President Obama’s student debt assistance programs are beginning to siphon off taxpayer dollars at an alarming rate, prompting even the gift-happy Obama administration to try to rein them in.
The notion that anyone who wants to go to an college should receive money to do it is central to Obama’s Creeping Socialism Doctrine, which seeks to guarantee everything from health insurance to jobs that provide a good salary.
But the White House in this case is figuring out that SOMEONE HAS TO PAY FOR IT ALL.
With Obama’s aggressive marketing of the student loan plans and the enticing changes he’s made to them, enrollment in the plans has surged 40 percent in just six months, according to the Wall Street Journal.
This is prompting all kinds of scams, including, naturally, moves by schools to raise tuitions since students can more easily have taxpayers help foot the bill for their education.
One of the plans forgives the loans altogether at a certain point, so get this: some TOP law schools are now offering deals where they’ll cover the cost of students’ loans until the government finally picks pays them off!
FULLY GOVERNMENT-SUBSIDIZED LAW SCHOOL! I hope they’re teaching the Soviet legal system.
This deal, which our motivated young learners are just flocking to, is called Pay as You Earn.
Don’t you love the name? Once in this country we stuck to a quaint notion you might call Earn Before You Pay. Or at least wait tables during the summer, for God’s sake.
Anyhoo, under Pay as You Earn, you only have to pay off your loan in the amount of ten percent a year of your “discretionary income,” which is defined by the amount you make above 150 percent of the poverty line.
Now this is the really fun part. If you haven’t paid off your loan in ten years, the debt is forgiven. BUT ONLY IF YOU WORK IN THE PUBLIC SECTOR OR FOR A NONPROFIT. If you work in the private sector, you have to wait 20 years.
Can you even believe this? A nation founded on the principle of limited government is actually trying to steer people into working for the government. So now if you graduate and then go sit on your ass somewhere in the bowels of the Agriculture Department, you can emerge by about the age of 30 debt-free and go get a real job.
Have a look at this fascinating case study.
Max Norris, a 29-year-old lawyer for the state of California, illustrates the potential costs of the program. He pays about $420 a month to the Education Department on his $172,000 in debt, which he says fails even to cover the interest owed. But his out-of-pocket expense falls to $100 monthly after aid from his school, University of California’s Hastings College of Law.
Mr. Norris, who makes $60,000 a year in his job, would have about $225,000 in debt forgiven after 10 years, assuming he stays in public service and his salary rises 4% annually, according to a repayment calculator created by the New America Foundation, which advocates less-generous forgiveness.
He said he learned of the programs before enrolling. “My intent the whole time in going through law school was to take advantage of this program,” he said.
Who can blame Max? He took his free stuff offer to the max.
“An independent study estimates the future cost of the 2011 program, known as Pay As You Earn, could hit $14 billion a year,” according to the Journal. Whoops.
So Obama is now trying to cap the amount of debt forgiveness at $57,500 per student. There currently is no cap at all.
Maybe Obama is running out of free stuff to give away.
The change won’t pass this year, the WSJ says. Anyway, you and I know it’s going to take some ogreish, woman-hating, racist, Republican president to clean this up. Do you really think Obama is going to anger all those adoring children who flock to his college campus speeches?