Monday, June 9, 2014

The Impending $1 Trillion Dollar Student Loan Crisis


Barack Hussein Obama, in last Saturday morning's weekly address, played pawnbroker and urged Congress to allow students to re-finance their student loans.  He made no mention of student loan debt surpassing the trillion mark last year.  He made no mention of the ten percent annual tuition inflation rate.  He certainly didn't mention that over 50% of last June's graduates are back home with mom and dad, and not working in a job commensurate with their field of study.  And he didn't mention that economists are saying that trillion dollars in student loans are every bit as dangerous as the housing crash and may stunt the growth of the economy for several more years as graduates, so loaded with debt, won't be able to purchase cars or homes.

Nope, Barack just wants to throw more money at the student debt problem, just as he ignores the failure of a 1200 percent increase in K-12 education since 1960 failing to produce high school literates.  But then there's no political gain in doing that, is there?  So Obama is going to, once again, circumvent the Constitution, and Congress, and issue an Executive Order on Monday that will cost taxpayer's over $12 billon dollars in earned interest on taxpayer dollars.  Further, this new easing of student loan interest rates will encourage even more borrowing and even more debt.

Being a responsible citizen, as soon as I heard Obama's weekly address I googled "student loan debt" and came up with all kinds of interesting facts.  

How many of you know that half of all student loans are not spent on school related expenses?  Our current generation of college students are partying in the local pub, furnishing their apartments, attending rock concerts at $150 dollars a pop, purchasing automobiles, buying iPads and iPhones and funding their dating lifestyle?

And why not?  If someone was willing to loan me $12,000 dollars a year, and I only needed half of that to pay for books and tuition, I'd party hearty too...I had no concept of finances at 18 years old!  And if I had a politician who promised me $5, 615 in Pell Grants, with no obligation to pay those grants back, I would have owned a 66 Mustang and hit every Stones or Beatles or Grateful Dead concert that hit town!

During my googling I was somewhat surprised to learn that the greatest misuse of student loans and free Pell Grants is coming from Community Colleges where tuition costs can be as little as two bucks per semester hour!  And not only are these Community College students spending like drunken sailors but they aren't showing the least interest in pursuing academics at the college they are being paid to attend!  Apparently the drop out rate is so bad Community Colleges are trying to stagger student loan and Pell Grant payments just to get these miscreants to stay around awhile!

And I've written of this before, but how many of you know that Uncle Sugar has doled out tens of billions of dollars to allow high school graduates who can't perform at the 12 grade level to attend remedial courses at Community Colleges, just so they can learn what they were supposed to have learned in high school?  And yes, that program too is a far $147 billion dollars have been spent on this program and over half of all grantees, after taking the money,  never finish their high school remedial program.

None of this was mentioned in Obama's Saturday morning address....that would be much too close to addressing the "real"' problem on our nation's campuses....but it sure as hell gets Democrats elected!

Post Script:  Sacre Bleu!  The liberal YAHOO/ABC news feed just commented on The Anointed One's new Executive Order:  Yahoo Finance Editor-in-Chief Aaron Task has reservations about the order. “In 20 years the debt goes away if you haven’t repaid it all and guess who it goes back to? The taxpayer. And I just don’t think that that’s going to end very well for the taxpayer. It does give an incentive for someone to make less money because their debt payment is going to be less and they know over the course of time that debt’s going to go away,” he says.
Yahoo Finance’s Lauren Lyster points out that this might encourage students to take out more debt than they normally would. Task adds, “That might be the origin of the student debt crisis in the first place - the availability of credit.”
The easy credit, concludes Task, is what allows colleges to keep raising prices.  
I'll bet very few of you remembered, or knew that Barack has a built in forgiveness clause in his previous student loan program.  You didn't remember that little "vote-buying" codicil that he put in his last Executive Order that forgives all remaining student loan debt after 20 years!  But that's for our children to pay, and four Presidents later who has to deal with the problem.


Anonymous said...

