Posted on 02/13/2018 6:38:48 AM PST by Liberty7732
There is indeed a student loan crisis. And the numbers show it is entirely the doing of President Obama, with an assist from his supporting cast in the Democrat-run Congress.
The crisis has its origins in 2010, when President Obama essentially nationalized the national student lending program by signing a law he had proposed and Congress passed that muscled banks out of the picture as lenders. Banks had been providing government-backed student loans, but Obama, in all of his community organizer wisdom, figured distant government bureaucrats could do it better than bankers and save taxpayers money. It’s laughable, sure, but he and Democrats apparently believed it.
“By cutting out the middleman, we’ll save the American taxpayers $68 billion in the coming years,” Obama said during the signing ceremony. “That’s real money.” By the way, that savings number comes from the Congressional Budget Office, which once again shows that a palm reader would probably be more accurate in projecting impacts.
The president assured Americans that anyone who wanted to go to college would be able to get a loan. Again, totally predictably, federal student loan debt skyrocketed, from $154.9 billion in 2009 to $1.1 trillion by the end of 2017, according to Investor’s Business Daily.
Eight years. One president. Another unforced crisis.
But that’s just for millions of students that jumped at something they could not afford and many would not finish. Taxpayers are really taking it in the hindquarters.
A recent U.S. Department of Education report puts it starkly. The report points out that the program had a $25 billion surplus in 2012. That fell to a $5 billion surplus by 2015, was $8.4 billion in the red in 2016 and plummeted to a $36 billion loss last year. Who knows where it will be by the end of this year.
Remember. This was pitched as a way to not only save money, but make money. Why let the banks make the interest when the government can? But government by nature is somewhere between Keystone cops at best and criminal corruptocrats at worst, with much falling somewhere in the middle. So naturally instead of making money, or doing anything positive at all, it cost American taxpayers $36 billion last year and presumably a lot more this year.
In addition to the Keystone Cops-corruptocrat part of the formula, Obama also played magical government money politics with it. Precisely when he directed Washington bureaucrats to run the loan programs, he solemnly intoned in his special way about the burden student loans are to young people and that “we” — meaning American taxpayers — need to help them shed this burden (which, you recall, he was helping heap on them.)
Obama and his pen instituted a series of programs that made it easier for students to get out of paying back their loans. Whatever compassion there may have been in this nonsensical scheme, there was surely more than a heavy dose of politics. Politicians giving away goodies (that are not theirs) to others is a time-tested way to get votes.
One of his programs — called “income-driven repayment” but nicknamed “Obama student loan forgiveness” — allows borrowers to not make payments when their income falls below a specific threshold, then caps payments as a percentage of total family income. Any debt left over at the end of 25 years is forgiven. Because that’s how real life works.
It doesn’t take a genius with an expensive degree in human nature to know the perverse incentives that program provided. Students with debt rushed into the program, minimized income at certain levels, kept income off the books and began running the clock out on the 25 years. Their debts were so massive, it made sense to them — even if it was immoral.
A survey of student borrowers by LendEDU found half do not plan to pay back all their debts because, as Obama and Democrats kept prattling on about, the feds would just forgive them.
Why were the debts so massive in the first place? Again, human nature. Knowing the government was going to make sure anyone could get a loan for college, universities around the nation began ramping up tuitions at a faster rate than their already rapid increase. After all, the windfall was coming, and there were no controls and no market mechanism anywhere because the government was doing everything.
This is all terrible policy from the start, even before Obama turned it into a financial horror flick.
Seriously, explain again why people who do not send their children to college should be working to subsidize and actually pay for those who do? Explain again how this is Democrats looking out for blue collar, hard-working Americans that they suppose are their constituency?
All this shows yet again just how extraordinarily bad a president Obama was — and how bad Democrat policies continue to be.
How are they “forgiven”?
What law? State or federal?
Citation or link, please.
I believe about 10% of what I read on line, and am averse to wild goose chases.
Sorry.
The executor of your estate, the person responsible for dealing with your will and estate after your death, will use your assets to pay off your debts. This could mean writing checks from a bank account or selling property to get the money. If there isn’t enough to cover your debts, creditors generally are out of luck.
https://www.nerdwallet.com/blog/insurance/debts-after-death-life-insurance/
In the event of a co-signer on the debt, the debt remains active because the person on the debt is still alive.
https://pocketsense.com/happens-federal-income-tax-debt-person-owes-dies-4098.html
they stop making payment, work for cash at the same time they collect unemployment or "permanent disability; or fake debilitating illnesses.
And there are no consequences, other than "inconvenience."
That’s not forgiven. If the borrower falls into some money, the government will get their money. Going on The Disability is financially far worse than paying a school loan.
If you work for 10 years in certain professions, your school loans can be “forgiven” but you’ve already paid a huge amount of the loan by then.
Then by all means, have at it. I have an Accounting degree. I don’t need to look it up. I know the law.
You cannot be held responsible for someone else’s debt. In the case of community property states, the debt dies with the entity (2 people). If the loan is co-signed, it lives through both people. If one dies, the other owes the debt. Both owe the full amount together because both signed the note. The debt belongs to both of them separately.
My brother owes the IRS bigly but they can’t come for me for the debt just because I have money. They could come for my sister if he gives her assets that he should have given to the IRS(attempt to hide).
I wasn’t trying to blame you for anything in any way. I just thought it was funny how fast his prediction came true. The Freeper’s handle is FrankR.
He was asking for someone to post it on Twitter because he was having trouble doing so and it has already been downloaded, cropped and spread around within about twelve hours, and you found it.
