c on October 26, 2011 at 11:27 AM

First black president. Simple as that.

rogerb on October 26, 2011 at 11:14 AM

The color of the mans skin has nothing to do with his contempt for the Constitution. Nothing! And, I find your comment a disgusting display of ignorance.

Rovin on October 26, 2011 at 11:28 AM

Pleeeeeeeeeeeeeeeeease tell me these college educated students are smart enough to recognize a bribe when it’s coming at them!?!

capejasmine on October 26, 2011 at 11:26 AM

that depends.. have you met some of these kids? I can tell you many are book smart, but common sense dumb as a freaking rock.

upinak on October 26, 2011 at 11:28 AM

You know what was a great idea? Cash4Clunkers!

visions on October 26, 2011 at 11:29 AM

without asking that question, meathead is right, the flow of revenue to the universities, and an extraordinary flow it is, is not threatened.

ted c on October 26, 2011 at 11:27 AM

I’m convinced education costs would go down on average

… of course, some people’s costs would go up. Any guess on whose?

MeatHeadinCA on October 26, 2011 at 11:32 AM

I’m convinced education costs would go down on average

… of course, some people’s costs would go up. Any guess on whose?

MeatHeadinCA on October 26, 2011 at 11:32 AM

*if the gov’t got out of education, that is

MeatHeadinCA on October 26, 2011 at 11:33 AM

I said this yesterday. I think it’s wrong for Uncle Sam to charge U.S. citizens interest. We should pass a law to that effect.

The Feds shouldn’t be in the loan business anyway. If we graded them as a bank, would they pass a stress test? Politicians decide to loan everybody money, and then forgive those loans. Taxpayers end up backstopping poor decisions and laziness.

Taking away the financial incentive for government to give loanscould only help get gov’t out of the banking business. And the less money bureaucrats have access to, the less damage they can do.

hawksruleva on October 26, 2011 at 11:09 AM

I agree the government should be in the loan business at all, but if they are, they absolutely should be charging interest at at least market rates. Milton Friedman on the topic

emz35 on October 26, 2011 at 11:36 AM

“I agree the government shouldn’t be…”

emz35 on October 26, 2011 at 11:36 AM

Republican critics also note that the Education Department charges 6.8 percent for loans that cost much less, “creating a pretty big slush fund for the government OFA Campaign Fund,”

That’s more like it.

Hiya Ciska on October 26, 2011 at 11:37 AM

The color of the mans skin has nothing to do with his contempt for the Constitution. Nothing! And, I find your comment a disgusting display of ignorance.

Rovin on October 26, 2011 at 11:28 AM

I think he was referring to reluctance to impeach. Political reality plays a role.

a capella on October 26, 2011 at 11:37 AM

You know what was a great idea? Cash4Clunkers!

visions on October 26, 2011 at 11:29 AM

Cash4Drunkards

faraway on October 26, 2011 at 11:38 AM

And, I find your comment a disgusting display of ignorance.

Rovin on October 26, 2011 at 11:28 AM

Your comment doesn’t “disgust” me, but you are showing some serious ignorance, too.

The entirety of Osama Obama’s adult life has been based on set-asides, undeserved helping hands and promotions-beyond-skill-level based solely on the color of his skin. Guilt (based on the color of his skin versus the color of those feeling “guilty”) played a major role in his electoral success as well.

There is no sugar-coating or sidestepping the truth. The SCoaMF has vigorously exploited his color, and has been allowed to do so.

Many “conservatives” have avoided this issue because it’s “bad optics” to bring it up. But it is so, and one would have to be totally irrational to believe otherwise.

Love him or hate him, Herman Cain is a far better example of true racial equality in action than the Traitor-in-Chief.

MrScribbler on October 26, 2011 at 11:39 AM

Lets check our list shall we. Distressed mortgage holders.yes, college loans, yes. Now who have we missed? Oh yeah, I’ve got to do something to reel in the Hispanic community vote …Amnesty?I almost forgot the Black community… what to do there? Reparations? Nah they’ll vote for me anyway.

sandee on October 26, 2011 at 11:50 AM

I think he was referring to reluctance to impeach. Political reality plays a role.

a capella on October 26, 2011 at 11:37 AM

After re-reading the statement, (in the proper context) rogerb on October 26, 2011 at 11:14 AM, I stand humbly corrected. My sincere apologies to rogerb for the my insensitive and inappropriate remarks—I was wrong.

Rovin on October 26, 2011 at 11:53 AM

Oh goodie.

This is for direct government loans thus far.

At what point, under some sort of interpretation of TARP, will private lenders be required to follow dictats from the White House?

