Student Loan 'Forgiveness' Trick

Here is a quote from a website promoting a new idea being floated by Obama of ‘forgiving’ federal student college loans:


Over the past twenty years, student loan debt in the United States has more than doubled. We are now graduating students with a marvelous skill set as well as a mountain of debt. If we were to take our tax dollars and invest them in paying off student loan debt in this country, we would be investing in our future and in ourselves. Many individuals and families pay more than a third of their monthly income to student loan debt. If we free up this earned income by paying off debt, our educated masses in this country could create new businesses, invest in homes, and become a foundation for the new economy. This will have a much deeper positive impact on all Americans than handing bailouts to corporations who have no impetus to invest in this country.


Another site says:


The exciting part for many former, future, and current college students is that Obama is expected to announce a loan forgiveness program.  An Obama supporter described the program as “a way for college students to give back and get out of debt.  You’ll be able to volunteer and get credit for up to $10,000 worth of loans per year”.


Well isn’t that generous?! Forgive the loans! But ultimately they will not be forgiven to the taxpayer, who will pay them instead of the student himself/herself. It is really loan ‘shifting.’


At the same time the left-wing liberals who run our universities have been proven to have been raising tuitions at 3 times the rate of inflation over the last 30 years. While there have been 13 hearings into oil company price-gouging since the early 1970s and no evidence found, there has been one single congressional inquiry into exorbitant college costs, and widespread collusion and price-fixing was discovered.


Now look at the wording in the petition drive: “This (shift of college debt, through ‘forgiveness’, from the borrowing student to the taxpayer) will have a much deeper positive impact on all Americans than handing bailouts to corporations who have no impetus to invest in this country.”


Obviously writing from the socialist point of view, this writer ignores the facts on the ground – that the universities have been  artificially maintaining high prices and harming tuition-paying families, while our corporations, through private enterprise, have been providing products and services at competing (low) prices, and growing our economy through job creation.


And the charge of “shipping jobs overseas” is another leftist shibboleth. In fact jobs indeed have been shifted, but the writer fails to identify why –  it has been done overwhelmingly to escape the excessive taxes, regulations, unions demands and enviro regs of the same Democrats who control the universities.


The United States now has the second highest corporate tax rate in the world (after Japan) at 35% and Democrats are doing everything they can to prevent it from being lowered in order to make job-creation more affordable here in the US.


Here are excerpts from the 1998 report on the investigation into college price-fixing:


The phenomenon of rising college tuition evokes a public reaction that is sometimes compared to the “sticker shock” of buying a new car. Although this reference to automobile prices may irritate some within the higher education community, it serves to remind all of us that higher education is a product, a service and a life-long investment bought and paid for, like others.


Rising college tuitions are real. In the 20 years between 1976 and 1996, the average tuition at public universities increased from $642 to $3,151 and the average tuition at private universities increased from $2,881 to $15,581. Tuitions at public two-year colleges, the least expensive of all types of institutions, increased from an average of $245 to $1,245 during this period.


Public anxiety about college prices has risen along with increases in tuition. It is now on the order of anxiety about how to pay for health care or housing, or cover the expenses of taking care of an elderly relative. Financing a college education is a serious and troublesome matter to the American people.


Further the report noted:


Between 1987 and 1996, median family income rose 37 percent and disposable per-capita income rose 52 percent. During this same period, both measures of net price (at colleges and universities) rose considerably faster. Specifically, the price of attendance minus grants rose 114 percent at public four-year institutions, 81 percent at private four-year institutions, and 159 percent at public two-year institutions. Total price minus all financial aid (grants, loans, and work-study) demonstrates a similar pattern: this measure of net price increased 95 percent at four- year institutions, 64 percent at private four-year institutions, and 169 percent at public two-year institution.


You can read the entire 1998 study here


The idea that Obama now plans to excuse college debt is typical of the way that he makes people feel good while operating under the fiscal radar. Ultimately he will attempt to excuse all federal college debt because that is part of his radical agenda. Nowhere will he expose the overcharging colleges because they are his political allies. The taxpayer will pay every dollar of excused debt.


And those parents who played by the rules and paid for their kids’ college instead of relying on government loans now also will be asked to pay, through taxes, for the students who took out the to-be-forgiven federal loans. In other words, those parents are going to pay not only for their own kids’ education, but for someone else’s child’s education!


This is how socialists shift wealth around in exchange for votes, from the newly debt-free students to bleeding hearts who never take the time to understand that it really is just smoke and mirrors.


And the concept that you will be able to work off $10,000 in college debt by “volunteering” to work for the government is nothing more than introducing students to a life in government employment, at the further expense of the taxpayer. This is all nonsense. We should get to the heart of the matter: Do another study on college costs and demand 65% price remediation by the colleges, not the taxpayer and the parents of America.


Finally, the idea that loans will be ‘forgiven’ indoctrinates students into the socialist nonsense that things can be had for “free”. This idea leads societies to ruin, always has and always will. Because in the end, somebody always pays, in one way or another.


Please visit my website at www.nikitas3.com for more. You can print out for free my book, Right Is Right, which explains why only conservatism can maintain our freedom and prosperity.