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Feb. 8, 2013
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Jewish World Review
May 23, 2012/ 2 Sivan, 5772
Student loans fail students
By
Jay Ambrose
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http://www.JewishWorldReview.com |
Education Secretary Arne Duncan says student loans don't push up tuition, but of course, they do, much like housing prices were pushed up by banks giving loans to people who could not afford the mortgages. Does anyone in Washington remember how that turned out?
Probably not. Washington encouraged the practice, which walloped our economy. But now it's time for another goof and more misery. The latest piece of craziness, promoted by President Barack Obama and seconded by Republican presidential candidate Mitt Romney, is to keep student loans at 3.4 percent instead of letting them go up to 6.8 percent after June, as a law calls for. That works out to be a taxpayer gift, and people love taxpayer gifts, so many students are cheering.
They shouldn't be. If Obama and Romney had agreed on a deal making sure college students got a regular kick in the rear, it would not be nearly as painful as this will be for some. Tuition does go up as easy loans proliferate. Let me explain why to Secretary Duncan, an education official who seems to need more education in pricing basics.
Like any self-interested party, colleges and universities are ordinarily going to charge what the market will bear. A chief source of their funding these days is student loans. Keeping interest rates low helps keep the loans proliferating. That means tuition can go up, with students still arriving in numbers that would not be possible for many of them if the government were not involved. If it were just up to banks, without the government guaranteeing loan repayment, interest would be much higher than the 6.8 percent rate and given only to the least risky applicants.
Tuitions increase at roughly twice the inflation rate, according to calculations from The College Board and other groups, and have risen at a far more rapid rate than the salaries paid by the jobs college graduates ordinarily obtain, some students of the subject point out. Some 37 million people are now student loan debtors who together owe something like $1 trillion, more than is owed on the nation's credit cards. The Project on Student Debt reported that two-thirds of college seniors graduating in 2010 owed an average of $25,250, while others will owe many times that much, which brings us to other ways the loans spell trouble.
They haunt students like a mustache-twirling villain, following them around as they start their careers, begin families, invest in cars and search out that first house. Sometimes, the loans are so high and the jobs pay so little that graduates can barely pay them -- or cannot foot the bill and must default -- and the burden can weigh on their lives for decades. Oh, well, there are others who can help them out: all those blue-collar workers who make a lot less but still get taxed to help fund this welfare program for those better off than they are.
Did Romney and Obama think of that? And how do they like Senate Majority Leader Harry Reid's way of finding the billions needed to make up the reduction of interest to 3.4 percent? He wants to raise taxes on some small businesses, which will be less likely to hire more people. That's one thing that can happen when you pass higher business taxes. An "Obamacare" tax on firms making medical devices has caused several of them to delay expansion, meaning fewer jobs. Even though Washington insists on running our lives, you sometimes think legislators could not wind a toy meant for 6-year-olds.
While we have incredible opportunities in this country at the moment -- oil and natural gas fields that could make this economy boom, for one -- we are in a major government-generated mess. It mostly has to do with spending that is often counterproductive and wasteful and cannot be continued at anywhere near present rates of increase without disaster. It's time to stop and quit the politics.
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Jay Ambrose, formerly Washington director of editorial policy for Scripps Howard newspapers and the editor of dailies in El Paso, Texas, and Denver, is a columnist living in Colorado.
Previously:
• 05/21/12: Europeanizing America into crisis
• 05/16/12: Obama a bully, too
• 05/15/12: Walker recall vote could swing national pension policy
• 05/07/12: Bumbling, fumbling, benighted, old Washington near tipping point where freedom is done for
• 05/02/12: The Communists cannot be happy
• 04/30/12: There's no objective truth, least of all concerning behavior
• 04/25/12: Forgive the extremist?
• 04/23/12: Educational excellence is a game
• 04/18/12: Obama's interventions help a few by the most autocratic, complicated, ineffective means possible, yet hurt many more
• 04/16/12: Overregulation strikes again: The nanny state threatens to turn us into children
• 04/11/12: Obama is not bonkers
• 04/04/12: Will America vote against authoritarianism?
