Commentary Magazine


Topic: student loans

Obama Turns Graduates Into Suckers

President Obama’s approval ratings haven’t been north of the 50-percent mark since March of this year, according to the Real Clear Politics’ average. A solid base of support for the president since the early days of his campaign in 2008 has been voters 30 years of age and under: the youth vote. Obama T-shirts, posters, and stickers have been ubiquitous on college campuses since his first election. It’s not surprising that the president has chosen to promote policy changes close to the hearts of college students and young voters in an attempt to win back hearts and minds recently jaded by the president’s failure to adhere to sufficiently liberal policy positions on the NSA and privacy. 

As Richard Vedder explained in Bloomberg today, some of the president’s proposals are good in principal, and some are very bad. Vedder outlines the negative aspects of the president’s plans:

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President Obama’s approval ratings haven’t been north of the 50-percent mark since March of this year, according to the Real Clear Politics’ average. A solid base of support for the president since the early days of his campaign in 2008 has been voters 30 years of age and under: the youth vote. Obama T-shirts, posters, and stickers have been ubiquitous on college campuses since his first election. It’s not surprising that the president has chosen to promote policy changes close to the hearts of college students and young voters in an attempt to win back hearts and minds recently jaded by the president’s failure to adhere to sufficiently liberal policy positions on the NSA and privacy. 

As Richard Vedder explained in Bloomberg today, some of the president’s proposals are good in principal, and some are very bad. Vedder outlines the negative aspects of the president’s plans:

The president’s proposal has one very bad idea: a forgiveness boon for those paying off loans right now. The proposal, limiting loan payments to 10 percent of income, potentially relieves millions of students from repaying part of their obligation. So why not major in fields the economy values least — anthropology or drama instead of engineering or math — if you don’t have to worry about earning enough to pay off your student loans over a certain period?

The idea simply raises incentives for future students to borrow more money, if they know their obligation to pay it back is capped. That, in turn, allows colleges to keep raising costs.

Obama proposes to ignore or worsen the root cause of much of the explosion in student costs: the federal financial assistance programs that encourage schools to raise costs and that haven’t achieved their goals of providing college access to low-income Americans.

President Obama chose an interesting audience to outline these proposals: SUNY Buffalo. The school, a member of the State University of New York system, is an affordable option for New York State residents who pay a fraction of what their (somewhat) nearby neighbors at Ithaca College pay. Without counting room and board, SUNY Buffalo students owe less than $8,500 a year, versus over $38,000 two and a half hours down the road at Ithaca College. For students on the hook for the majority or all of their college costs, SUNY Buffalo is clearly the logical choice. One would imagine that many of the students who chose to enroll at SUNY Buffalo made some tough, but wise, decisions while deciding on where to pursue a college education. The city of Buffalo may not be the most exciting place to spend four years, but at the end of their college career, students walk away with a valuable diploma for $120,000 less than if they had chosen to attend Ithaca. 

How would a SUNY Buffalo student, who perhaps turned down an offer of admission at a more expensive school due to financial considerations, feel about this forgiveness policy? Speaking as a graduate of a state school, it’s likely that most of the audience would have felt cheated out of a more preferable college experience due to their making a financially responsible choice. If President Obama’s plan goes into effect graduates of Ithaca College and SUNY Buffalo would be paying the same amount–ten percent of their income post-graduation–regardless of the cost of their education. Such a plan would incentivize reckless spending, furthering the rise of skyrocketing college costs. Even if the plan only extends to graduates currently, one would expect that students making enrollment decisions could anticipate loan forgiveness plans of their own one day. 

For an administration that has done nothing but limit the choices of students, most notably inner-city residents of Washington D.C. who benefit from the D.C. Opportunity Scholarship Program, which makes private schools affordable for students who would otherwise be trapped in failing schools, it’s a fascinating and illogical position. Until they graduate high school, the Obama administration would like students to be forced to attend a school based solely on their location, not based on their (or their parents’) needs or desires regarding their education. Upon graduation, these students could then choose from any college or university in the country, ignoring sticker prices.

This would, in turn, drive students who can meet admission standards to attend private schools with state-of-the-art dorms and gyms over more modestly priced and modestly equipped public schools. With this loan forgiveness program, President Obama, champion of public education, would eliminate the biggest incentive for students choosing public universities around the country, and with it, any sense of financial responsibility a teenager might have once possessed. 

