Jewish World Review Oct 28, 2011 / 30 Tishrei, 5772
Obama games on student loans
By Jay Ambrose
http://www.JewishWorldReview.com | The federal student loan program has been a whammy, the academic version of selling people mortgages they can't afford, generating $1.1 trillion in debt while fueling tuition hikes. That's more money than Americans owe on credit cards, huge numbers are defaulting, and here comes President Barack Obama with a solution. Only it's not. It's a farce.
In full campaign mode while once more neglecting the duties of office, Obama showed up at a Denver high school to outline more of his executive orders that will do absolutely nothing for 29 million of the 36 million paying off these loans, and something on the order of a smidgen for most of the others.
One move affecting roughly 6 million of the debtors, for instance, is to allow consolidation of private and public loans so as to reduce interest payments by half a percentage point, or less than $10 a month, according to a calculation by Atlantic magazine. But hold the chuckles. There's more.
The president also intends to reduce the mandatory amount due on some loans in 2012 from 15 percent of income a year to 10 percent, while allowing full forgiveness after 20 years instead of 25. The thing is, this change was due to go into effect in 2014 anyway, no more than 1.6 million will be eligible for it, and many of those probably won't sign up because, when you deal with Uncle Sam, it's not red, white and blue you are dealing with. It is only red. Red tape.
"We can't wait for Congress," Obama said while in the swing state of Colorado that could be absolutely crucial in next year's presidential election. The question is how much longer we can wait for Obama to get serious about the economy (not to mention the Constitution he is ignoring). Here he is trying to replicate Harry Truman's unexpected victory in 1948 by running against a "do-nothing Congress" when he ought to be seeking common ground on measures he has been hiding from for three years now.
You remember, of course, how he backed a do-nothing stimulus bill that worsened a debt that absolutely has to be restructured for the economy to purr. His real attention most of his first year in office was to a health care measure that raises deficits, raises costs, denies liberties and fixes virtually nothing that could not have been more cheaply accomplished. Advocates trotted out horror stories that could be trotted out under any system as if the bill would cure them. A favorite was how so many of the elderly could not afford long-term care.
Of course, the section of a mostly unread, 2,000-page bill that dealt with that issue was flimflam, as even Obama finally recognized in announcing it would go poof. Not too long before that, however, he had figured out a way to make his "reform" more expensive by making sure even the rich he wants to tax more will soon have to make no insurance co-payments on birth control purchases. The worst of the act is that it adds more to the debt and is scaring businesses out of expansion because of the costs and complications for them.
Time and again, government does that kind of thing. As too many have failed to notice, Congress prompted the fiscal crisis by conniving with Fannie Mae and Wall Street on means of getting mortgage loans to the unqualified. Among those later lying bloody on the ground were those awarded the unaffordable mortgages. Preoccupied with his health measure, Obama had some weak-kneed ideas to help them and lately came up with more weak-kneed ideas to bring down interest rates for those struggling the least.
The student loan program has been more of the same. While tuition charges have gone up beyond the ability of many families to pay, the government has made it easier for them to find the money in the short run, meaning tuition charges go up even more. The politically advantageous move is to pretend the guaranteed loans are rescue instead of culprit, but culprit they are.
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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.
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