When has the empty suit in the Oval Office ever addressed real issues? Just look at all of his failed policies: bail outs, "green" initiatives, shovel ready jobs, healthcare, and now the student loan debacle. And don't get me started on the invasion of illegals that has his blessing. The man is destroying our country and our government reps on both sides of the aisle just stand there with their arms splayed wide while shrugging their shoulders and muttering, "He has the right to use Executive Orders. What can we do about it?" *sigh*
BTW, loved your D-Day column! Keep up the great work.

A Modest Scribler said...

Anon, re Congress' "what can we do about it?"...and the answer is elect more Tea Party candidates willing to shake things up and even impeach this socialist bastard.

Thanks for your commments on the D-Day blog.

Jerry Carlin said...

Well, gee, I wanted to get in here before the anger started! Yes, I see student loans as government sanctioned irresponsibility but I also see this never ending money pit as an opportunity for colleges and universities to raise tuition, for landlords to raise the rent and even the utilities charging more. Whenever there is "easy money" (in quotes because we have to pay it back!) everyone along the food chain wants their cut.
At some point I think students realize that it is all a game and there is no penalty for dropping out.
About the Tea Party. I thought that after their absurdity in attempting to shut down the government they were going away?
If the Republicans want to win an election they have to nominate someone who has a chance at winning.

A Modest Scribler said...

Good morning , Jerry. Re the Tea Party and the government shutdown...yes, they were wrong, as I've said before on this forum. What they should have done is fight hard during the budget process, not after the money has already been obligated.

Re Tea Party politics, there are two approaches toward trying to improve government, one short term, one long term. Short term, do like Obama and pose as a moderate until you get elected then drop the hammer down...or long term, be willing to fall on your sword, stick to hard and fast principle, lose elections to liberals until they screw it up so bad that the voters finally vote you in.

I'm personally for both approaches!

Anonymous said...

Original Anon here.
Even though I am an independent voter, I agree wholeheartedly about electing Tea Party candidates. While I would love to see a true independent win, realistically I think our best hope is for the Tea Party to get into power. Honestly, before this Obama mess, I believed the MSM and RINO talking points about the Tea Party. Then I researched them and thought, maybe, just maybe they can help to save our country. With your permission, I would like to list the 15 Non-Negotiable Core Beliefs for any of your readers who are not familiar with the Tea Party.

15 Non-negotiable Core Beliefs

1. Illegal aliens are here illegally.
2. Pro-domestic employment is indispensable.
3. A strong military is essential.
4. Special interests must be eliminated.
5. Gun ownership is sacred.
6. Government must be downsized.
7. The national budget must be balanced.
8. Deficit spending must end.
9. Bailout and stimulus plans are illegal.
10. Reducing personal income taxes is a must.
11. Reducing business income taxes is mandatory.
12. Political offices must be available to average citizens.
13. Intrusive government must be stopped.
14. English as our core language is required.
15. Traditional family values are encouraged.

#12 is the most vital one. Our Founding Fathers envisioned a citizen legislature who would go to DC for a few weeks a year to tend to our nation's business and then go home to their full-time jobs. Career politicians, IMHO, have led us to where we are today.

A Modest Scribler said...

Magnificent post, anon. From your mouth to God's ear so that he might find the heart to bless us just this one more time.
Thank you.

Jerry Carlin said...

I hope the assassination of 2 police officers and a Walmart shopper in Vegas was not the same Revolution that you are after! The problem with "talking revolution" is there will always be some idiot with a gun who will take you seriously. If we could only get people to read the revolution could be bloodless and start within. ...careful what you wish for!

A Modest Scribler said...

jerry, if you don't like today's blog you're gonna absolutely despise tomorrow' deals with the Vegas tragedy and how that massacre is just one of many of the initial skirmishes in the coming 2nd Civil War.

I do not condone that violence but it makes no difference whether I do or don't, it is what it is.

As to "peaceful revolution", I only wish that were still possible.

A Modest Scribler said...

Jerry, if you haven't read even one of my "2nd Civil War" blogs, here's your homework assignment for that tomorrow's blog will have some context: