The President never saw a loan to a potential voter that he thought needed to be repaid. Everyone is all a twitter that interest rates on student loans are scheduled to go up. So sad, too bad. If you borrow money, you really should expect to have to pay it back.
First, let’s get some facts straight. The current 3.4% rate is not going up for any current loans. The 6.8% rate will only apply to new loans. Much of the President’s rhetoric and scare tactics have been simply wrong, implying that current loans will go up. Some might even call it a lie, because with the huge federal deficits we have there is certainly someone employed by the federal government who could give the President the correct information.
The President, who also never misses an opportunity to try to buy votes with public money, wants to extend the current 3.4% loan rate. Regrettably, Republicans seem unwilling to take on the President on this issue. So much for financial rectitude.
Keep a few things in mind. The federal government has essentially nationalized student loans, so no matter what happens the public loses. Either we lose by subsidizing the rate now or lose by subsidizing future defaults later. Heads the taxpayer loses; tails the taxpayer loses. How’s that for an example of the fairness the President is always blathering on about?
Eventually even the students will lose, too. How so? Well, if Congress extends the 3.4% rate reduction then money will end up being added to the deficit to make up the difference. Who will pay that? In the future it will be the same students whose rates are being subsidized who will hopefully be gainfully employed and will have to pay the cost of the deficit. Basically, this is why government subsidies never work, eventually everyone ends up losing.
I guess one thing college doesn’t teach a kid is that they have to meet their obligations when they sign their name to a loan document. Sounds to me like a good place to start educational reform.