Posted on 06/09/2014 9:42:53 PM PDT by Steelfish
Obama Woos Student Borrowers With Executive Order On Loan Repayments President calls education 'single best investment you can make' in signing order to extend PAYE initiative to 5m more youngsters
Heidi Moore 9 June 2014
In another attempt to stem the economic threat of high student debt and win favor for his party before November’s election, President Obama on Monday signed an executive order that will limit federal student loan payments for 5 million more people.
Calling an education “the single best investment you can make in your future,” Obama extended the four-year-old Pay As You Earn initiative, which has lowered monthly payments for student who borrowed federal student loans for the first time between 2008 and 2011.
The program lowered monthly payments to 10% of a borrower’s after-tax income. Borrowers who graduated before 2008 or after 2012 had access to another program, which limits student payments to 15% of income.
Monday's executive order will extend the initiative to anyone with a federal student loan.
It also adds another dimension: forgiveneness of student loans. If borrowers make regular payments on the PAYE program, the government will forgive any unpaid portion of their loans after 20 years. Forgiveness comes even sooner for students who decide to take government or nonprofit jobs, who will find themselves released from their loans after 10 years of regular payments.
There is also an element of political timing to the announcement. In September, Democrats face bitter battles for control of the Senate and the House.
Still, student loans remain a sweeping and intractable problem,which Obama acknowledged. The last major piece of legislation on them passed in 2010.
(Excerpt) Read more at theguardian.com ...
Why have Congress when the President can rule by executive order?
BINGO!
Why would the House cryer be going anywhere, he loves all things Obama. Dems also love an impotent “leader” of the Republican party that they have wrapped around their finger. He’s not going anywhere.
Congress is window dressing until it can be acceptable to simply abolish it in total with whatever the Marxofasicsts design in their utopia, which has to be built upon our ashes.
The American people have a fatal case of Normalcy Bias.
They have not a CLUE what has happened to them, or the fact that their Republic is officially GONE.
That is true but the young skulls full of mush aren't getting an EDUCATION these days. They're being programmed by the communists in the DemocRAT Party. They do not have open minds. They protest against people like Condoleezza Rice speaking at their colleges and universities. They want to hear "Snooki". She's more on their level of intelligence.
Was watching Hannity tonight and he had on Bret Baier. Baier was saying that this whole thing was nothing but a show, because the EO doesn’t even go into effect until the end of next year. And, that there’s no way Congress can go along with it because of how much it’ll cost, not that money matters to those a$$clowns.
Nobody can compete with free ***t.
Hey stoopid kids, vote for me and get free ***t.
Works every time.
Another welfare program for Victim Studies majors and their leftie faculty who won’t get a real education for a productive job.
Obama is a specialist in “no-brainers”
If for some reasons the 15 million illegal humanoids do not get to vote in November, and the Senate and the House goes Repugnican't...Odingus is hoping that they could use the CONgressional rejection of that bill as a 2016 election issue, perhaps.
Can I have some government cheese with that?
This will just provide more incentive to raise tuition.
There's income for these students in Obama's economy? Ten and fifteen percent of nothing is still zero.
And 10 or 15% of net income is still a good chunk of change. My daughter has major students loans that she is paying on. She has an MBA and is making about $45K now. Not great, but she likes her job. She knows she will be paying back her loans for the rest of her life.
Still, bailing out banks and car companies was okay. Why not real people?
“And 10 or 15% of net income is still a good chunk of change. My daughter has major students loans that she is paying on. She has an MBA and is making about $45K now.”
I don’t think this will resonante with the indebted as much as Obama hopes; these kids want these things outright forgiven, not hanging over their heads for the rest of their lives. Many will probably not reach $45K any time soon, and they know it.
But it makes him look like he “cares” and makes his followers “feel” good. That’s all that matters.
“But it makes him look like he “cares” and makes his followers “feel” good. That’s all that matters.”
Sure; short-term bump for long-term misery. Been that way since his election...
A couple of thoughts -
1) How can the government today promise to forgive a loan in 20 years? Congress appropriates money annually and the money to pay off a forgiven loan will have to come from Congressional appropriations. How can the executive today take action that will obligate a Congress 20 years from now to appropriate the money?
2) This action promotes inequality and dependence. Consider two children of equal household income and intelligence, from the same middle class neighborhood, applying to expensive private schools and public schools. Sally is accepted to Harvard and borrows $240,000 to fund her Ivy League education. She then enters the workforce for 10 years, during which time she pays 10% of her income toward her student loans, and then quits work to stay at home and stops paying on her loan. Her $1,000,000 per year investment banker husband makes more than enough to allow her to stay at home raising the kids and doing charity work. During her working years she pays in an average of $7000 per year for a total of $70,000. The taxpayers pick up the remaining $170,000.
Contrast with Johnny, who applied to the same schools with the same qualifications. Johnny is rejected by the Ivy League schools (the white male quota is filled with the sons of prior graduates) so he goes to the state university. He works part time during school, his parents and grandparents help, and he takes out much smaller loans graduating with $20,000 in debt. He goes to work for a local contractor supply house making $25,000 per year and pays required $2500 per year, increasing each year as his income increases, paying off his loans completely in less than 10 years with no contribution from the taxpayer.
As this illustration demonstrates, loan forgiveness is a simply a trickle down subsidy to elite private schools from the federal government. The elite schools have no incentive to control costs and improve efficiency if the federal government will provide loans to students to cover their eructations, no matter the cost. Students benefiting from government subsidies have no obligation to pay the full amount so they will choose schools they cannot afford because there are no adverse economic consequences for doing so.
This is another example of government disruption of the marketplace. Students who make wise economic decisions and responsibly pay off their loans are penalized while students who make poor economic choices are bailed out by the government.
The escalation in higher education costs would stop today if federal government involvement in education was ended. Instead of raising tuition and fees 7-10% every year, the ending of federal involvement in college financing would force all colleges to cut costs and compete for students. “Prestigious”, tenured professors would actually have to spend 8 hours per day in the classroom instead of giving a couple of lectures per week. Bureaucratic overhead would be slashed and worthless degree programs, such as gender studies, would be ended. The construction of palatial classrooms and luxury hotel style dormitories would end. Plus, a huge burden would be relieved from the taxpayer.
All we need is for the Republican House of Representatives to use its power of the purse to end funding for the Department of Education and student loan programs. Simple isn’t it?
They have not a CLUE what has happened to them, or the fact that their Republic is officially GONE.
If someone were to take a sky-writing plane all over the U.S. and write in the skies "Your Republic is Gone!", I would bet that darn few would react, mostly because they wouldn't understand the reference, i.e., what has happened. Those who did react would say something such as "What's a republic?"
The American people have been efficiently dumbed-down by their public education, entertainment and the media to think that liberty is having internet and cable and beer when they want it, and for some - to have it all on an EBT card.
They lost any understanding of what REAL liberty was, and they have had it drilled into their heads so often that America is a “Democracy” - meaning majority rule - that the concept of a Republic means nothing to them, nor do they even CARE for the idea of a Republic. They want mob rule. They want a king.
That Obama’s approval ratings today are 38% to 55% after the Bergdahl treason swap - proves the point that this country is finished.
We could have survived an Obama. We cannot survive the fools that made him our king.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.