Something like that happened right after Obama took office. I saw that nasty picture of Mooch and I thought it looked like the Salt Monster from Star Trek. I downloaded the Salt Monster picture, flipped it horizontally to get the same perspective, then put the two side-by-side using Corel Draw.
That photo went flying through the Internet fast and about a month after I made it I was seeing it back on FR. Funny.
Thanks for calling my attention to Frank R’s work.
If I can find any freeper, who has done the art work on the GIF’s I use, I’m more than glad give them credit when I post their art work.
Doing a complex gif is very time consuming if it is done correctly.
“How is all that similar?
You partially answered that question with your next couple of sentences.
“But, they throw money at them, like they threw mortgages at them, and they rack up debt.”
That’s the similarity. The government gives them something that they have to pay back, and they can’t. So who covers the bill? You and I do.
And all it breeds is more government dependency and a need to keep liberals in there. Votes, votes, votes.....
rwood
Absolutely. I think it goes back to an article I read...
https://www.thomhartmann.com/forum/2012/04/545-people-responsible-americas-woes
obama and the Left in general, created this problem, so only they are the ones that can solve it.
Unfortunately, the problem goes deeper, IMHO, and you have to give to the Left, they are some Long Term Thinkers. They start this out in kindergarten & elementary school. Can’t speak for the rest of the country, but where I live, when school starts that parents are busy buying school supplies. Only, they can’t buy their son or daughter what they want. No Superman binder for their son. No WonderWoman spiral notebook for their daughter. The parents walk into Walmart, go to the kiosk, pick the shopping list for ??? Elementary School, 3rd Grade and buy what’s on the list. Everyone gets the same things and when their kids get to school, they give it all to the Central Authority figure in the room, the Teacher. When they need something they go to that Authority figure. All things are solved by the Authority figure. Spend 16+ years with that indoctrination, without normal parents teaching you otherwise and challenging that, those kids are screwed.
What the Obama administration did do was great for the federal government, not the students. Obama federalized the system to where the government now profits immensely from both interest on loans it makes directly to students, and defaults. To say that the federal government now sits atop the most predatory lending system in our nation’s history is not an understatement.
Obama was one of only two members on the Senate Health, Education, Labor and Pensions (HELP) committee not to have taken money from the Sallie Mae PAC. In this position he was privy to the HELP Committee and other reports detailing a broad swath of illegal and deceptive activities by the lenders, the universities, and even the Department of Education. This also included the ways of recovery of defaulted loans.
The various repayment programs that promise forgiveness are cruel jokes, administered in bad faith by a Department of Education that has zero desire or intentions of forgiving any loans. It is estimate that fewer than 15% of those signing up for these programs will actually make it through. The rest will be expelled owing far more than when they entered.
So if Republicans in Congress are serious about reining in the powers of the federal government, they would not only join in those efforts to correct this- but lead on this critically important task. Obama didn’t invent this problem. It’s been going on for 60 or 70 years. He just learned and implemented a way of enslaving the people involved to the feds to create more votes to keep them in office. Just another lib lie. One the republicans should call them on, in public. But don’t hold your breath with their history.
But that’s the real problem, isn’t it? One side wishes to take advantage of the citizens to keep in power, and the other side doesn’t have the cajones to stop it while they say they are trying to protect citizens from the predator side of the aisle. They’re not draining the swamp. They are treating it like a wetland.
rwood
You’re 100% right.
I had loans back in the day. For some reason I ended up with 2 loan payments after I graduated. Consolidated them with the Dept of Ed, then took advantage of an offer from a private company. All was good. Then the Dept of Ed came back at me with a lower interest rate, so I went back to them. Paying everything on time. At that time, they sent out paper bills, every month. On the bill was a box that, if checked, would allow you to pay down your principal. At the time I was sending anywhere from $600-800 a month(total), of which, around $150 was the actual payment. I would check the box, expecting the additional $450-650 to go toward my principal. The next month I would get a statement that would say that my account was paid up for the next few months. I’d call and ask why the extra didn’t go toward the principal. This happened a few more times, my account was paid up for over a year, by the time I went to a private company and paid them off.
Point being, you’re exactly right about them being predatory lenders. Just like the shady mortgage people back in the day, that would give you anything you wanted. The Feds will loan you anything you want. But, unlike the mortgage industry, the Feds have the full weight of the government to find you and get their money.
Sorry you got stuck with that mess. The only differences between the loaning industry and the federal government is the loaning industry works fast with capital recovery as they need to work on a higher volume, and the feds have got forever to get you and they take their time to allow the interest rates to hammer you into submission. Then they can reach so much interest into your loan that they can afford to take a payoff as their bill was already paid earlier as the loan rose in cost. And this way they don’t have to get into a public fight that can make them look the predators they are.
They did the same thing with the housing debacle. And you can do this with IRS back taxes as it is rent free money for them.
rwood
Funny you say that and once again, absolutely right. They provided me an amortization chart. If I had made the payments the way they wanted me to make them, I would have paid back almost double what I borrowed. Crooked, Crooked, Crooked....
“Funny you say that”
I wish it was a joke. In my mind the entire intent of this was to try to offset the losses of this and other programs with a profit on some and a loss on others. This was how they have now learned to settle for profit and take a loss of less than they put in with the volume of people they have on the hook. And that’s what makes every loan predatory. They aren’t in this to help anyone but themselves. And it’s been going on just since it became a business and not a public service. Plus it is subsidized with taxpayer money, they think of it as theirs, so there is no gamble to them. Now they are trying to “get” the deadbeats and seem the heroes.
rwood
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