Trillion-Dollar Student Loan Industry to be Bailed Out by Taxpayers
The government’s problem-reaction-solution strategy to buy votes was summed up best by the late libertarian Harry Browne:
“The government is good at one thing. It knows how to break your legs, and then hand you a crutch and say, ‘See if it weren’t for the government, you wouldn’t be able to walk.’”
The government deliberately causes problems in order to elicit their desired reaction from the public and then offers their “solutions” that will inevitably earn politicians the undeserved trust of naïve voters.
Voters are usually bought with some kind of bailout. It could be a moral bailout as in the case of legalizing abortion, but most of them are financial bailouts. The Democrats own the black vote, much of the elderly vote, the Latino vote and much of the female vote all because of “bailouts” in one form or another that were sold on the premise of a solution to a problem that the government helped create in the first place.
The latest sector to benefit from a taxpayer-subsidized bailout is the taxpayer-subsidized student loan industry. Currently, student loan debt is larger than credit card debt. Collectively, students have racked up nearly $1 trillion in loan debt. And it’s all thanks to government taking over the student loan industry which prompting schools and universities to increase their tuition fees and diminish their own aid programs. Students were fed the promise that a college degree would yield them an additional $1 million in income over their lifetime compared to their high school graduate counterparts, so paying off their loans wouldn’t be all that hard, right? But recent studies show that the number has plummeted to $300,000 in additional income, and the average college graduate enters the workforce with $30,000 of debt. Nowadays, most college graduates don’t have much better jobs than those without college degrees, and the one thing they’re guaranteed to have is a giant loan that they will spend the rest of their life trying to pay off.
Is it really worth it anymore to get a college education when it’s become little more than a racket for the loan industry, the university system and the government that just wants to create another entitlement with which to buy votes?
This scam is the reason for all the internet advertisements and billboards for universities specifically targeting middle-aged people and particularly at-home mothers. “It’s never too late to go back to school,” the ad might read. They don’t care about making sure these people get college educations. They just want them to get a student loan that will pay the over-priced tuition and force them to become debt slaves so that later, when they’re about to commit suicide from all the unpayable debt, the government will swoop down and save them. Then, these students will become indebted to the Democrats if they weren’t already.
This bailout hasn’t happened yet, but it’s being proposed as part of the fiscal cliff negotiations, and I’d be surprised if it didn’t pass. The Student Loan Forgiveness Act provides debt forgiveness to all student loan recipients who have paid 10% of their discretionary incomes toward their loans for 10 years. If the recipients go into teaching, “public service” or medicine in underserved areas, their debts will be forgiven after only 5 years of such payments.
If this becomes the new norm, what incentive will there be for future students to pay off their loans at all? The next step will “free” college education for all.