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Originally Posted by GBBob
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Sure you can. The problem with the programs that Obama proposes is that you only get the "good" news about them. This is simply morphing the student loan program from a govt backed program to a full fledged entitlemnt program. And regardless of what you may believe, entitlement programs
always wind up costing WAY more than they are sold as.
The bill was touted as saving $61 billion over 10 years yet that doesnt take into consideration the new $77 billion in spending that it calls for. Net loss.
Then there is this...
"CBO explained that "savings" estimates are artificially high because of government accounting rules that undercount the risks of default when the government is originating the loans, while the new spending estimates are artificially low. Many colleges oppose the government plan specifically because the feds don't make the same effort to prevent defaults that the private lenders do."
and this...
"Both the House-passed bill and the President's budget increase Pell Grants and also create automatic future increases, so individual grants will grow faster than inflation every year. Colleges will pocket the money by raising tuition, so we have yet another federal program ensuring that higher education costs continue to rise even faster than health-care spending.
Mr. Obama's budget also calls for making Pell Grants a mandatory entitlement. At least now they are subject to annual appropriation and their growth can be slowed when tax revenues fall or other priorities rate higher."
And of course there is this...
"Various changes that the President proposes to the Pell Grant program would add another $0.2 trillion to the deficit between 2011 and 2020," CBO said Friday. That could turn out to be a very optimistic estimate if unemployment remains high and more people seize the educational opportunity to which they have just become entitled. Still another taxpayer trap will be sprung with the President's proposal to forgive some debt incurred by "overburdened" borrowers.
And how exactly is this going to be a money saver?
In addition, borrowers in the income-based repayment program who make payments for 20 years will be eligible to have the balance of their loan forgiven. Currently, graduates in the program are eligible for loan forgiveness after 25 years.
Plus the public service exemption after 10 years
are employed by any nonprofit, tax-exempt 501(c)(3) organization;
are employed by the federal government, a state government, local government, or tribal government (this includes the military and public schools and colleges); or
serve in a full-time AmeriCorps or Peace Corps position
have their debt wiped away
So in effect we are "saving" money by taking federally backed loans away from the banks yet will wind up spending far more than saved since the Pell grant program has mandatory increases, we will be eating a whole lot more of the unpaid debt with the forgiveness program and the sure to be wasteful govt beaurcracy that adminsters this entire deal.
Was the old system a good one? Probably not. Is the new system going to be cheaper or more efficent? Not a chance.