President Barack Obama has decided to leave a lasting impression before he exists office. Obama has put in place a student debt forgiveness program which only helps few while costing all excessively. Now as costs of tuition continue to soar, the Obama legacy on higher education reform will clearly be one of economic distress and government overreach.
Thanks to Obama, the federal government is on track to forgive at least $108 billion in student loan debt in the coming years according to the Government Accountability Office. Which, is what happens when the economy does not produce jobs for college graduates because it has been slowing down for 16 years, not growing above 4 percent since 2000. Graduates go for loan forgiveness, because the jobs that there are do not pay for the loans.
According to the Wall Street Journal’s Josh Mitchell, the most generous repayment plans are capped at 10 percent of the borrower’s discretionary income. He continues to note that, “Congress approved the plans in the 1990s and 2000s, and President Barack Obama has used executive actions to extend the most-generous terms to millions of borrowers.”
This has caused the number of students borrowing to skyrocket over the last three years, resulting in a collective debt of $355 billion. The Government Accountability Office (GAO) estimates $137 billion will not be repaid.
However, the financial burden which taxpayers will ensue will only get worse with the further implementation of this program.
The more the federal government has been willing to give, the more schools have been willing to charge.
For young Americans with college degrees but who can now not find jobs in the slow-growth economy, they cannot afford to pay off their loans. To them, a student in debt a relief plan sounds amazing. But for a country in debt, this agenda is not the greatest good for the American people. The real solution is not student loan forgiveness, but for the economy to get moving again with robust growth and creating jobs. The government can help that along by reducing the cost of doing business here. And stop telling every American they need a college education when not every job requires one.
Natalia Castro is a contributing editor at Americans for Limited Government.