Peter Schiff: Obama Creates College Bailout

[bobbyw24]

Coming to the aid of the higher education industry that had begun to show some concerns that students may no longer be able to afford skyrocketing tuition rates, President Obama today announced a plan that will ensure students are able to commit to higher levels of federally backed student loans. By limiting student obligations to repay, and by passing more of the repayment burden onto taxpayers, colleges and universities will be able to continue to raise tuitions at a rate that outpaces nearly every other cost center in the American economy. The move will come as a great relief to the education establishment who otherwise may have needed to cut or cap tuitions.

The Obama plan limits repayment obligations to just 10% of "discretionary income" which it defines as total income above 150% of the federal poverty level (currently translating to about $16,000 for an individual, or $33,500 for a family of four). The plan also limits the term of obligation to 20 years. These terms represent a substantial easing and acceleration of the terms in Obama's "Pay as You Earn Plan," which was just announced last year (see April 2010 critique).

That plan, which was scheduled to begin in 2014, represented the first time the government had imposed any limits on repayment obligations. It had capped repayments at 15% of discretionary income for 25 years.

http://finance.townhall.com/columnists/peterschiff/2011/10/28/obama_creates_college_bailout/page/full/

[overcastpatriot]

Yep, exactly as I deciphered his latest plan. A bailout to big education and an attempt to buy a handful of reelection votes at the expense of the taxpayer. It's kind of a relief, once you finally "get it," you start to see the truth in everything...

[Sola_Fide]

By limiting student obligations to repay, and by passing more of the repayment burden onto taxpayers, colleges and universities will be able to continue to raise tuitions at a rate that outpaces nearly every other cost center in the American economy. The move will come as a great relief to the education establishment who otherwise may have needed to cut or cap tuitions.

This what the OWS socialists need to understand. These bailouts only prevent the correction and perpetuate the skyrocketing costs of education. The little guy gets screwed and the well-connected educational establishment gets hooked up. Bailouts never help...no matter how tempting they are.

[Sola_Fide]

Bump.

[AbVag]

This what the OWS socialists need to understand. These bailouts only prevent the correction and perpetuate the skyrocketing costs of education. The little guy gets screwed and the well-connected educational establishment gets hooked up. Bailouts never help...no matter how tempting they are.

But you can never convince the short-sighted.

[Sola_Fide]

But you can never convince the short-sighted.

Yeah.

[Kords21]

I wonder if there's going to be an "Occupy Spring Break" movement. I always find it interesting that these kids complain about their student loan costs but always seem to find the time to go to some tropical place for a week of binge drinking. I know not every college student does that, but it's always seemed kind of odd to me.