When President Obama signed the new government-controlled Student-Loan bill into law in March of 2010 at Northern Virginia Community College in Alexandria, he knew precisely what he was doing. We gullible taxpayers just stood by and smiled. The academic community hailed the new law as being ‘a landmark piece of legislation.’ Banks, lending institutions and government at all levels understand risk of delinquency and default. Obama, as fiduciary for taxpayers knew beyond a shadow of a doubt that signing the student-loan bill was going to cost taxpayers billions of dollars in exchange for 40 million student votes. In addition to sending our own offspring to college, we have underwritten the opportunity to pay the defaults of those who dropped out of college as well as those who graduated and reneged on their debt.
The law included $2 billion for community college expansion and 820,000 additional Pell Grants. Obama criticized banks and Sallie Mae (a private lending source for student-loans) as ‘sweetheart deals.’ The student-loan program is simply further confirmation Mr. Obama wants everyone to know that big government is the answer to all our challenges in life. You don’t need to think for yourself, Uncle Sam is your source for money for everything and anything. We are teaching teen-agers to know that as they enter adult student-hood, they can attend college for free (Pell Grants) or borrow money at low interest that may never be repaid.
Student loan debt is approaching $1.4 trillion and growing. One estimate of delinquency of student-loan debt is 32% or $448 billion. That amount is three times the size of the budget for the Department of Agriculture and nearly as huge as The Department of Defense. This is shocking and absolutely blasphemous. One report from several years ago estimated that just 40% of Pell Grant recipients graduate within six years at four-year institutions. Apparently candidates for participation must have a pulse and breathing rate. Pell grants are not loans but outright gifts to low-income students. We must assume that if one’s income isn’t low enough, an applicant can quit their job to qualify for a free education.
Here’s the fallacy to Mr. Obama’s effort to provide a loan or grant for all high school graduates. There are many high school grads that aren’t ready for the college challenge. Many thousands were certainly pushed through because they often came to class, not because they retained information on subjects presented. One report says that 260,000 people with bachelor’s degrees are working for minimum wage while another 200,000 with associate degrees are doing the same. Millions of jobs don’t require college educations.
Mark Schneider who served as Commissioner of Education Statistics 2005-2008 and is now President of College Measures points out in a report that in Colorado a person with an Associate degree earns almost the same as someone with a Bachelor’s degree 10 years after graduation ($54,146 vs. $55,287). A report from Florida showed that workers completing apprenticeships in elevator mechanics or plumbing earn up to $70,000 after one year. Apprentices in industrial machine maintenance and millwrights reportedly earned $80,000 yearly.
If a high school graduate is driven to pursue a higher education there are many ways to escape the burden of student loans at expensive universities. For example, a person that serves in a branch of the US Military can receive education grants. A few men and women can qualify for attendance at one of the five Academies (Air Force, Army, Coast Guard, Merchant Marine, and Navy).
Every public and private college and university has a host of scholarships available based on sports and scholastic achievement as well as financial-need-based. Other approaches include transferring credits to a four-year institution after attendance at community college for two years. Taking a year off to earn tuition fees can be a useful hiatus and student status blended with part-time work can direct earnings to educational expenses.
The Student-Loan program has become an unnecessary burden on US taxpayers and should be transitioned back into the private sector. Too many taxpayer extractions have been wasted on vote accumulation and a superfluous amount of reckless spending by this Chief Executive. The National debt now equals $18.3 trillion.
Concerned?
– Dick Baynton