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Low Student Loan Rates Not the Point

Republicans, candidates and the party alike, have a serious problem with young voters. The national party has conducted extensive research into how to solve the problem and it has already taken some promising steps in the right direction on several fronts, including digital strategy. The latest messaging meant for young donors coming from the RNC and Republicans in congressional leadership positions on student loan rates, however, is not only antithetical to the principles of conservatism, but will also prove ineffective in appealing to young voters.

Senate Republicans are justifiably frustrated at their Democratic colleagues’ inability to come to an agreement on student loan rates, which are poised to double on July 1 if a deal isn’t reached. Inexplicably, Senate Democrats have even rejected a proposal that President Obama set forth in his budget earlier this year.

Today the RNC gathered a small well-dressed group of young people that consisted of what their own official Twitter account described as interns, with handmade signs that appeared made with the same posterboard and markers, to protest the likely scenario of student loan rates doubling this summer. The protest may have been designed to appear organic, but the picture that emerged instead came across as quite staged. It seems Republicans believe that messaging on this Democratic failure will somehow endear them to young voters struggling under the weight of ballooning student debt.

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Republicans, candidates and the party alike, have a serious problem with young voters. The national party has conducted extensive research into how to solve the problem and it has already taken some promising steps in the right direction on several fronts, including digital strategy. The latest messaging meant for young donors coming from the RNC and Republicans in congressional leadership positions on student loan rates, however, is not only antithetical to the principles of conservatism, but will also prove ineffective in appealing to young voters.

Senate Republicans are justifiably frustrated at their Democratic colleagues’ inability to come to an agreement on student loan rates, which are poised to double on July 1 if a deal isn’t reached. Inexplicably, Senate Democrats have even rejected a proposal that President Obama set forth in his budget earlier this year.

Today the RNC gathered a small well-dressed group of young people that consisted of what their own official Twitter account described as interns, with handmade signs that appeared made with the same posterboard and markers, to protest the likely scenario of student loan rates doubling this summer. The protest may have been designed to appear organic, but the picture that emerged instead came across as quite staged. It seems Republicans believe that messaging on this Democratic failure will somehow endear them to young voters struggling under the weight of ballooning student debt.

Unfortunately for both the RNC and students, stopping a raise in rates wouldn’t solve the problem for the majority of students struggling not with the interest payments on their loans, but the principal. The ease with which students have taken out more loans than they can conceivably pay back after graduation is at the heart of the crisis. Making more money available at less cost would actually make the crisis worse for students and for an already bankrupt federal government, which has no business in the student loan business in the first place. Today the Wall Street Journal explained

The skyrocketing cost of a college education is a classic unintended consequence of government intervention. Colleges have responded to the availability of easy federal money by doing what subsidized industries generally do: Raising prices to capture the subsidy. Sold as a tool to help students cope with rising college costs, student loans have instead been a major contributor to the problem

In truth, America’s student loan problem won’t be solved by low interest rates—for many students, the debt would be crippling even if the interest rate were zero.

If we want to solve the very real problem of excessive student-loan debt, college costs need to be brought under control. A 2010 study by the Goldwater Institute identified “administrative bloat” as a leading reason for higher costs. The study found that many American universities now have more salaried administrators than teaching faculty.

The RNC’s populist message, which would do nothing to solve the student loan crisis, is unlikely to even register with most young voters. Few are even aware of the rates on their student loans, both when they take them out and when they graduate. The information isn’t even that easy to obtain: I spent over half an hour myself today figuring out the rates on each of my four federal loans to see how they compared to the rates currently being discussed.

The Republican Party has the right idea in trying to craft a message that appeals to young voters. What would not only resonate more, but also actually help them would be a plan to bring down costs, much like what Texas Governor Rick Perry has proposed with a $10,000 degree. Innovative solutions to bring down costs like Perry’s, not partisan demagoguery, is the future of the GOP’s outreach to younger voters. 

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Danger Sign on the Student Loan Bubble

Who could have possibly predicted that extending a practically unlimited line of credit to 18-year-old college students could have turned out so poorly? Yesterday, student debt levels reached a new milestone: “The proportion of U.S. student loan balances that are in delinquency — that is, unpaid for 90 days or more — surpassed that of credit-card balances in the third quarter for the first time, according to the Federal Reserve Bank of New York.” 

