President Obama is unveiling a presidential memorandum that will allow students with loans taken out before 2007 to apply for a cut in loan payments by having them limited to ten percent of their annual income, a plan not unlike a ten percent religious tithe.
The President had already put the loan limit in place for current school loans, but with his Monday June 6 signing he grandfathered in all previous loans, as well.
The average student leaves college with a $25,000 loan burden and his ten-year loan costs him roughly $280 a month in payments. But some students leave school with far more debt and monthly payments can be crushing at hundreds of dollars more per month. Obama hopes to lighten this burden.
Naturally, paying less per month will lengthen the loan repayment time. To “solve” that problem, Obama also has decided that if a student still owes money after paying for 20 years, the remaining amount will be wiped off the books–at the cost to the taxpayer, of course.
It is apparent, though, that the President simply made this decision without bothering to find out what the cost of forgiving so many loans will be to taxpayers.
Secretary of Education, Arne Duncan, admitted that they didn’t bother to calculate that ahead of time.
With a Pelosi-like policy that we will have to implement it to find out what it will cost, Duncan told the media, “We actually don’t know the costs yet. We’ll figure that out on the back end.”
This plan also does nothing at all to address the main problem, the fact that an education costs too much.
Democrats in the Senate are trying to address that failing with a plan that features a price tag that the CBO estimates is $51 billion through 2024. Democrats hope to pay that cost with yet another tax hike on “the rich.”
It is unlikely the plan will meet with much support in the House of Representatives.
During his comments on his new student loan scheme, Obama also went off script with another partisan screed against Republicans who, he insists, just “don’t get it.”
The President wondered why you people out there aren’t “more outraged” by the mean GOP.
“I don’t know, by the way, why folks aren’t more outraged by this,” he said. “It would be scandalous if we allowed those kinds of tax loopholes for the very, very fortunate to survive while students are just getting started with their lives.”
“I want Americans to pay attention to see where their lawmakers’ priorities lie here. You’ve got a group of far-right Republicans in congress who push this trickle-down economic plan, telling hard working students and families you’re on your own,” Obama continued.
The President went on saying, “If you’re a big oil company, they’ll go to bat for you. If you’re a student, good luck.”
“Some of these Republicans in Congress seem to believe… that just because some of the young people behind me need some help, that they’re not trying hard enough. They don’t get it,” he insisted.
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at igcolonel@hotmail.com
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