Otherwise, seems this new Executive Order is discriminatory from the starting gate.

coldwarrior on October 26, 2011 at 11:53 AM

I think he was referring to reluctance to impeach. Political reality plays a role.
 
a capella on October 26, 2011 at 11:37 AM

 
Got it on the first shot.
 
Rovin, lots of the times posters will highlight the specific part of a comment they’re responding to. Please re-read my 11:14am with this in mind.

rogerb on October 26, 2011 at 11:54 AM

But Obama has also capped the payment schedule to 20 years (down from 25 in the Congressionally-enacted regulation), which means that taxpayers will end up eating more of the back end of these loans years into the future

I haven’t been following much of the school loans debate (having paid off my own school loans several years ago), but is the deal now that a student’s loans are simply forgiven after 20 years, and taxpayers just have to eat the loss on any remaining unpaid balance?

AZCoyote on October 26, 2011 at 11:54 AM

This is yet another issue that I wrote about on one of my websites A LONG TIME AGO — what Obama planned to do and has done since I wrote about the plans to do so — as to the INCREASE IN EXPENSES for the student loan “industry”.

And yet hapless, even stupid, college age new voters swooned over this awful man and voted for him anyway.

I wrote about it, the signs were all there what his wretched plans were, yet that, as with other information about this awful man, were ignored.

He’s made student loans more expensive, as if they are not already expensive beyond reason. He is no friend to the college-borrower.

Lourdes on October 26, 2011 at 11:56 AM

I think this program only works for those who basically have low incomes in relation to student debt.

jp on October 26, 2011 at 11:57 AM

But Obama has also capped the payment schedule to 20 years (down from 25 in the Congressionally-enacted regulation), which means that taxpayers will end up eating more of the back end of these loans years into the future

I haven’t been following much of the school loans debate (having paid off my own school loans several years ago), but is the deal now that a student’s loans are simply forgiven after 20 years, and taxpayers just have to eat the loss on any remaining unpaid balance?

AZCoyote on October 26, 2011 at 11:54 AM

@ AZCoyote: yes.

And he’s made the interest rate on student loans rise. Everyone loses.

Lourdes on October 26, 2011 at 11:57 AM

The White House reports that only 450,000 students—out of an estimated 36 million borrowers—took advantage of the 2007 rule.

Obama helped out the 1%-ers.

Jaibones on October 26, 2011 at 11:59 AM

Just another “class” to pander to before the elections.

GarandFan on October 26, 2011 at 12:00 PM

MrScribbler on October 26, 2011 at 11:39 AM

Like I said, I did not read rogerb’s statement in the proper context—my bad. Admonition accepted.

Rovin on October 26, 2011 at 12:01 PM

I am sure this new Obama dictat is going to provide ample incentive for all civic minded well educated students to pay off their loans as soon as possible without any hassles.

Back in the day if one was delinquent on their federally-sponsored student loans, good luck trying to find federal employment, and often employment in general. That, that was incentive.

Not this well if you are having a tough time, we’ll cover it for you garbage.

“Bohica!”

coldwarrior on October 26, 2011 at 12:02 PM

I sure hope a new congress can privatize these loans again

karenhasfreedom on October 26, 2011 at 10:53 AM

They never will; there’s too much money to be made for Congress and Administrations to spend. Even when “privatized,” they still must be federally guaranteed in order for private lending to engage in them (high risk loans to people with little to no credit histories, nor employment, with a requirement of a long delay before expecting repayment — private lenders won’t engage in student loans unless they’re guaranteed by the fed. to be repaid if ever in default).

What happens when student loans default is that the fed. reimburses the loan amount to the private lender. Then the fed. goes after the borrower.

What’s happened is it’s become an industry with college tuition and costs overall going so high in the last few decades as to be nearly unaffordable for the general person unless they’re of wealthy means or have the blessing of a college-fund well padded by conscientious adults.

The costs of college are what should be at stake. The rich employment situations by faculty are a large part of why the costs are so high, as also the facilities themselves that various unions and political persons keep funding with taxpayer dollars.

Lourdes on October 26, 2011 at 12:04 PM

Again… not one mention about lowering the costs of tuition. The Republicans need to make this a key point in the election. College is too much. Why? Because the professors are making a nice “profit”. They must be evil…

jeffn21 on October 26, 2011 at 12:08 PM

Pleeeeeeeeeeeeeeeeease tell me these college educated students are smart enough to recognize a bribe when it’s coming at them!?!

capejasmine on October 26, 2011 at 11:26 AM

No, they don’t. At that age, few to none do. I can look back on my lengthy college years and admit that I often couldn’t see past the fact that I either qualified for a grant or I didn’t.