The student loan bubble, largely financed by federal tax dollars, is an entirely predictable and avoidable financial catastrophe. Students, in spite of their estimated future earning potential, are given the ability to borrow tens of thousands of dollars to attend any institution of higher education in the country, regardless of that institution’s ability to produce degrees of equal or higher value. According to CBS Moneywatch, “for all borrowers, the average debt in 2011 was $23,300, with 10 percent owing more than $54,000 and 3 percent more than $100,000.” That’s an incredible statistic when you consider that two-thirds of students currently pursuing a bachelors degree are borrowing in order to do so — over 6 percent of students attending college right now will walk away with more than $54,000 in loans. The average amount of debt for a bachelors degree is $23,300; for students that went on to obtain medical, law or other specialized degrees, that average skyrockets.

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Who could have possibly predicted that extending a practically unlimited line of credit to 18-year-old college students could have turned out so poorly? Yesterday, student debt levels reached a new milestone: “The proportion of U.S. student loan balances that are in delinquency — that is, unpaid for 90 days or more — surpassed that of credit-card balances in the third quarter for the first time, according to the Federal Reserve Bank of New York.” 

The student loan bubble, largely financed by federal tax dollars, is an entirely predictable and avoidable financial catastrophe. Students, in spite of their estimated future earning potential, are given the ability to borrow tens of thousands of dollars to attend any institution of higher education in the country, regardless of that institution’s ability to produce degrees of equal or higher value. According to CBS Moneywatch, “for all borrowers, the average debt in 2011 was $23,300, with 10 percent owing more than $54,000 and 3 percent more than $100,000.” That’s an incredible statistic when you consider that two-thirds of students currently pursuing a bachelors degree are borrowing in order to do so — over 6 percent of students attending college right now will walk away with more than $54,000 in loans. The average amount of debt for a bachelors degree is $23,300; for students that went on to obtain medical, law or other specialized degrees, that average skyrockets.

The average graduating law school student at the California Western School of Law owes more than $153,000 and over 89 percent of students graduate with debt of some kind. Students graduating from Columbia University and Georgetown University graduate with an average of more than $132,000 in debt. The average amount of debt of all graduating medical students is more than $160,000 and students graduating from seven schools in the U.S. walk away with at least $200,000 in debt on average. 

There is no easy fix to the student debt crisis. American students already owe over $950 billion and the president’s solution only limits how much students are required to pay back according to their income levels without limiting how much they are able to borrow or how much schools are reimbursed. The president’s plan would make it possible, starting in 2014, for payments to be capped at 10 percent of a borrower’s “disposable” income for 20 years, at which point the debt will be forgiven (10 years for public-service employees). Under this plan, schools can continue raising tuition far beyond inflation rates with no consequences to their bottom lines and students can continue to borrow knowing they have the option of a governmental safety net down the line. This leaves taxpayers on the hook for the remainder, an amount that is increasing at a remarkable rate (student borrowing increased 20 percent from the third quarter of this fiscal year to the fourth).

These reforms will do nothing but grow the student loan bubble to an even more unmanageable size and force students to pay up to 10 percent of their income for up to 20 years of their lives, hampering their ability to obtain financial independence from their parents, buy homes and have children. Instead of changing how students pay back their loans, why not change the way they take them out? Given that there are estimated income projections for college majors, why not limit the amount of federal loans given to students based on their projected ability to pay them back in ten years’ time? If colleges and universities produce students unable to find employment sufficient enough to stop their graduates from going into default, why not give the government the ability to obtain a refund for the cost of degrees of those who go into default?

For the sake of the American economy and a generation of students graduating college in the last 10 years, the student loan bubble cannot be ignored for much longer. If Obama were serious about solving the problem and earning the votes of the 67 percent of young people who voted for him, these reforms would only be step one. Yesterday’s news of soaring and record-setting delinquency rates is just one sign of many that the student loan bubble isn’t going anywhere. 

