Posted 11/14/2011

TRILLION DOLLAR STUDENT LOAN RACKET

President Obama wants to "make college more affordable and reduce student debt."

He will do this with more spending, which will run up our already ominous national debt.

He should be more careful, since student load debt has reached one trillion dollars.  Graduating students average $25,000 in debt this year.  With jobs scarce and debt high, many college students are defaulting on their loans.  This adds to the burdens of the 53 percent of us who actually pay federal income taxes.

President Obama is clearly ignorant of the "Law of Unintended Consequences," which has afflicted the student loan program since its inception.  He is as ignorant of this sordid history as were Presidents Bush and Clinton when they foolishly ran up our debt by supporting loans to college students.

The purpose of these loans is to help college students afford college.  But student loans do not – and have never – helped students.

The student loan programs help colleges – not students.

With every new student loan program in history, the colleges simply absorbed the money by running up their tuition.

Over the past 30 years, student financial aid (grants and loans) has leaped over 400 percent.  In response to ever-increasing aid funds, colleges have increased tuition and fees at three times the rate of the nation's inflation.  The result?  A huge rise in student debt. 

According to one study, each one-dollar increase in student aid resulted in tuition increases of 93 cents at state schools and 55 cents at private colleges.

A 2007 study showed that "colleges tend to absorb most federal aid by increasing their tuition." 

Hey, President Obama!  This is 2011.  You've been in office long enough to have learned all this stuff.  Plus you have a huge Department of Education which should be up to date on the dark side of the student aid program.

To make matters worse, another study shows that colleges raised their spending on administration twice as fast as they did for teaching. 

If the kids only realized their debt helped hire a lot of administrators.

Instead of college kids occupying Wall Street, they would be better targeted if they occupied Washington – and their college administrative buildings.

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