Christmas came early this year as we opened our email from James Kvaal, Policy Director of Obama for America, such good news. President Obama is taking unilateral action by way of an Executive Order, not waiting for the “Do Nothing Congress" to help students pay their student loans. The email announcement tells us that the interest rate on your student loan will come down, and that “this switch adds no cost to taxpayers across the board.” You won’t have to pay more than 10 percent of your disposable income and if you work in a “public service career” all your debt will be forgiven after 10 years.
It really does sound good, but … Our skepticism, born of experience, always
questions the timing and motives of politicians, and this time is no different.
Who wouldn’t want “loan forgiveness”, especially students saddled with loans
that seem to range from large to breathtaking? But common sense tells us there
is no free lunch, eventually someone is going to pay, but who?
Who will pay? How will taxpayers not be saddled with this cost?
We wanted to learn what local students thought. We caught up with Matthew
Gould, a student from Towson University, and he said, “Unfortunately, under
President Obama's plan the debt burden will be taken from the individual, who
knowingly took out the loan to invest in their future and putting it on the
backs of those Americans who may never reap the rewards of the degree earned by the student and forcing them to pay the remaining balance through taxes. A
college degree is an investment, one that a student is expecting to see returns
on through increased salary. If the degree they chose does not pay off for them
why should they be bailed out … transferring the debt of individuals to the
nation is a dangerous path…”
It might not surprise you to learn that Matthew Gould is the Chairman of the
Maryland Federation of College Republicans. We now have one point of view, but
at Common Ground Maryland we want to hear from everyone.
What do you think?
Is Matthew Gould correct? Is the timing of this apparent “free lunch” to
students a cynical political ploy to create student excitement and “buy”
student votes just in time for the 2012 election?
In the end, will students who don’t go to college be working in the future to
pay the taxes to service the additional debt of students who do go to college?
Is this the “working class” who don’t attend college being burdened by a “gift to the elite” who do attend college?
Tell us what you think, and tell us where you are coming from in terms
of political world view, liberal, conservative, communist, libertarian, Tea Party, OWS, etc.
No matter how they slice it, the tap must be paid by someone and that someone is the working class. We have seen this in the Yorkway deal and now with the proposed -- as in stuffed down the communities throat -- the power of political office and their offspring which will come in to play with Fort Howard. As the saying goes: "It pays to have friends in high places."
The big problems as I see it is the ever increasing tuition costs. What is driving these costs over the moon?
http://www.baltimoresun.com/news/maryland/baltimore-county/bs-md-co-textbook-purchases-20111110,0,2996087.story?page=2
In regards to student loans sometimes the taxpayer takes a hit sometimes not.
http://soetalk.com/2011/08/15/4217/
Why are you even posting about knowledge and education when clearly you have neither?
If the federal government didn't insure student loans, banks would be less likely to lend to many students or at least not lend tens or hundreds of thousands of dollars to a student pursuing a B.A. in American Studies. The bank and the student would be forced to consider the students ability or potential ability to repay upon graduation. The federal government eliminated moral hazard (remember too big to fail/insured a bailout). Fewer loans would mean that some students might have to defer going to college until they had worked and saved for it. Other students might choose a trade or to enter the workforce without a degree. For many years this is how the system worked and college costs mirrored prices as a whole. It was only after the federal government stepped in and created a credit bubble by insuring that the loans would be repaid regardless of risks that money flooded into the education system and prices started to dramatically increase. After all, if the student couldn't afford to pay out of pocket he or she would simply be expected to borrow whatever it cost because no one was ever refused a loan.