There is something not quite set in the human mind during the college age years. It seems the tendency to fall for “hope and change” like a bright, shiny object is far too tempting for most.

College agers ignored the news that Obama had at the ready a plan to increase college-loan interest rates if elected and college-agers voted for him anyway.

Lourdes on October 26, 2011 at 12:09 PM

Again… not one mention about lowering the costs of tuition. The Republicans need to make this a key point in the election. College is too much. Why? Because the professors are making a nice “profit”. They must be evil…

jeffn21 on October 26, 2011 at 12:08 PM

You’re right. It’s a big issue and really needs airing nationally, and, the costs reduced. It’s out of hand, the costs of college, of even attending.

I remember decades ago with my last college experience, and the student handbook had annual costs identified for students so we could budget accordingly, have enough money available to complete a course of study.

The books and materials costs identified even then — this is just one example — were more than four times what was reported by the university. One book, then, among two dozen required was about a hundred bucks if not more, so figure that in quarters year ’round. Just for books.

And that was several decades ago. The tuition and housing costs (plus all the rest necessary to maintain a life for four or more years) were, THEN, about 1200% more than what my older brother had to spend for the same experience three decades earlier.

Lourdes on October 26, 2011 at 12:13 PM

Doughboy on October 26, 2011 at 10:58 AM

That is definitely a gross and incorrect oversimplification. When you buy a house you’re loan is based on your current earnings. Student loans are based on potential earnings. You’re sold a bill of goods by the education system about how important a college degree is to your earning potential. While people will throw out comments about art and history degrees being useless that is also false. Thousands of art and history degrees from people who should have never been in college in the first place is what makes the degree useless.
The fact is that college is peddled for the enrichment of a few.

jdkchem on October 26, 2011 at 12:22 PM

Like I said, I did not read rogerb’s statement in the proper context—my bad. Admonition accepted.

Rovin on October 26, 2011 at 12:01 PM

No problem.

It really does bug me when anyone hides behind the issue of race (or uses race as an excuse), no matter which “side” they’re on.

I find it equally abhorrent that Osama Obama exploits his race as I do that a few idiotic others condemn him because of it.

Would be nice if HA started treating him like any other slimeball politician and not letting him slide. Maybe I have the wrong idea about the “reasoning” at work, but I don’t think so.

MrScribbler on October 26, 2011 at 12:35 PM

The government also charges a 4% upfront origination fee on direct student and parent loans. It’s a big damn pot of money and nobody knows how it is being managed.

Rick Perry needs to get back to talking about his idea of a $10,000 college degree. Obama is once again thinking small and tinkering around the edges when the whole system needs a disruptive change.

Not enough people are talking about how the whole Federal college finance system is another slush fund to support reliable Democratic voters – college students and liberal professors and administrators. Our tax dollars are going to support endless tuition increases for universities so they can continue to pay outrageous salaries to mostly liberal professors — who do nothing for our economy, but do help indoctrinate new generations of liberal voters. That “top 1%” includes most of the faculty of the Ivy League and top private and state universities. Elizabeth Warren was paid over $300,000 a year by Harvard Law School, to teach one class.

This entire Administration has been one giant Chicago-style theft operation to subsidize reliable Democratic constituencies, shield them from any pain, job losses, salary cuts, and get their salaries recycled back into contributions for Democratic campaigns. There is an overarching theme of corruption that could be exploited by any Republican candidate that chooses to pick it up and run with it.

rockmom on October 26, 2011 at 12:41 PM

The little dictator just doesn’t know where or when to stop.

rplat on October 26, 2011 at 12:45 PM

Given

1)a maximum of ten percent of income
2)a maximum of twenty year payment period
3)the student’s major

It is possible to estimate the student’s future income and thus the maximum amount the students will repay.

Will the federal government ever use this information to cap the loans available to students as a cost savings measure?

agmartin on October 26, 2011 at 12:46 PM

The little dictator just doesn’t know where or when to stop.

rplat on October 26, 2011 at 12:45 PM

Dictator? Did somebody call for the Great Dictator?

coldwarrior on October 26, 2011 at 12:52 PM

If this was so easy, what’s with all the cuteness and delays in “helping” homeowners?

Why doesn’t Obama just unilaterally (unitarily?) proclaim that mortgage payments need not exceed 10% of discretionary income?

Oh, yeah, that’s right. Because student loans are a controlled perk of the executive fiefdom now. Mortgages are still subject to oversight from all those other pesky stakeholders.

J.E. Dyer on October 26, 2011 at 12:52 PM

Remember when people used to pay back money they borrowed?

emz35 on October 26, 2011 at 12:53 PM

Remember when people used to pay back money they borrowed?

emz35 on October 26, 2011 at 12:53 PM

Yeah, like how dumb was that????

