Heritage: Obama student-loan plan leaves 29.5M out in the cold

Barack Obama’s warnings about the catastrophe that will be visited on millions of American college students if Congress doesn’t extend the temporary student interest rate reduction Democrats passed in 2007 is largely fictitious.

The Heritage Foundation  says Obama is trying to sell college students a “bag of magic beans” because the benefits of keeping current interest rates are “largely illusory”.

Extending the subsidized 3.9 percent interest rate on student loans past June 30 would only affect a fraction of the nation’s borrowers, according to former Congressional Budget Office Director Douglas Holtz-Eakin, writing in National Review’s “The Corner” .

The president’s plan would only affect 23 million loans being directly borrowed from the federal government. Student loans borrowed through private banks would remain unaffected — leaving 29.5 million Americans out in the cold.

And not even all of the federal loans would be covered if Congress were to agree to the president’s proposal because only approximately 9.5 million loans being borrowed through the subsidized Stafford loan program would be touched.

Additionally, Holtz-Eakin argues that the average student borrower would scarcely notice the difference in what they would pay each month because it would amount to an average of $7- roughly the cost of a hamburger, fries and a soft drink in some locations.

The talk about reducing the cost of student loans doesn’t even begin to address the runaway cost of paying for college. Tuition has skyrocketed alongside the growth of federal higher education spending.

For example, according to Heritage, spending on Pell grants has increased by 475 percent since 1982, yet college costs have skyrocketed by 439 percent since 1982.

Heritage expert Mike Brownfield charges that the short-term spending splurge on subsidizing interest for a fraction of the nation’s borrowers does little to make college more affordable in the long run.

Comments

4 Responses to “Heritage: Obama student-loan plan leaves 29.5M out in the cold”

  1. McIntyre says:

    I can not believe this president. Why can’t he just leave things alone, get out of subsidizing school loans, and try to find out how to lower the cost of going to school.

  2. Nathan Rogers says:

    It is a shame that those of us that actually pursue academics are going to be reduced to poverty. I am a disabled veteran, and a father of three children. I have a learning disability and had to take out my loans so I could afford to feed my family and pay for the extra expenses of school since I was struggling too much to hold down a job and stressed because my employer would barely work with me on my schedule and I had to make the choice to keep my grades up. My neighbor up the street is a convicted felon with 5 kids by 5 different baby’s mamas, a 6th grade education, and a drug addict with a Marijuana Rec. He lives in a house paid by HUD, eats groceries paid for by Food Stamps and WIC, gets money through TANF and Disability and welfare, and his kids get Breakfast and lunch free on top of all of that at their school, and they all have state medical care. His house and car are nicer than mine and he doesn’t work, doesn’t go to school, he just sits at home and plays Playstation and smokes weed all day. The sad thing is he and people like him will continue to live at a higher standard of life, stay out of debt, and live the easy life free of worries while those of us that are really trying to better ourselves and society end up struggling and sacrificing further just to dig ourselves out after getting buried in debt and interest in order to give Obama more play money to fund programs that reward the lazy on the backs of the ambitious and hardworking. Sometimes I simply ask myself what is the point in even trying when the professionally lazy, dishonest, and criminally inclined can have better access to the American dream than the law abiding and hard-working.

  3. jane says:

    It’s hard to understand why more people aren’t focused on finding ways to reduce the tuition of school. Bringing back consumer protections such as bankruptcy protection and others would help this. For me, I am unable to save money to buy a house, save money for retirement or save money for my child’s education because of my student loans. There is a whole generation of us that WON’T be sending our kids to college because of our experiences. What will the country look like in 30 years?…

  4. It is my opinion that many Americans will have to work in Federal and State jobs to pay back their student loans, resulting in many who will not be able to seek more fulfilling and creative jobs that would fully utilize their knowledge. This might be seen as some as a form of indentured servitude. The US Government should seek a solution to enable grads to fully utilize their expertise in innovation.

Leave a Reply

Tom Cotton objects to his SNL parody

Sen. Tom Cotton (R-Ark.) had a problem with SNL’s spoof of him—but only because the actor selected to portray him was too short.

Maher tells PC liberals 'shut the f up'

Bill Maher's politics are not always the greatest. But when it comes to knocking down the liberal PC brigade, he is on point like no other.

SNL parodies Starbucks' race campaign

What if another company--say, Pep Boys (or Girls! Or Whatever!)--took on their own campaign to talk about gender and sexual identity?

SNL's "The Rock" Obama goes beast-mode

Dwayne Johnson hosted SNL last night, so naturally he had to play a muscled-up Obama, who can finally do all the things he really wants—like throw John Boehner through a window and rip of Tom Cotton’s hand.

Devo does not want Scalise to 'Whip It'
A founding member of the 1980s band Devo really does not want to see House Majority Whip Steve Scalise “Whip It Good.” Scalise has been using the bands hit song “Whip It” at events and his staff recently created a joint fundraising committee with Rep. Patrick McHenry (R-N.C.) to raise money for a 1980s-themed birthday party […]

White House

Carly Fiorina says there’s a ‘higher than 90 percent chance’ she’s running for president

Carly Fiorina’s 2016 campaign is all but certain now—and she’s making no secret as to whom she’ll be targeting.

White House promises not to use legal loophole to keep NSA spying alive if Patriot Act expires
If the Patriot Act expires, it will stop the National Security Agency’s bulk spying too. The Obama administration promised this week that it will not take advantage of a legal loophole to keep the NSA spying alive unless Congress re-authorizes the Patriot Act, Reuters reported. Section 215 of the Patriot Act, which authorizes the NSA to collect data on […]
In honor of National Puppy Day, here are the top 10 cutest presidential puppies

Today is National Puppy Day! To celebrate, we give you the top ten cutest puppies to grace the White House Lawn.

Obama: ‘By hook or by crook’ I’ll push my agenda through
This is probably not the smartest phrasing to use. President Obama had an interview with Huffington Post over the weekend and while much of the interview was his oft-repeated lines about how Republicans are the reason nothing is getting done in Washington, he added a new phrase about his legacy that is bound to raise […]
Obama tells Prince Charles that Americans like the royal family better than their own politicians

President Obama has admitted what we all already knew: Americans far prefer the Duchess of Cambridge to Michelle.

Congress

Sen. Harry Reid will not seek re-election
WASHINGTON (AP) — Senate Democratic Leader Harry Reid, the wily Nevadan who dominated the Senate for a decade from the minority to the majority and back again, announced Friday he will retire after five terms. Reid, 75, who shepherded key Obama administration initiatives including the president’s health care law, lost his role as majority leader — […]
Schock: Lincoln faced challenges too
Embattled Rep. Aaron Schock (R- Ill.) gave his farewell speech on the House floor Thursday, promising that it was “not the end of a story, but rather the beginning of a new chapter.” While his own trials are more of the “Downton Abbey” decor and Katy Perry concert variety, Schock likened this tough time to that […]
Boehner, Pelosi read mean tweets
Taking a cue from Jimmy Kimmel’s famous “Mean Tweets” series, House Speaker John Boehner (R-Ohio), House Minority Leader Nancy Pelosi (D-Calif.), Sen Bernie Sanders (I-Vt.) and House Majority Leader Kevin McCarthy (R-Calif.) got in on the fun and read some mean tweets about themselves in a video for the 2015 Radio & Television Correspondents Association […]
GOP blocks Warren's student loan plan
THE HILL — Senate Republicans on Wednesday blocked an effort by Sen. Elizabeth Warren (D-Mass.) to attach an amendment aimed at lowering student loan rates to the budget. Senators voted 46-53 against Warren’s amendment to the Republican budget resolution. Warren’s amendment would have allowed people with college loan debt to refinance at interest rates from […]
Rand really liked those 'Stand with Rand' trolls

During Ted Cruz's big announcement at Liberty University yesterday--which students were required to attend--some Rand Paul supporters decided to troll Cruz with some "Stand with Rand" shirts: