Obama Proposal Subsidizes The Rich....Again.

[franklin]

When will the do gooders realize their programs meant to help the poor actually raise costs on those who are least able to afford them? Congress is creating another bubble, and, just like their housing initiative made home ownership less affordable not more, this too is making college tuition less affordable.

https://edmoney.newamerica.net/sites/newamerica.net/files/policydocs/NAF_Income_Based_Repayment.pdf

Executive Summary
In his 2010 State of the Union address, President Obama urged Congress to change the federal student loan program’s existing Income-Based Repayment (IBR) plan, which caps borrowers’ payments at 15 percent of their incomes and forgives any remaining debt after 25 years of payments. He argued that high college tuition was an untenable burden for the middle class, and that by reducing payments to 10 percent of a borrower’s income and providing loan forgiveness after 20 years of payments, lawmakers could provide borrowers with relief.1 Congress enacted this proposal two months later, but limited it to students who take out their first loans on July 1, 2014, or later.2 Then, in 2011, the Obama administration announced that it would make this plan available sooner—to borrowers who took out their first loans in 2008 or later
and took out at least one loan in 2012 or later—and that eligible borrowers may be able to enroll by 2012 if regulations
are finalized by then.3

The 2011 stunt to buy votes.

Findings:
• Lower-income borrowers will see minimal new
benefits...
• Borrowers with middle incomes will receive some
increase in benefits under the pending changes to
IBR, but only if they borrow the maximum in federal
student loans ($31,000 for dependent undergraduates)....
• Middle- and high-income borrowers who attend
graduate and professional school will see significant
new benefits.

We also know student loan debt is not the problem it's made out to be. The vast majority of cases where students graduate with burdensome loan levels come from students from more wealthy families and who choose to finance Ivy League degrees instead of going to cheaper universities.

 

[franklin]

https://www.youtube.com/watch?v=8BJEZ0MC-hU


How about a fact check, Mr. President:


https://www.nytimes.com/2012/05/10/opinion/much-ado-about-students-loans.html?_r=0

he Stafford debate is more rhetoric than substance. If the rate on the subsidized Stafford loan program does double, as scheduled, to 6.8 percent this summer, very little will happen.

In fact, students who borrow through this program will ultimately end up paying only about $6 a month extra for one year of loans. And the rate increase won’t affect previous loans, only new loans borrowed for the 2012-13 school year.

Let’s look more closely at what’s on the table. The proposals that Congress has been debating would extend the 3.4 percent interest rate for only one year. If a student borrowed the average subsidized Stafford loan ($3,357) at 6.8 percent for the next school year, the higher interest rate would boost the borrower’s debt burden by $761 over a 10-year repayment period. Even if the interest rate doubles, the monthly payment on the subsidized Stafford loan would increase by only about one-sixth.

$6 a month? What a crisis! I think you should demonize republicans even harder for refusing to subsidize those who need it the least, and instead focusing on stabilizing the national debt and dragging down costs for the poor.

 

[Jazz Spazz]

We also know student loan debt is not the problem it's made out to be. The vast majority of cases where students graduate with burdensome loan levels come from students from more wealthy families and who choose to finance Ivy League degrees instead of going to cheaper universities.

You could be right, I don't know... but for me I was the first in my family to get a college degree and I paid for it wholly with student loans.
There are plenty of people out there that actually need the loans to get through a regular college or University.

 

[franklin]

You could be right, I don't know... but for me I was the first in my family to get a college degree and I paid for it wholly with student loans.
There are plenty of people out there that actually need the loans to get through a regular college or University.

TL/DNR was an appropriate response from you.

 

[TheSilencer1313]

Congress is creating another bubble, and, just like their housing initiative made home ownership less affordable not more, this too is making college tuition less affordable.

I find it interesting that you would look down on congress creating new bubbles, when that's exactly what the Federal Reserve has been doing since it's inception.
Making everything less affordable by expanding the money supply beyond comprehension.

We also know student loan debt is not the problem it's made out to be. The vast majority of cases where students graduate with burdensome loan levels come from students from more wealthy families and who choose to finance Ivy League degrees instead of going to cheaper universities.

I disagree.
I can't tell you how many stories I've heard where a student has insurmountable student loan debt, that they pay on their own over a 30 year period.
Not to mention the deprivation of good paying jobs in this country, which doesn't help those burdensome loans get paid back.

 

[One Brow]

When will the do gooders realize their programs meant to help the poor actually raise costs on those who are least able to afford them? Congress is creating another bubble, and, just like their housing initiative made home ownership less affordable not more, this too is making college tuition less affordable.

So, you don't believe in the power of the free market when it comes to reducing college tuition? After all, colleges absolutely compete to attract the best students, and offering 10% less tuition than than another similarly ranked school would be a great advertising tool, right?

 

[TheSilencer1313]

So, you don't believe in the power of the free market when it comes to reducing college tuition?

I believe in the power of the free market in this instance, and most instances.
Of course franklin always has his "I love regulation moments".

 

[franklin]

So, you don't believe in the power of the free market when it comes to reducing college tuition? After all, colleges absolutely compete to attract the best students, and offering 10% less tuition than than another similarly ranked school would be a great advertising tool, right?

I don't really care what role the market chooses to play in education. This is about a broke government choosing to spend $6 billion dollars this year to subsidize people who don't need it instead of using the money to help those who actually do need a hand up. Which would you prefer:

a) $6 billion to lower monthly payments by $6 on average and forgive the debt entirely after 20 years, with the majority of the benefit going to children from well off families and adults with advanced degrees.

b) Increasing grants to children from meager means and adults supporting children by $6 billion this year.

I can't tell you how many stories I've heard where a student has insurmountable student loan debt, that they pay on their own over a 30 year period.

Why does it not surprise me that a tool like you is surrounded by idiots with stories of failure?

You're welcome to your own opinion but not your own facts. Multiple studies are clear in that there is no real, widespread student debt problem. You know something is awry when outfits like Huffington Post and New York Times have been saying how overblown these claims are.

 

[Dr. Jones]

Not sure which thread this belongs, I just find it funny that Obama's pension invests in Sheldon Adelson. Nothing nefarious, or even unusual, just funny.

 

[One Brow]

I don't really care what role the market chooses to play in education. This is about a broke government choosing to spend $6 billion dollars this year to subsidize people who don't need it instead of using the money to help those who actually do need a hand up. Which would you prefer:

a) $6 billion to lower monthly payments by $6 on average and forgive the debt entirely after 20 years, with the majority of the benefit going to children from well off families and adults with advanced degrees.

b) Increasing grants to children from meager means and adults supporting children by $6 billion this year.

Firstly, I find the $6 figure highly suspect. Let's say you can take classes for $120/credit hour (even most communitycolleges are higher). At 15 credits hours, That's $1800 to borrow just for tuition. If you manage to rent all your books, keep your other expenses down, and live at home, you might need another $600. For a 3% difference in interest rate, that $2400 at 3% gives a difference of $6/month.

Hoever, if you want a four-year degree, even at state universities your tuition will be considerably higher ($11,636 for in-state at the Univeristy of Illinois this year). If the degree you pursue is not offered locally, you might need to borrow living costs. So, as I said, I find the $6 highly misleading. I don't know why a person of your expertise would think it could have been a reasonable number.

In response to a), I have no problems with making loan guarantees need-based, and with having some sort of scale based on the degrees sought/earned. But we need to be careful there, as well. Of coufrse, I think b) is also a good option, but we need to careful about abuse there, too.

 

[Siro]

I got through college mostly on student loans for tuition, and working for rent and personal expenses. I graduated with $30k in debt from one of the cheapest colleges in the country (BYU).

 

[Dr. Jones]

I got through college mostly on student loans for tuition, and working for rent and personal expenses. I graduated with $30k in debt from one of the cheapest colleges in the country (BYU).

Interesting. Where'd you get your smarts, then?

 

[Siro]

Interesting. Where'd you get your smarts, then?

I won the lottery and was able to hire a cadre of intellectuals to post for me on various forums. So the system works.

 

[Dr. Jones]

I won the lottery and was able to hire a cadre of intellectuals to post for me on various forums. So the system works.

Haha, rep'd.

 

[franklin]

Hoever, if you want a four-year degree, even at state universities your tuition will be considerably higher ($11,636 for in-state at the Univeristy of Illinois this year). If the degree you pursue is not offered locally, you might need to borrow living costs. So, as I said, I find the $6 highly misleading. I don't know why a person of your expertise would think it could have been a reasonable number.

The article states the $6 is calculated from "the average subsidized Stafford loan ($3,357) at 6.8 [vs. 3.4]". This comes from real numbers instead of hypotheticals.

In addition, the study demonstrates that Obama's 20 year forgiveness with minimum payments equal to 10% of discretionary income benefits those from well off families the most with little assistance to those from meager backgrounds (Bush introduced 25 yr/15%). It also provides a perverse incentive by encouraging college students to go into massive amounts of debt instead of taking a more prudent path. The higher the debt the more the government will take off their hands & the more hard working Americans will be required to pay in taxes.

We also know that those who exit college with higher debt loads tend to be those with the most earning power down the road. What sense does it make to subsidize the same people that the democratic party wants to raise taxes on, while turning a cold shoulder to those truly in need?

 

[One Brow]

The article states the $6 is calculated from "the average subsidized Stafford loan ($3,357) at 6.8 [vs. 3.4]". This comes from real numbers instead of hypotheticals.

Sorry, I didn't pay enough attention to this part of your point.

https://www.staffordloan.com/stafford-loan-info/subsidized-student-loan.php

Subsidized Staffored loans don't go to the rich. They are needs-based. They are also limited in size.

It also provides a perverse incentive by encouraging college students to go into massive amounts of debt instead of taking a more prudent path.

Massive debt paid off at $12/month?

What sense does it make to subsidize the same people that the democratic party wants to raise taxes on, while turning a cold shoulder to those truly in need?

Help them when they need it, then get your money back later. You see this as a bad thing?

 

[franklin]

Sorry, I didn't pay enough attention to this part of your point.

https://www.staffordloan.com/stafford-loan-info/subsidized-student-loan.php

Subsidized Staffored loans don't go to the rich. They are needs-based. They are also limited in size.

Are they needs-based?

Massive debt paid off at $12/month?

What?

Help them when they need it, then get your money back later. You see this as a bad thing?

The question is IF they need help. Please see the study linked to in the OP, specifically the quote from it regarding the Obama bill subsidizing the rich and doing little for the poor.

Is your failure to address this an implied support of subsidizing those who don't need the help at the expense of the federal budget and the poor who get left behind?

 

[JAG]

It has only been this year that i have been forced to take out a student loan in order to pay for school. My first two years (and especially the first) the university I am attending threw money in my direction to get me to go there. I have talked to other students and have found this to be a common practice, as they are assuming that by your junior year, it'll be too much of a hassle to transfer to another school. And although scholarships are awesome, I am glad that the option of a loan was there so I can continue my education.

 

[TheSilencer1313]

Why does it not surprise me that a tool like you is surrounded by idiots with stories of failure?

Yeah because we all know you're the man UN-capitolized franklin.
Why does it not surprise me that your sort of a **** sucker?

 

[TheSilencer1313]

Franklin knows nothing about the real world, other than the papers he reads.
I would love to know what you actually do for a living?
Probably a higher middle class homophobe, that just can't stand lower class people actually having a stance on anything.