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America’s Youth Aren’t Fine, Mr. President

During the last several months, the political classes have come to the realization that the level of student debt in the United States is reaching crisis level. Many have suggested that the burst of the student loan bubble will be more far-reaching and more damaging than the housing bubble that precipitated the Great Recession. This week, the Huffington Post linked to a new study from the Federal Reserve Bank of New York that showcased just how deep the student loan problem reaches:

  • Of the 241 million people in the United States who have a credit report with Equifax, approximately 15.4% — or 37 million — hold outstanding student loan debt.
  • The average outstanding student loan balance per borrower is $23,300. About one-quarter of borrowers owe more than $28,000; about 10% of borrowers owe more than $54,000. The proportion of borrowers who owe more than $100,000 is 3.1%, and 0.45% of borrowers, or 167,000 people, owe more than $200,000.
  • Borrowers between the ages of thirty and thirty-nine have the highest average outstanding student loan balances, at $28,500, followed by borrowers between the ages of forty and forty-nine, whose average outstanding balance is $26,000.
  • About 27% of the borrowers have past due balances, while the adjusted proportion of outstanding student loan balances that are delinquent equals 21%.

Many have put the blame on ballooning costs of public and private universities across the country. Christian Science Monitor reported this week that “between 1999 and 2009, tuition at public four-year colleges rose 73 percent on average, and tuition at private nonprofit colleges jumped 34 percent. In the same period, median family income fell by about 7 percent.”

For graduating high school seniors, the allure of a college degree isn’t what it once was. Obtaining a degree, after falling tens of thousands of dollars in debt, no longer guarantees job placement upon graduation. Is there an alternative?

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During the last several months, the political classes have come to the realization that the level of student debt in the United States is reaching crisis level. Many have suggested that the burst of the student loan bubble will be more far-reaching and more damaging than the housing bubble that precipitated the Great Recession. This week, the Huffington Post linked to a new study from the Federal Reserve Bank of New York that showcased just how deep the student loan problem reaches:

  • Of the 241 million people in the United States who have a credit report with Equifax, approximately 15.4% — or 37 million — hold outstanding student loan debt.
  • The average outstanding student loan balance per borrower is $23,300. About one-quarter of borrowers owe more than $28,000; about 10% of borrowers owe more than $54,000. The proportion of borrowers who owe more than $100,000 is 3.1%, and 0.45% of borrowers, or 167,000 people, owe more than $200,000.
  • Borrowers between the ages of thirty and thirty-nine have the highest average outstanding student loan balances, at $28,500, followed by borrowers between the ages of forty and forty-nine, whose average outstanding balance is $26,000.
  • About 27% of the borrowers have past due balances, while the adjusted proportion of outstanding student loan balances that are delinquent equals 21%.

Many have put the blame on ballooning costs of public and private universities across the country. Christian Science Monitor reported this week that “between 1999 and 2009, tuition at public four-year colleges rose 73 percent on average, and tuition at private nonprofit colleges jumped 34 percent. In the same period, median family income fell by about 7 percent.”

For graduating high school seniors, the allure of a college degree isn’t what it once was. Obtaining a degree, after falling tens of thousands of dollars in debt, no longer guarantees job placement upon graduation. Is there an alternative?

Yesterday, National Journal highlighted a recent study by the John J. Heldrich Center for Workforce Development at Rutgers University on the employment situation for high school graduates without any college background or plans. Some of their chilling findings:

Only three in 10 of these recent grads are employed full time, according to the study, which tracked the employment outcomes of 544 young people who graduated from high schools across the country between 2006 and 2011.

Only 16 percent of those who graduated during the recession (2009-2011) are employed full time, although nearly half are looking for work. A third are unemployed and 15 percent are working part time. One in six have left the labor market altogether.

Thirty-seven percent of students who graduated pre-recession (2006-2008) are employed full time, according to the report.

Nearly 90 percent of those surveyed said they were paid hourly. The average hourly wage was $7.50, only  a quarter more than the federal minimum wage. Three quarters of the jobs reported were temporary.

Today, less than 24 hours after National Journal’s piece on youth unemployment was published, President Obama said during a press conference that “the private sector is doing fine.” This statement may come as a shock to Americans when unemployment was assessed at 8.2% by the Bureau of Labor Statistics, the stock market is down 7% since April, and there is still no good news on the horizon for jobs either.

During the last election, Obama garnered 61 percent of the youth vote, compared to McCain’s 31 percent – the results were almost identical for the college educated and not. America’s young people, whom the Obama campaign is trying to whip into a frenzy in order to produce the support he saw in 2008, won’t buy the hype this time around. Every morning they wake up unemployed and in debt, every conversation they have with a classmate and peer affirms that they aren’t “fine.” The Obama White House can turn Republicans into student debt boogeymen, send emails from Sarah Jessica Parker inviting recipients over for dinner, and issue statements about gay marriage every day from now until November. The only issue that matters to America’s youth this election isn’t looking any better for the Obama campaign – it’s the economy stupid.

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GOP Student Loan Bill Would Tap ObamaCare Funds

Despite what you may have heard from President Obama, both Republicans and Democrats in Congress favor extending low interest rates on student loans that are set to expire in July. The problem is they’re conflicted over how to pay for it. While Democrats support a payroll tax hike on certain businesses, the House GOP is planning to introduce a bill that would pay for the extension with some of the advanced appropriations included in ObamaCare. Politico reports:

House Republicans will announce by the end of this week their own bill to keep student loan rates from doubling, several Republican leadership sources said.

The GOP will offset its cost with money from what they dub a “slush fund” in the Democrats’ 2010 health care law. Speaker John Boehner (R-Ohio) is holding a media availability in the Capitol Wednesday afternoon to announce the effort.

The specter of government-subsidized student loan rates doubling is the most recent attempt by the White House and Democrats on Capitol Hill to paint Republicans as the model of inaction. President Barack Obama is on a nationwide college tour, slamming congressional Republicans for allowing the Stafford loan rate to jump on July 1. In reality, Republican leadership on Capitol Hill didn’t address how they would deal with the July 1 deadline, which would have allowed government subsidized student loan rates jump from 3.4 percent to 6.8 percent.

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Despite what you may have heard from President Obama, both Republicans and Democrats in Congress favor extending low interest rates on student loans that are set to expire in July. The problem is they’re conflicted over how to pay for it. While Democrats support a payroll tax hike on certain businesses, the House GOP is planning to introduce a bill that would pay for the extension with some of the advanced appropriations included in ObamaCare. Politico reports:

House Republicans will announce by the end of this week their own bill to keep student loan rates from doubling, several Republican leadership sources said.

The GOP will offset its cost with money from what they dub a “slush fund” in the Democrats’ 2010 health care law. Speaker John Boehner (R-Ohio) is holding a media availability in the Capitol Wednesday afternoon to announce the effort.

The specter of government-subsidized student loan rates doubling is the most recent attempt by the White House and Democrats on Capitol Hill to paint Republicans as the model of inaction. President Barack Obama is on a nationwide college tour, slamming congressional Republicans for allowing the Stafford loan rate to jump on July 1. In reality, Republican leadership on Capitol Hill didn’t address how they would deal with the July 1 deadline, which would have allowed government subsidized student loan rates jump from 3.4 percent to 6.8 percent.

Democrats are reportedly claiming Republicans are only making a fuss about how to pay for the extension because they secretly want to raise interest rates on students. Right, because Republicans have never in the past had ideological objections to using tax hikes to pay for subsidy programs. The left is also pointing to quotes from random Republicans who oppose the student loan rate extension as evidence of party-wide opposition. But that ignores that the student loan bill wasn’t a particularly divisive issue in the past – it originally passed the Senate by a vote of 78 to 18 and was signed into law by President Bush in 2007.

The House will vote reportedly vote on the GOP bill on Friday. Then the Senate may pass the Senate Democrats’ student loan bill with some Republican support. Both sides will scramble to gain political leverage, and eventually there will be some sort of compromise, because neither party will want to be the one responsible for increased student loan rates. Of course, this process probably would have been much less partisan and volatile if President Obama hadn’t spent the last two days claiming Republicans are “obstructing” the extension because they support higher interest rates for college graduates.

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Jimmy Fallon Shills for Obama

I understand that late-night comics can’t be expected to have anything more than a basic comprehension of the political issues they discuss. Their job is to be funny, not to grasp the details of a legislative bill, or understand the political posturing in both parties. But Jimmy Fallon and his producers got so spun up by the White House last night that it was embarrassing to watch.

President Obama appeared in Fallon’s “slow jam the news” bit to express his support for the student loan extension bill and blast the GOP for supposedly opposing the extension. Using a late-night show with a college-aged audience to push such a distorted, partisan message may be a little unseemly, but Fallon got in on the act too, shilling for the bill and basically endorsing the president’s claim that Republicans simply want to raise interest rates on students:

President Obama: Now there’s some in Congress who disagree. They say keeping the interest rate low isn’t the way to help our students. They say we should be doing everything we can to pay down the national debt. Well, as long as it doesn’t include taxing billionaires. But their position is that students just have to make this rate increase work. Frankly, I don’t buy it.