• 04/02/12: 'Tipping point' on federal restraint approaches
• 03/28/12: Obama truth from an open mike
• 03/21/12: The progressive campaign for voter fraud
• 03/19/12: Public pensions will get us if we don't watch out
• 03/14/12: Politics needs reporting, not speculation
• 03/12/12: Home of the free, the brave, the endangered
• 03/07/12: Obama used Limbaugh as scapegoat
• 03/05/12: Campaign substance lost in media melodrama
• 03/01/12: When Big Brother drowns
• 02/24/12: Obama goes gaseous on gas
• 02/22/12: Political tears for trust in personal empowerment --- except in the bedroom
• 02/17/12: Of cut-off ears and silenced mouths
• 02/15/12: Obama is a joke whose antics aren't funny
• 02/10/12: An energy boom looms, despite Obama
• 02/08/12: Obama's assault on faith
• 02/03/12: Can Romney get serious?
• 01/27/12: Obama is like an Italian ship captain
• 01/25/12: Newt Gingrich's first 100 days
• 01/20/12: Obama's Keystone pipeline lies
• 01/18/12: Critics worse than urinating Marines
• 01/13/12: Ron Paul is a cartoonish character
• 01/11/12: Newt Gingrich upset by Mitt Romney's brilliance
• 01/09/12: How about regulating presidents, too?
• 01/04/12: How America smothers itself
• 12/30/11: A tax break that helps break the nation
• 12/28/11: Watch out for the banana peel, Newt
• 12/21/11: A tale of two men
• 12/16/11: Strange happenings in Russia
• 12/14/11: Tim Tebow is a man of character
• 12/09/11: A populist, envy-mongering fraud divisively exacerbating resentment among different groups of Americans
• 12/07/11: Tax games threaten nation
• 12/05/11: Why Wal-Mart serves us better than Barney Frank
• 11/30/11: Not writing off Newt
• 11/28/11: Answers to the Iranian threat
• 11/23/11: Failure of the incumbency investment
• 11/18/11: Occupiers: Chop off their heads!
• 11/16/11: Obama asks jobless to sacrifice
• 11/09/11: Michael Moore's insufferable occupation
• 11/04/11: Political tipping point is coming
• 11/02/11: Idealogues versus 7 billion
• 10/28/11: Obama games on student loans
• 10/26/11: Wit and quick moves v. humanity and thoroughgoing honesty? It's no contest - or at least shouldn't be
• 10/07/11: Baptists, bootleggers and Wall Street protesters
• 10/05/11: Federal law will get you even if you watch out
• 09/28/11: Leftist bugbears on the march
• 09/23/11: Still hope for coal to help us
• 09/21/11: Obama's Madoff ploy
• 09/19/11: U.S. can't afford to wait until it happens
• 09/14/11: Defending -- and strengthening -- gung ho collectivism
• 09/12/11: A pipeline to better times
• 09/08/11: Obama just keeps destroying jobs
• 09/06/11: Ultra-feminists thwarting justice
• 08/31/11: Corporations are people? Yes, Count the ways
• 08/26/11: What an earthquake tells us about debt
• 08/25/11: The tyranny of scientific consensus
• 08/23/11: Fracking hardly a public health threat
• 08/17/11: Why Obamacare won't control births
• 08/15/11: Balanced budget amendment unbalanced idea
• 08/10/11: Kerry's war on citizen speech
• 08/05/11: Upside to the compromise leaving the door open for obnoxious maneuvers
• 08/03/11: The people who may save America
• 07/29/11: On making deals, Obama is no LBJ
• 07/27/11: The threat behind the debt
• 07/23/11: Mean opposition to means-testing
• 07/20/11: Leftist babble makes debt crisis even worse
• 07/18/11: Time to raise demagoguery ceiling
• 07/13/11: Obama treating treaties badly
• 07/08/11: Is decline of U.S. exaggerated?
• 07/05/11: Not math deficiency, but demagoguery
© 2011, SCRIPPS HOWARD NEWS SERVICE
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