Posted on 06/23/2015 7:07:02 AM PDT by SeekAndFind
That didn’t take long. Earlier this month, in reference to the Department of Education’s $3.5 billion bailout for Corinthian College students, I observed at NRO, “What’s especially worrisome here is the frontal attack the administration is mounting on notions of students’ responsibility.” The fear was that sensible attention to student debt would change into an excuse for borrowers to default and stick taxpayers with the tab.
That moment has already arrived. Just last week, the Consumer Financial Protection Bureau issued a report that found that co-signers have a rough time getting released from their promises to repay private student loans. While CFPB did flag some problematic practices (such as “auto-default” mechanisms, which kick in when a borrower dies), its larger message was the inhumanity of insisting that loans be repaid. CFPB director Richard Cordray, an Obama appointee, told the Chronicle of Higher Education, “Parents and grandparents put their financial futures on the line by co-signing private student loans to help family members achieve their dream of higher education.” It’s not entirely clear what Cordray thinks is so troubling, as paying up when the borrower doesn’t is exactly what co-signers are for. When parents and grandparents co-sign student loans, they are promising to repay those loans. Not to be uncharitable, but one is moved to ask whether the nation’s consumer-lending czar actually understands how lending works.
Late last week, Politico reported on federal PLUS loans in a story titled “The U.S. government’s predatory lending program.” In a news account that read more like an editorial, Michael Grunwald noted that the PLUS program is the most profitable of 100+ federal lending programs, returning to taxpayers $1.23 for every dollar loaned out. Grunwald wrote, “That sounds like a good thing, until you remember the government’s profit comes from its own citizens, often citizens of modest means. . . . [Since its creation in 1980] it has grown to look a lot like publicly funded predatory lending, providing almost any borrowers with almost unlimited cash to attend any school with almost no regard to their ability to repay. Thirteen percent of undergraduates now rely on Parent PLUS, and many of their parents are falling into debt traps.”
What kind of “predatory lending” does Grunwald have in mind? He quotes Elizabeth Hill, a 57-year-old property appraiser from the Boston suburbs with more than $30,000 in PLUS debt. She told him, “You feel so guilty that you haven’t done enough for your kid, and they make it so easy to get the loans. . . . Then they’ve got you by the cojones. It’s like ‘The Sopranos,’ except it’s the government.” A disinterested observer might think Hill a particularly ungracious borrower and see the PLUS program as a win-win exercise, with families getting their loans and taxpayers coming out ahead. When another Politico reporter asked Obama education adviser Roberto Rodriguez “if the Education Department was running a predatory lending program,” she reported that he waffled a bit but “didn’t say no.”
Education is an active pursuit, and one part of that is having skin in the game and honoring the debts incurred to pursue one’s studies.
The Left’s assault on student lending reflects an inclination to treat borrowers as passive victims. Now, it’s true that when it comes to higher education, colleges need to do much better by their students. But students also have a critical role. Education is an active pursuit; students need to do their half. And one part of that is having skin in the game and honoring the debts incurred to pursue one’s studies.
The Left has worked to drive private lenders out of college lending and pilloried lenders for wanting to ensure that loans are repaid. Obama has fought for “loan forgiveness” programs that allow aspiring bureaucrats and community organizers to renege on their federal student loans after a decade — if they pursue a government or non-profit job. And now liberals are making it clear that their newest tack is to demagogue lending that demands personal responsibility, as a path to “free college.”
When grievances are stoked to a breaking point, notions of reciprocal responsibility start to erode. If a contract is deemed fraudulent, it undercuts the borrower’s moral obligation to honor its terms. When Obama officials tell families they’ve been duped into taking on college loans, it’s giving them an excuse to them to not repay them.” This will undermine programs that require those benefiting from taxpayer largesse to responsibly repay their debts. As that basic compact erodes, it gets a whole lot harder to find serious ways to address college affordability. Of course, it wouldn’t be the first time that the Obama administration has chosen to play grievance politics rather than pursue responsible solutions.
— Frederick M. Hess is director of education-policy studies at the American Enterprise Institute.
So does the word “repayment” constitute a micro aggression?
Hillary’s ace-in-the-hole.
RE: So does the word “repayment” constitute a micro aggression?
Micro-aggression has not fixed definition. It is in the eye of the one who takes offense.
Then the answer is simple: terminate the unconstitutional program.
If no taxpayer funding is provided (from the theft of others property [aka $$$] by deadly force), one does need to worry about repayment.
Find your own funding or beg from those that WILL provide the $$; but, I’m sure theirs won’t be FREE either.
Well … I think it’s predatory that I have to pay my car loan. And my mortgage. I guess I’ll just stop paying them now.
What? There are consequences for that?
“College Loans: Liberals Now Think It’s ‘Predatory’ to Expect Borrowers to Repay Taxpayers”
Of course who benefits the most from college Loans... lemme see....
Could it be the very same Liberal Institutions that charges students and their parents an arm and a leg to pay some tenured communist professor blather on in his bi weekly lecture about how we should hate the rich all while he makes a very nice 6 figure salary for only working less than 20 hours a week????
I just call them thieves and embezzlers.
I can tell some stories of what staff people at universities get away with on the taxpayer’s dime that would get you fired virtually anywhere else.
20 hours a week would be an improvement in terms of actual hours worked.
[ I can tell some stories of what staff people at universities get away with on the taxpayer’s dime that would get you fired virtually anywhere else.
20 hours a week would be an improvement in terms of actual hours worked.
]
We need some James Okeefe style journalism on colleges....
The current system is way beyond repressive. You can get forgiveness for any debt, including IRS back taxes...except student loans. Example in a just published court ruling, a woman, permanently disabled (yes, she is actually disabled) filed for bankruptcy, court held that she could not negotiate or reduce the loan amount, even though she is now on disability, income below the poverty level.
These loans have become a noose around the borrower’s neck, not the aid to education.
[ The current system is way beyond repressive. You can get forgiveness for any debt, including IRS back taxes...except student loans. Example in a just published court ruling, a woman, permanently disabled (yes, she is actually disabled) filed for bankruptcy, court held that she could not negotiate or reduce the loan amount, even though she is now on disability, income below the poverty level.
These loans have become a noose around the borrower’s neck, not the aid to education. ]
The Main reason my student loan, despite having the lowest interest rate was paid off FIRST!
That's awful. Pay them off.
They’re smarter than I am. They get the free lunches and I always have to pay the bill.
Lucky them.
Meanwhile, in the real world, I’m looking for a second job just to pay for engineering school...
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