President Obama once again turned to his trusty pen on Monday, signing an executive order aimed at easing the repayment guidelines on student loans. The Pay As You Earn program will cap monthly student loan repayments at 10% of income and forgive any unpaid debt after 20 years. On radio this morning, Glenn reacted to the madness of the policy.
“That’s fantastic,” Glenn said. “You know who that works for? Not only students, but all of the schools because they can just keep charging all they want. And we’ll just keep printing the money to pay for those. And then nobody actually has to pay for it. The Federal Reserve notes just paid for it.”
The action makes those borrowers eligible for the administration’s Pay As You Earn program by expanding on a 2010 law that capped repayments for newer loans but excluded borrowers who took out loans before October 2007 or who stopped borrowing by October 2011.
For a 2009 college graduate earning $39,000 a year but carrying $26,500 in loan debt, the plan would reduce monthly repayments by $126 per month and $1,500 a year compared to the standard repayment plan, the White House said.
The plan is expected to be in place by December 2015, after the Education Department puts the change into effect through the regulatory process.
The overall mindset about borrowing and debt in this country has shifted so far in the last half century alone. As Glenn explained, he didn’t go to college because his family simply couldn’t afford it. That same attitude does not exist today.
“I didn’t go to college. Why? I couldn’t afford it… I couldn’t afford to go to the community college. We were taught we don’t take on debt,” Glenn said. “So don’t come to me and tell me,’ Boohoo, I can’t pay my debt.’ I know. Maybe you shouldn’t have taken out that debt.”
The Obama Administration knows full well that the cost of higher education is completely out-of-control, which is why the government is in the student loan business to begin with. But, at Stu pointed out, that unattainable cost and subsequent government subsidy plays right into the progressive endgame.
“Isn’t this a great example too of something we’ve talked about for a million years, which was that split back in the day about between the Weather Underground-types and the progressives,” Stu asked. “What Progressives, of course, want is: Everybody gets free college. They want everyone to never pay a bill at all, and it all goes through the government. So indoctrinate everybody on your dime. Right?”
“So instead of building it that way and having a huge debate where it’s really difficult to try to get these things pushed [through]… they take out all the moral hazard of ever having any cost to it,” he continued. “So now you have only victims you’re dealing with. You have people where you’re saying, ‘Well, these people are having a tough time. They lost their job. Of course, they can’t pay these loans back.’”
Front page image courtesy of the AP