Back to school time--grab your checkbook
Original post made by Tim Hunt, Castlewood, on Aug 27, 2013
Not surprisingly, the president and his spin doctors decided it was time again to campaign for lower higher education costs. Last week, President Obama visited a few campuses on a bus tour and talked about making college more affordable with a new rating plan.
A couple of important notes:
• College costs have soared at a rate that makes the increases in health care costs look affordable since the federal government established its grant and loan programs. Perhaps, there's a connection? The item listed on my daughter's financial aid package from a private university was a federally subsidized loan.
• The Congress with the approval of the Obama Administration took over the subsidized loan program from the private sector as part of Obamacare. Just what higher education has to do with health care is a fine question that was ignored in the takeover.
The president, as is his wont, has been a master of mixed messages. Of late, he seemed to encourage students to default on their loans and was taking steps to make that easier. His idea was to go to work for the government and get the vast majority of your loan forgiven or to limit repayment to 10 percent of discretionary income (how would a mortgage lender or a banker lending on a car view that standard?). The basic concept that when you signed your name, you committed to repayment seems to be fading rapidly in the White House.
And anything the president can do to distract attention from the Benghazi scandal that is approaching its one-year anniversary with precious little public disclosure or accountability for government employees involved as well as the discriminatory actions by the IRS to say nothing of the NSA's rampant and ever evolving invasions of privacy.
The president's latest notionrating colleges as a curb on tuition costshas some merit. It does involve competitionwhat it lacks is removing the federal subsidies so colleges have to present a value proposition to potential students. The trends during the economic turndown showed more students and parents were carefully evaluating the costs and making decisions with economics in mind instead of blind faith that a high-paying job would be available to pay back the loan.