The president is making news on college campuses this week, promising to spend your money to help reduce interest rates on student loans. As a father of four children who are all still carrying student loan debt, I could be expected to find the idea appealing. After all, many college grads – particularly in the Obama economy — are either having trouble finding jobs or settling for low-paying jobs that they could have gotten without the time and expense of obtaining a college degree. So who doesn’t want to help them out a little?
But then you look at the details of what Obama’s proposing, and you realize just how few people it’s designed to help, and you realize what a smoke-and-mirrors performance this is.
There are about 39 million Americans still paying student loans. How many will Obama’s proposal help?
Well, of those 39 million, only 23 million borrowed their money from the federal government.
And of those 23 million, only 9.5 million borrowed the money through the Stafford loan program, which is the program affected by this legislation.
And most of those 9.5 million are either already in school, or have graduated, and the interest rate adjustment in Obama’s plan only applies to new borrowers who are applying for loans THIS YEAR.
And those people don’t begin paying back their loans until after they graduate.
And the interest rate adjustment will make a difference of about $7 a month in a graduate’s payment.
That’s right: This plan will help a handful of kids by lowering their payments $7, starting four years from now. Pretty impressive, eh?
So now the President runs around to college campuses to tell adoring crowds how much he’s doing for them, when in fact the rate adjustment doesn’t even affect those currently in college.
Obama’s cheerleaders in the media have fallen breathlessly in line. As this story, written by the AP and published at CBS says, Obama “…planned a three-state tour this week to warn students of the potential financial catastrophe they will face if Congress fails to act.”
Got that? It’s a “financial catastrophe” if loan payments — that won’t start for at least four years — are $7 per month higher than they would be under current law. And heck, all it costs is $6 billion a year, added to the already record-breaking deficits of the Obama administration. That’s the real “financial catastrophe.”
(That “tour,” by the way, includes campuses in North Carolina, Colorado and Iowa. In what I’m sure is just an incredible coincidence, all three are considered “swing states” in this fall’s election.)
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