I coulda got a bailout or somethin’.

:-)

coldwarrior on October 26, 2011 at 12:55 PM

coldwarrior on October 26, 2011 at 12:55 PM

How dumb am I for not owing any money to anyone? What a fool. ;-)

emz35 on October 26, 2011 at 1:06 PM

agmartin on October 26, 2011 at 12:46 PM

In my field, chemistry, you’ll have a tough time getting any sort of reliable estimate of future income. And unless you can land a position as a lab manager your income is pretty stagnant.
What really aggravated me was every recruiter was looking for sales people when I graduated. Outside of government the actual lab jobs were close to nil. I went into the sciences because I am not interested in sales. Had I known that sales was the near only option going in I would have applied to Walmart instead of college and been better off financially in the long run.

jdkchem on October 26, 2011 at 1:15 PM

Yet another odumbo lie and end around deception to placate the simpletons on the left. This guy should have been impeached long ago for damage inflicted on the country. He will go down in history as the worst president in the history of the republic by virtue of his communist policies.

ultracon on October 26, 2011 at 1:33 PM

agmartin: I’ll do a model on this! This is a really interesting question.

Do you want a high-level systems dynamics model, or an agent-based model? ;)

Scott H on October 26, 2011 at 2:35 PM

Speaking of which, some in this Congress note that Obama has set up a pretty profitable enterprise by making the executive branch the only banker in the nation for students:

Congress directed the Education Department to use that savings to expand Pell grants for low-and moderate income students to attend college. But many House Republicans who still oppose the move they say it has made the Department of Education one of the largest banks in the nation, largely unaccountable to Congress.

By nationalizing all student loans via an amendment to the ObamaCare law, Obama essentially gave HIMSELF monopoly power over lending money to college students, able to buy their votes now and gouge them (and their parents) later.

Does anyone doubt that a private bank, which can borrow money from the Fed at less than 1% interest, wouldn’t want to jump into this market and make student loans at less than 6.8% (when some of them are offering mortgages at 4%) if they were legally allowed?

Barack Hussein Obama–usurer and monopoly dictator, until November 2012.

Steve Z on October 26, 2011 at 3:18 PM

jdkchem on October 26, 2011 at 1:15 PM

The lab jobs are there, they’re just overseas (India, Japan).

We don’t build plants or labs in the U.S. anymore. We have built TFE plants in India and China. We’re building labs over there as well and doing what stateside research work we have at Universities.

NIMBYism killed all the plants in the U.S., where NIMBYism failed, the lawyers came in and injuncted the hell out of construction. Yet in China and India we can get plants built and the research labs are following.

If you want to stay in Chemistry in the U.S., it’s government or university. If you can get a couple of patents under your belt, there’s a good consultant market, but you’re going to have to be willing to travel. $750 to $1000 a day plus expenses overseas, $300 to $500 a day in the U.S. for on-site, you can bill about $200 a day for work from home.

I feel for you getting into it now. Best advice, stay single, live cheap, get a few patents, be ready to work out of a suitcase for a few years, then try to settle into a University and bring contracts to them and do your research with doc students (imported from India and China most probably).

Sorry. . . but that seems to be the state of the industry now.

Jason Coleman on October 27, 2011 at 2:03 AM

Back of the napkin numbers on this new plan for student loan.

Plan on 20 years of payments, then the rest is forgiven.

Go to an expensive school in an outrageous cost of living market. Sign up for the maximum credit hours with the highest fees, get your loans in for as much as you can. Then drop down to the minimums and get your fees back or prorated (pocket the cash, invest it quickly, pick the right school/classes and we’re talking 6 figure portfolio upon graduation).

If you pick a decent field, one with an actual job at the end (not medieval languages or folk art of the Upper Volta) and you should be able to come out significantly ahead when you hit 45, and without much pain along the way.

Look into AmericaCorp or the Teacher programs to trade 5 years for 10 years of payments, and be out from under your loans by 30-35.

Sign up for the upper level language classes that have trips overseas associated with them, or archaeology classes with digs in the middle of nowhere, after you get them funded from Obama, drop the class before the cutoff and make sure you price/book refundable tickets (you can actually pay extra for this feature up front, and it pads the bill/take).

You’d really have to be a scumbag to do this, but if I can figure it out in a few minutes on a scratchpad, the professional students who this is designed for/by will have it figured out by now too.

Jason Coleman on October 27, 2011 at 2:16 AM

As I read this article thinking on socialism all I can hear ringing in my ears is Tennessee Ernie Ford singing “16 Tons”.

{^_^}

herself on October 27, 2011 at 3:59 AM