Friday, October 28, 2011
President Obama recently unveiled a program to help out students pay back their student loans with lower interest rate and forgiveness after 20 years. During the 2008 campaign, then candidate Obama saw education for all, as the key to future prosperity and competitiveness. The president proposed paying off student's loans if they agreed to teach school in the inner cities. It was part of a one hand washes another, but some saw it as another welfare program. The attitude being "if I had to work three jobs, and it took me six years to graduate, then by god, that’s the way should be for everyone." I understand the financial responsibility and sacrifice part, but all things are not always equal. Today, we have 9.1 unemployment and last year's graduate is competing with the 2008 graduate. Last year the administration saw the riots in Europe over tuition increases, and they also saw all the potential student-loan defaults to be a trillion dollars and rising, so they thought it was prudent to try to get a handle on the situation before it got out a hand.
Some have suggested that those that do not have the funds to go to college should just wait until that time becomes available. I don't think too many of us could have used that same logic when we applied for our first mortgage. Yes, we had a good job, excellent credit, and the funds available to make the mortgage payments, but our job wasn't guaranteed. There's a risk in just about everything we do but we all strive for a manageable risk. I'm not saying that every student should get in debt that they won't be able to afford, but they are exceptions. I believe a brilliant student can make a wise choice by getting $45,000 in student loans for their medical school, especially since it will produce $165,000 a year for the graduating student. The thing I'm hearing is “if you can't afford to pay cash, then forget about earning higher wages and being more productive because it's not the cards." If President Obama and Supreme Court justice Sonia Sotomayor had not sought out student loans,they wouldn’t have the jobs they have today.
We already have 11 separate tax incentives for higher education in our tax code but only those in the upper-middle class and above can take advantage of them. I worked for a company that took pride in its educated work force by paying the tuition cost for all those that wanted to attend college on their own time. The company lost a few employees because one became a CPA and another completed his masters in nursing, but they were productive and happy employees while we're had them. I guess that's the difference between liberal and conservative thinking. The conservative just looks at the bottom line.
I guess people look at the words “20 year forgiveness" part and think it's just another giveaway to the minority and poor by the government, but the numbers don't bear that out. The 1.6 million who might benefit by this might be that former business person who was recently laid off.
Business loans are restructured everyday but conservatives want all failing businesses to go into bankruptcy rather than being propped with taxpayer funds. Bankruptcy it just another form of debt forgiveness where the debt holder settles for a very low percentage of the debt. In this current program, the taxpayer will not be on the hook for the student loans because it will be paid for with the savings from past practices of subsidizing those loans, but some don't like to see the working poor get any kind of break.
Edith Ann accomplished more than I ever could at the VA thread, by emphasizing the cost of college back then and what it costs today. Of course that brought in a right winger blaming the administration for the rising cost of education. I have yet to see an answer for the cost of the deregulation. There will be those that will side with the predator lenders after university turned their loans over to them for a substantial fee.I give credit to born2Bme for being her own person and thinking outside the box. I also give her credit for her analysis of why college cost are rising. She said "Get rid of all of the "help" that students get to go to college and not as many kids go to college. The colleges will have to do something to attract students, and that will have to be lower costs." That might bring down the costs of college but in the meantime those that can afford it will get the upper hand and the "rich get richer" cycle remains and our country will suffer for it as our competition passes us by. We will then need to extend more visas to special skills students in order to remain competitive in our global economy. The thread will continue with the normal pats on the backs for those who paid their student loans ages ago and the “holier than thou” preaching will grow because chest thumping beats looking at the new program with an open mind.You won’t see “ perhaps we can change the parameters to make this program more feasible or something of that nature.”
In the words of Herman Cain “if you're not rich and are unemployed; doesn’t blame Wall Street blame yourself…. Oh I could use that $12,000, I lost after the Wall Street crash of 2008, and I probably would send it to the protesters on Wall Street because they are the only ones dealing with reality. The 1% saw their income rise 275% from 1980-2010 while the middle class saw theirs rise by~ 18% during that same period.