President Obama announced a plan today to forgive 100 percent of all federal student loans in the country.
In a speech in Scranton, PA the president told an assembled crowd that it was unfair to hold college graduates to promises they made as students and outlined his vision for ending all student loan payments by the end of the year.
"Just because someone borrowed a bunch of money doesn't mean they have to pay it back," he explained to a friendly crowd at Scranton University. "This isn't 19th century England. This is America. And in America we've always believed in second chances.
"In today's economy a university education is more important than ever. Where would successful people like Bill Gates, Steve Jobs, Tom Hanks, Brad Pitt or Mark Zuckerberg be without their college diplomas? These days skipping college just isn't an option, but neither is continuing to pay for increasingly expensive tuition.
"We need colleges to teach our young people useful skills like sociology, gender studies and postmodern Moldovan literary analysis. But the most important thing we need to teach them is responsibility. And what better way to teach responsibility than to hold these banks accountable for the terrible loans they've made."
This Onion -type satire isnt so funny because it is so close to the truth.Obama called for an expansion of his "Pay as You Earn" program, which caps student-loan payments at 10% of a borrower's discretionary income, and then forgives the balance in 10 years if the borrower pursues a Beltway-approved job in government or a nonprofit. Nasty partisanship at work: favoring work in the taxpayer funded Dem-friendly public sector, and dissing work in the self reliant dreaded private sector....yes, how we all benefit so from more and more "public sector' bureaucrats <snark>
WSJ: Mr. Obama is trodding a well-worn political path. Politicians subsidize the purchase of a good or service, prices inevitably rise in response to this pumped-up demand, and then the pols blame the provider of the good or service for responding to the incentives the politicians created. Think housing finance and medical care. Now President Obama is attacking colleges for rationally raising tuitions and padding their payrolls in response to a subsidy machine that began in 1965.
That's when the feds launched a program to make college "affordable" by offering a taxpayer guarantee on student loans. Federal grants and loans have been expanding ever since and it's no coincidence that tuition prices have been rising faster than inflation for decades. This week the White House noted that since the academic year ending in 1983 tuition and fees at four-year public colleges have risen by 257%, while typical family incomes have advanced 16%.
The better answer is to stop the increases in grants and subsidized loans that Mr. Obama has so greatly accelerated. Let educators, students and their parents decide which courses and campus amenities provide the most educational value. As fervently as many lefty professors abhor the idea of free people operating in a free market, they may decide it's better than federal politicians running their universities.