Jimmy Fallon: The Barackness Monster ain’t buying it. We all know our legislative bodies in the House tossing and turning late into the night. But Republicans disagree and could even filibuster. But if they do, the president said they’re gonna feel it buster.

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I understand that late-night comics can’t be expected to have anything more than a basic comprehension of the political issues they discuss. Their job is to be funny, not to grasp the details of a legislative bill, or understand the political posturing in both parties. But Jimmy Fallon and his producers got so spun up by the White House last night that it was embarrassing to watch.

President Obama appeared in Fallon’s “slow jam the news” bit to express his support for the student loan extension bill and blast the GOP for supposedly opposing the extension. Using a late-night show with a college-aged audience to push such a distorted, partisan message may be a little unseemly, but Fallon got in on the act too, shilling for the bill and basically endorsing the president’s claim that Republicans simply want to raise interest rates on students:

President Obama: Now there’s some in Congress who disagree. They say keeping the interest rate low isn’t the way to help our students. They say we should be doing everything we can to pay down the national debt. Well, as long as it doesn’t include taxing billionaires. But their position is that students just have to make this rate increase work. Frankly, I don’t buy it.

Jimmy Fallon: The Barackness Monster ain’t buying it. We all know our legislative bodies in the House tossing and turning late into the night. But Republicans disagree and could even filibuster. But if they do, the president said they’re gonna feel it buster.

In fact, Republicans in Congress aren’t opposed to keeping student loan interest rates low, and Mitt Romney has come out in support of the extension. Republicans mainly disagree with the way Democrats want to pay for it, which is by raising taxes on small businesses that make more than $250,000 a year.

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Student Loan Talk Won’t Save Obama in NC

President Obama is campaigning in favor of extending a student loan interest bill in North Carolina today in an effort to woo young voters, a critical demographic for him in the state. But as Politico reports, his professed enthusiasm for this student loan bill is a relatively new development, since he missed two votes on the same bill while campaigning back in 2007:

In 2007, then-Illinois Sen. Barack Obama missed two votes on the student loan interest bill that he now wants Congress to extend.

Obama twice skipped the Senate vote on the College Cost Reduction and Access Act when the bill came to the Senate floor first in July and again in September of 2007, according to public records.

The bill, introduced by Rep. George Miller (D-Calif.) and signed into law by President George W. Bush, first cleared the Senate in July on a 78 to 18 vote, with Obama as one of only four senators to abstain. Obama did not cast a vote again in September, after the House and Senate had ironed out different versions of the bill. He was on the conference committee assigned to merge the House and Senate versions of the bill.

To be fair, Obama’s votes weren’t needed to pass the legislation at the time (in July of ’07, the bill passed the Senate by a 78 to 18 margin, according to Politico). The proposed extension currently has bipartisan support, and Mitt Romney has already come out in favor of it. So while Obama’s support for it is most likely genuine, this isn’t exactly a position that distinguishes him from the GOP.

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President Obama is campaigning in favor of extending a student loan interest bill in North Carolina today in an effort to woo young voters, a critical demographic for him in the state. But as Politico reports, his professed enthusiasm for this student loan bill is a relatively new development, since he missed two votes on the same bill while campaigning back in 2007:

In 2007, then-Illinois Sen. Barack Obama missed two votes on the student loan interest bill that he now wants Congress to extend.

Obama twice skipped the Senate vote on the College Cost Reduction and Access Act when the bill came to the Senate floor first in July and again in September of 2007, according to public records.

The bill, introduced by Rep. George Miller (D-Calif.) and signed into law by President George W. Bush, first cleared the Senate in July on a 78 to 18 vote, with Obama as one of only four senators to abstain. Obama did not cast a vote again in September, after the House and Senate had ironed out different versions of the bill. He was on the conference committee assigned to merge the House and Senate versions of the bill.

To be fair, Obama’s votes weren’t needed to pass the legislation at the time (in July of ’07, the bill passed the Senate by a 78 to 18 margin, according to Politico). The proposed extension currently has bipartisan support, and Mitt Romney has already come out in favor of it. So while Obama’s support for it is most likely genuine, this isn’t exactly a position that distinguishes him from the GOP.

It also isn’t a position that’s going to suddenly drive skeptical young voters to support him. Student loans are a major concern for young people, but their top policy priority is still job creation. In a Georgetown University poll released last week, 74 percent of 18 to 24-year-old cited jobs and unemployment as the most critical issue facing the country. The federal deficit and education were tied in a distant second place.

