One of the nice things about America, said President Obama students at the University of Colorado, is that no matter how humble your roots, you still have a shot at a good education. He also told the students that his goal is to "make college more affordable." Alas, the order of the President to affordable higher education seems likely to give the same results as its plan to reduce costs health care - that is, it is likely to push prices higher than inflation.
Nightmare of the next fiscal year may exceed the nation's bubble.
The Americans now have student loans as credit cards. As USA Today reported, the American student loan debt must exceed $ 1 trillion this year. The rising costs have left many of the graduates in a deep hole. Many of the graduates last year went a diploma and an average of $ 24.000 for a student loan. The default interest rate on student loans rose to 8.8 percent in 2009.
Wall Street activists occupy asked forgiveness for student loans.
Congress passed a law now, Obama has proposed to cap student loan payments some 15 percent of discretionary income and a candidate to forgive the balance after 25 years. Obama pledged Thursday to reduce the CAP to 10 percent of discretionary income - with forgiveness after 20 years.
Next, the 5 percent and 15?
"And we can do at no cost to taxpayers," U.S. Secretary of Education Arne Duncan cooed in a statement.
"It 'just not true," said Neal McCluskey is a libertarian leaning Cato Institute. Taxpayers are on the hook for those loans.
McCluskey last week published a paper which concluded that when the government offers more support, the institutions have much more to students. The phenomenon prior to this administration. The College Board reports that in the last decade, tuition and fees exceeded inflation by 5.6 percent annually. McCluskey believes that is where the financing is greater.
"There is no doubt," McCluskey wrote, "that colleges and universities have been increasing prices to a very fast pace in recent decades and that these increases are largely offset more help."
Rush Limbaugh rejoices, blaming the increase in the price higher, "researchers from the greedy." See salaries of California's public universities who pay for administrators. New President of Cal Poly San Luis Obispo is home to about $ 50,000 more than the published salary $ 328.212. When federal and state dollars in financial aid to students the power of the beast, eggheads in cash
The big losers are the students who are sucked into the high schools because the federal loans seem like free money, only to drop out of school. They get the debt but no degree. As McCluskey commented: "We give money, regardless of their ability to do college work."
Other losers are completed with a six-figure income and little debt. The White House has worked with the project "Know before you Owe" to warn students of the cost of student loans.
As a recipient of the state of university education and student loan back, I do not want to stop a program that has helped me and can help others. But as mortgages fueled the housing bubble, can not be too much of a good thing.
The unintended consequences of the sharp rise in support of public finance, McCluskey said, could be the "clouds as completion rates, and inflation rampant lessons."
In his opening speech at Stanford in 2005, Steve Jobs explained the economic factors that went into his decision to quit Reed College. "I naively chose a college that was almost as expensive as Stanford, and all my savings from working-class parents have been spent on my college tuition."
He really thought about money - it seems so outdated today. I am not suggesting that anyone abandon the law school. I just want candidates to return to their training and knowledge in their hearts it was worth it.