Long-term con: Obamacare was ‘paid for’ by nationalizing student loans

By nationalizing the student lending industry, which previously had federal guarantees for private banks, Obamacare would raise $58 billion in revenue over a decade.

Some Democrats promised even more. “Part of the Health Care and Education Affordability Reconciliation Act of 2010 will make key changes to the student loan industry,” Sen. Tom Carper (D-DE) said. “This measure will save taxpayers nearly $70 billion over 10 years.”

So to all the other ways in which this student loan bailout is objectionable, here is another one. It is yet another abandonment of the lies used to sell Obamacare. Of all the bogus claims that it paid for itself, this is only the latest to fall apart.

What happened was that in the 1990s Sallie Mae (then the #1 education lender in the US) lobbied the Clinton Administration to change the rules on student loans to lift the partial shield from collection action due to bankruptcy. The result was the Higher Education Act of 1997, which changed student debt from having some (mild) protection to being the easiest type of debt to collect.

Collectors can assess huge penalties, with no bankruptcy protection and no refinancing allowed. Bank collectors can grab it from your wages, your home, your retirement, even your Social Security, for life. Did your parents co-sign? They are on the hook the same way too.

In 2010, Obama nationalized the federal student aid loan program and took it away from the banks. Now the loans are run directly by the federal government.

And then the Department of Education turned around and contracted out management of the federal student aid loan program to.. yep, Sallie Mae.

College loans are a bigger and more lucrative loan-shark racket than anything Tony Soprano could dream up.

The right way to fix the loan debt problem would be to get rid of the Higher Education Act of 1997, allowing normal bankruptcy rules to apply or at least add some options to extend the payback period for genuine hardship cases.

But instead Biden is just paying off the loans (making Sallie May even richer) while keeping the draconian no-bankruptcy-allowed rules, just so they can keep the screws on. That way, without Biden’s so-called benevolence, students are still basically screwed.

“Biden is just paying off the loans (making Sallie May even richer)”

__________

Biden’s not doing anything with actual money, is he?

Had thought he was merely using an accounting entry to write off the loans to the extent of 10,000 per borrower.

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