Today, in a speech before students and educators at the Auraria Events Center in Denver, President Obama announced changes to the Student Loan Program.
First, he announced a reduction in the maximum 15 percent payment amount, to just 10 percent, of a debtor’s income that is above the poverty line.
Obama then also announced the “shortening” the “life of the [student] loan”, from 25 years to just 20 years–such that, if the loan is not completely retired in 20 years, the remaining balance is “forgiven”–and becomes another Obama “write-off” for taxpayers.
President Obama was able to do this unilaterally, without Congressional approval, because early in his term he got legislation passed that literally “nationalized” the student loan business–eliminating commercial banks as the underwriting and service providers.
Supposedly, converting it to a government run operation was done to make more money available for needy students and the program operate more efficiently.
Instead, it caused the layoff of thousands of private sector, market-priced, taxpaying employees, who were working in those bank’s student loan departments across the country–exacerbating the already growing unemployment situation.
However, on the postive side for President Obama and Democrats, this action probably created twice the number of much higher paid government jobs–adding to the countries budget deficit.
Although they provide inferior service and have no accountability to taxpayers–they are a key source of Democrat campaign contributions–“laundered” from their union dues.
Even more importantly, it helped give Obama and Democrats excellent “political quality control” over their second largest voting block–[liberal] school teachers and the college students who are taught by them.
According to estimates in an Associated Press article today, there are 23 million borrowers with $490 billion in loans under the Federal Family Education Loan Program. Last year, the Education Department made $102.2 billion in direct loans to 11.5 million recipients.
Once again, with his “fake” Jobs bill not getting off the ground, President Obama is engaging in his favorite liberal pastime–“wealth redistribution” to valuable voting blocks at the taxpayers expense.
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