So while Obama’s focus on student loans won’t hurt, and might even help him with some young voters, the real issue he’s going to need to address to them is jobs. And fuzzy rhetoric is not going to be enough. His support is tanking with young voters because of his record on unemployment – half of recent college graduates are currently jobless or underemployed according to the latest study.

The lack of enthusiasm isn’t just noticeable in Obama’s sinking approval ratings. Many young Democratic voters have also fallen off the voting rolls, according to Politico:

But for once, demographics aren’t on Obama’s side. The number of young Democrats registered to vote in the state has shrunk by nearly three times Obama’s victory margin; 40,000 of them have fallen off state voter rolls in the state since 2008, a Tufts University study in December found.

Obama isn’t going to get these voters back simply by backing the extension of a student loan bill that already has bipartisan support. He’s going to need to figure out how to generate enthusiasm similar to 2008, and at this point in his presidency that seems like an impossible target.

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Youth Prefer Jobs to Hope and Change

The president is having a hard time rounding up the support of young people to generate enthusiasm and votes for his reelection campaign, no doubt because this time around, he’s forced to run on his record, verses vague promises of “hope” and “change.” In 2008, young voters constituted a full fifth of his support, but this time around less than half of Americans between the ages of 18 and 24 plan to vote in November and only 40 percent are even registered to do so currently. Young Americans certainly have more time on their hands this time around, with 1 in 2 new graduates unemployed or underemployed in jobs that don’t utilize their education background. Too bad for Obama that it doesn’t seem they will be using that time to campaign for another four years of his economy.

How has the president tried to get on the good side of young voters? This week Obama and Biden have made tours of colleges in swing states touting a plan to prevent a doubling of interest rates for students who take out federally funded Stafford loans (despite not even bothering to be present for the 2007 vote). The plan wouldn’t help Americans already paying off student loans, nor would it help those who took loans from private institutions. How many students will this plan actually help? Very few. Like many other lofty presidential plans, however, the most important part is merely the optics – actual results are just a bonus. I’ve written previously on the $1 trillion student loan bubble, and unfortunately, the program being touted by the White House will probably do more harm than good.

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The president is having a hard time rounding up the support of young people to generate enthusiasm and votes for his reelection campaign, no doubt because this time around, he’s forced to run on his record, verses vague promises of “hope” and “change.” In 2008, young voters constituted a full fifth of his support, but this time around less than half of Americans between the ages of 18 and 24 plan to vote in November and only 40 percent are even registered to do so currently. Young Americans certainly have more time on their hands this time around, with 1 in 2 new graduates unemployed or underemployed in jobs that don’t utilize their education background. Too bad for Obama that it doesn’t seem they will be using that time to campaign for another four years of his economy.

How has the president tried to get on the good side of young voters? This week Obama and Biden have made tours of colleges in swing states touting a plan to prevent a doubling of interest rates for students who take out federally funded Stafford loans (despite not even bothering to be present for the 2007 vote). The plan wouldn’t help Americans already paying off student loans, nor would it help those who took loans from private institutions. How many students will this plan actually help? Very few. Like many other lofty presidential plans, however, the most important part is merely the optics – actual results are just a bonus. I’ve written previously on the $1 trillion student loan bubble, and unfortunately, the program being touted by the White House will probably do more harm than good.

The president has, on numerous occasions, promoted the importance of making college more affordable so that more Americans can have access to higher education. In 2010, he held a “Summit on Community Colleges” where Vice President Biden’s personal connection was highlighted:

As a lifelong educator and community college instructor for the past 17 years, Dr. [Jill] Biden knows that community colleges are uniquely positioned to graduate more Americans with the skills that businesses and the economy will need to compete in the 21st century.

While President Obama continues to pour taxpayer money into government grants and loans, further escalating the student loan crisis, these 1 in 2 unemployed or underemployed Americans with college degrees have got to be wondering why they’ve bothered. Yahoo News reports,

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.

This graduating class of Americans has a sense of entitlement unlike any previous generation. They fill their teen years with extracurricular activities instead of after-school jobs, they expect to go to the college of their choice and demand government grants and loans to pay their way, and upon graduation are shocked to learn that their Creative Writing degree with a minor in Gender Studies doesn’t automatically qualify them for a well-paid job writing creatively about gender.

