August 28, 2013
MICHAEL GRAHAM: Obama Inflates The Higher Education Bubble.
What was the dumbest idea of the summer of 2013: Ignoring previous Syrian chemical attacks? The Massachusetts tech tax? Letting Miley Cyrus pick out her own clothes?
How about this one:
Telling college kids that if they spend six years running up a student loan tab getting an unmarketable diploma, they’ll only have to pay back a fraction of what they borrowed. In fact, the less valuable their degree and the more money they borrow — the more they win!
And the more we taxpayers have to pay.
I know what you’re thinking: An idea that bad can only come from Washington, D.C.
So let me quote from the White House fact sheet on President Obama’s plans to make college “more affordable:”
“The president has proposed allowing all student borrowers to cap their federal student loan payments at 10 percent of their monthly [discretionary] income … and forgives any remaining debt after 20 years of payments.”
So if Susy Science majors in a challenging STEM program (Science, Technology, Engineering or Math) and gets a good-paying job, she’d be on the hook for her entire student loan bill. Because she did the right thing.
But if Paulie Pompous parties his way to a degree in liberal arts before starting his job in “currency exchange and comestible retailing” (a.k.a. “Want fries with that?”), he’d end up paying back just a fraction of his loans.
Obviously, giving away more money to encourage more mediocre students to create more demand for space on campus isn’t going to drive costs down. Even someone as unfamiliar with basic economics as Obama (hello, “stimulus?”) should be able to grasp “supply and demand.”
Read the whole thing.