Obama’s Democrats want to stick Republicans with student loan interest rates they themselves mandated.
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Now that the housing bubble has burst, and Americans have spent a few years paying down credit card debt, one of the few remaining bubbles is in higher education. Earlier this year, for the first time in our nation’s history, student loan debt surpassed credit card debt; student debt is now estimated at over $1 trillion.
Economist Alan Nasser, in an article entitled “The Student Loan Bubble,” points out that states’ budget constraints cause tuition increases at public universities to increase, which pushes students into private, and particularly for-profit, institutions. As for “the health of student loans,” Nasser notes that “Only 40 percent of [outstanding student loan] debt is actively being repaid. The rest is in default, or in deferment (when a student requests temporary postponement of payment because of economic hardship), which means payments and interest are halted, or in forbearance.”
Despite the political sensitivity of tuition costs, colleges feel too able to raise prices because government will raise the availability of loans to match. And if you’re an 18-year-old borrowing money to be paid back over a decade or more after you get that dream job, it certainly feels like education is somewhere between cheap and free. If it sounds remarkably like how people think of health care these days, the results of that thinking are apparent in both: Between 2000 and the middle of 2011, the cumulative change in the Consumer Price Index was about 34 percent (with the core, excluding food and energy, up just over 25 percent). The medical care component rose 56 percent, while college tuition and fees rose an incredible 101 percent.
And what are our young adults getting for their money? Not very much, in terms of employment prospects, unless they choose majors that qualify them for industries with strong demand for employees.
According to the AP, in 2011 “young college graduates were heavily represented in jobs that require a high school diploma or less. In the last year, they were more likely to be employed as waiters, waitresses, bartenders and food-service helpers than as engineers, physicists, chemists and mathematicians combined (100,000 versus 90,000). There were more working in office-related jobs such as receptionist or payroll clerk than in all computer professional jobs (163,000 versus 100,000). More also were employed as cashiers, retail clerks and customer representatives than engineers (125,000 versus 80,000).”
Furthermore, “According to government projections released last month, only three of the 30 occupations with the largest projected number of job openings by 2020 will require a bachelor’s degree or higher to fill the position — teachers, college professors and accountants.”
It is the overall economy combined with students’ individual choices that are responsible for their financial woes. Contrary to the woe-is-me whining of Occupy Wall Street’s many unemployed denizens, it is neither moral nor constitutional for taxpayers to bear the burden of someone’s decision to get a degree in theater instead of computer science.
Barack Obama, pandering to one of the few voter groups that might still support him aggressively in 2012, says repeatedly that “In America, higher education cannot be a luxury.” But college education is not, as many college students apparently believe, a right (in the sense of being something that must be provided to them in part or in whole on someone else’s dime). It is a luxury; we are fortunate that it is one so many in our nation can afford. But like all luxuries, it is the consumer’s responsibility, not government’s, to find a way to pay for it.
Fortunately, even the idealistic residents of college dormitories (though not their tenured professors) have been awakened to the depressing job prospects after they’re handed diplomas and wished good luck in this, the weakest economic recovery in modern American history.
It is understandable that an 18-year-old student who has never had a real job may be swayed by Obama’s rhetoric, promising dollar bills raining down from the sky to cover his tuition. Less understandable, or at least more disappointing, is that on Mitt Romney, who on Monday said, “I fully support the effort to extend the low interest rate on student loans.”
If Romney wasn’t going to stand up for the Constitution or against the tuition inflation caused by federal education loan policy, the least he could have done was, as Senate Minority Leader Mitch McConnell did, point out that this is a transparent ploy to “make [Republicans] look bad to the voters” while distracting from the dismal Obama economy and its 53 percent unemployment rate for recent college grads.
Romney could have said that he’d be willing to consider it if there were offsetting spending cuts elsewhere, as John Boehner did. He could have said that economic growth, which this president is stifling, will make the college loan interest rate irrelevant, and that a bigger subsidy from taxpayers will not help them get a job — and might actually hurt employment efforts through higher tax bills for the few Americans who actually pay most of the freight.
College education for many — though perhaps not as many as receive it now — is a laudable goal for America. But subsidizing it through unconstitutional actions and unjustifiably low interest rates is nothing more than a vote-buying redistribution of wealth from the majority of taxpayers to college students and their parents. It is a difficult political issue for the GOP, which is exactly how the Democrats engineered it. But it is time for the party, and its putative leader Mitt Romney, to speak the truth that even for a good cause there’s no such thing as a free lunch (or free college education).
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online