Looks like the Socialist-In-Chief is seeking the student vote.
Obama wants to cap student loan repayment rates at 10 percent of a debtor’s income that goes above the poverty line, and then limit the life of a loan to 20 years.
One of Obama's legislative initiatives in 2009 was to have the federal government take over the student lending business in America. In essence he federalized all student loans in the US. You cannot get a student loan from a private bank anymore that doesn't have the governments tentacles involved.
Obama claimed this step to be a "cost-savings initiative". Furthermore, he argued that the old system where private banks loaned out money to students (with competitive rates, I might add) reduced the amount of available money for needy students. He also claimed that because private banks did the lending of this government secured debt, that it hindered the Federal government from making the system more efficient. Hah! When has the Federal government done anything more efficient? (But I digress)
Taxpayers now fund student loans.
And now that King Barry has taken over the student loan business, he is now proclaiming a change in the rules so that the taxpayers get more royally screwed. It is actually nothing more than a transfer of wealth and an initial stab at making college education "free". Interestingly enough, this change would affect very few Americans over the age of 32.
How will this work?
(excerpt from Fox News report)
The idea is to cap student loan repayment rates at 10 percent of a debtor’s income that goes above the poverty line, and then limiting the life of a loan to 20 years.What a deal!
Take this example: If Suzy Creamcheese gets into George Washington University and borrows from the government the requisite $212,000 to obtain an undergraduate degree, her repayment schedule will be based on what she earns. If Suzy opts to heed the president’s call for public service, and takes a job as a city social worker earning $25,000, her payments would be limited to $1,411 a year after the $10,890 of poverty-level income is subtracted from her total exposure.
Twenty years at that rate would have taxpayers recoup only $28,220 of their $212,000 loan to Suzy.
The president will also allow student debtors to refinance and consolidate loans on more favorable terms, further decreasing the payoff for taxpayers.
What a guy!
Of course now with even more federal (taxpayer) money available for student loans - and students not having to pay back the full amount - colleges will just get to hike their tuition - and you and I foot the bill! Our grandchildren and their grandchildren might even have to pay as well!
How cool is that?
To top it off, the Socialist in Chief will be luring more students into government work and making them even more dependent on his Socialist Utopian vision! The private sector be damned!
Best of all - Obama doesn't have to get Congressional approval!
Read more here about Obama's executive order.
College tuition and loan bubble - full speed ahead!
Hey Ben ... print up more of that fiat stuff will ya ...