Critics: Obama’s college aid plan increases tuition costs, hurts students

Vishal Ganesan Contributor
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Amid plummeting approval numbers and “Occupy” protesters’ growing outcry against onerous student debt, President Obama has announced a plan to circumvent Congress and modify the federal student loan program unilaterally.

The president wants to expedite provisions of a 2010 law that would lower the maximum required student loan payment from 15 percent of a graduate’s discretionary income to 10 percent, and forgive all remaining student loan debt after 20 years.

While the left cheered Obama for taking steps to ease debt levels — total outstanding U.S. student debt currently hovers around $1 trillion — critics on the right were quick to slam him for saddling taxpayers with the burden of paying others’ college debts.

“[I]t is unfair,” Lindsey Burke of the Heritage Foundation wrote on October 25, “to forgive student loans on the backs of waitresses and construction workers and the nearly three-quarters of Americans who didn’t graduate college.”

“Increases in federal subsidies or student loan bailouts shift the burden of paying for college from the student—the person directly benefiting from college—to the millions of Americans who did not graduate from college,” she added.

The president has also drawn criticism for his decision to bypass Congress, a move that his critics see as an unjustified expansion of executive authority.

During a recent education forum hosted by News Corp. and the College Board , the Washington Post reported, GOP presidential candidate Rep. Michele Bachmann called the decision an “abuse of power from the executive [branch].”

The announcement also shifted the spotlight to Rep. Ron Paul, a Republican presidential candidate who favors completely phasing out the federal loan subsidy program.

In an Oct. 27 USA Today column, Rep. Paul explained his opposition to the program, explaining how federally subsidized loans drive up the cost of education.

“In the name of ‘helping’ students through federal loans, the government has really hurt them in the long run by drastically driving up the overall cost of education and forcing poor and middle class Americans, who are just trying to better their lives, to take on unreasonable debt,” he wrote.

Rep. Paul’s concerns were echoed yesterday during a forum hosted by the libertarian Cato institute. Neal McCluskey, the associate director of Cato’s Center for Educational Freedom, argued that the president’s reform plan not only ignores spiraling higher-education costs, but will make the problem worse.

“The fundamental problem,” McCluskey said, “is that when we don’t talk about the cost, it always sounds so good when we say ‘let’s provide money so we can make sure everyone can go to college.'”

President Obama has been a particularly strong advocate of the position that America needs more college graduates.

When he announced his plan to modify the federal loan program, the president declared that “we should be doing everything we can to put a college education within reach for every American.”

McCluskey, however, believes this reasonable-sounding sentiment often translates into policy that harms the students the government aims to help.

When the federal government pumps more money into loan subsidies, he argued, colleges increase costs in order to capture those funds.

“It’s a vicious cycle,” McCluskey explained. “Students tell the politicians ‘we don’t want to pay this much for college,’ and politicians respond by throwing more money at them, and colleges respond by increasing costs.”

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