It’s time for the president to state some uncomfortable truths: America cannot, and should not, be spending its resources on giving money to universities that raise tuition at three times the rate of inflation, encouraging even more student debt. Why do we teach our children that college is not only a necessity, but also an entitlement? Why is a generation of liberal arts majors languishing in unemployment, leeching off their parents while blue-collar jobs go unfilled?

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The Peter Panization of a Generation

The Department of Education, one of the nation’s leading student loan lenders, is getting serious about collecting on $67 billion in defaulted loans. Yesterday, Bloomberg News reported the mob-like lengths the government agency is going to in order to cash in:

The debt collector on the other end of the phone gave Oswaldo Campos an ultimatum:

Pay $219 a month toward his more than $20,000 in defaulted student loans, or Pioneer Credit Recovery, a contractor with the U.S. Education Department, would confiscate his pay. Campos, disabled from liver disease, makes about $20,000 a year.

“We’re not playing here,” Campos recalled the collector telling him in December. “You’re dealing with the federal government. You have no other options.”

Campos agreed to have the money deducted each month from his bank account, even though federal student-loan rules would let him pay less and become eligible for a plan — approved by Congress and touted by President Barack Obama – requiring him to lay out about $50 a month. To satisfy Pioneer, Campos borrowed from friends, cut meat from his diet and stopped buying gas to drive his 82-year-old mother to doctor’s visits for her Parkinson’s Disease.

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The Department of Education, one of the nation’s leading student loan lenders, is getting serious about collecting on $67 billion in defaulted loans. Yesterday, Bloomberg News reported the mob-like lengths the government agency is going to in order to cash in:

The debt collector on the other end of the phone gave Oswaldo Campos an ultimatum:

Pay $219 a month toward his more than $20,000 in defaulted student loans, or Pioneer Credit Recovery, a contractor with the U.S. Education Department, would confiscate his pay. Campos, disabled from liver disease, makes about $20,000 a year.

“We’re not playing here,” Campos recalled the collector telling him in December. “You’re dealing with the federal government. You have no other options.”

Campos agreed to have the money deducted each month from his bank account, even though federal student-loan rules would let him pay less and become eligible for a plan — approved by Congress and touted by President Barack Obama – requiring him to lay out about $50 a month. To satisfy Pioneer, Campos borrowed from friends, cut meat from his diet and stopped buying gas to drive his 82-year-old mother to doctor’s visits for her Parkinson’s Disease.

The average student graduating with a bachelor’s degree comes away with over $25,000 in loans, which would require a monthly repayment of more than $200 for at least ten years. If the average is more than $25,000 — however — there is a large group of students who are walking away with significantly more, especially if they have then gone on to complete a post-graduate degree.

I’ve heard it argued that the student loan bubble burst will be bigger than the housing burst — the debt is held by a large proportion of one age bracket of the population, unlike a home cannot be sold (even at a loss), and unlike other debt is virtually impossible to be rid of, even after filing for bankruptcy. This year, the amount of debt held by America’s students will surpass the debt held by all of America’s credit card holders, while the rate of borrowing continues to increase for student loans at a faster rate than for any other kind of debt.

Instead of putting a stop to the extension of credit, the Obama administration has continued to allow the Department of Education to blindly loan tens of thousands of dollars to America’s students without so much as a notice informing borrowers how much their monthly payments will be upon graduation. After they are unable to pay it back, the Department of Education farms out the collection to private agencies who will stop at nothing to collect. Another solution, limiting the amount of debt offered to 18-year-olds, has seemingly never been considered as an option.

A new Pew Research Center survey found that almost 30 percent of people between 25 and 34 are living at home — and they are actually okay with the arrangement. The Pew study also showed the numbers of multigenerational households in the United States is at its highest level since the 1950s.

An entire generation of Americans is now reliant on their parents much later in life than any previous generation. Under ObamaCare, Americans can expect to be on their parents’ insurance plans until the age of 26, and they can also expect to be still living at home, putting off marriage until the average age of 27.

President Obama has fought to keep adults on their parents’ healthcare plans long after they should have moved out, gotten married, and started independent lives. He is trapping a generation (which he has narcissistically dubbed Gen44 after his presidency) in a cycle of personal debt, preventing them from being able to survive when the weight of the national debt comes crashing down. When the bell does start to toll on our historic debt burden, turning Washington, D.C., into Athens, don’t expect Gen44 to do anything but lead riots from their parents’ basements.

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