More Losses for Taxpayers, Student Loan Edition


As college graduates move on to wherever they’re going, it’s worth remembering this finding from February:

In obscure data tables buried deep in its 2016 budget proposal, the Obama administration revealed this week that its student loan program had a $21.8 billion shortfall last year, apparently the largest ever recorded for any government credit program. …

The 40 million Americans with student loans are now saddled with more than $1.2 trillion in outstanding debt. And with higher education costs rising much faster than inflation, the already massive program has been growing at a spectacular clip; direct government loans alone increased 44 percent over the last two years despite an aura of austerity in Washington. The Obama administration has tried to ease the burden for some borrowers by reducing their payments to 10 percent of their income and forgiving their loans after 20 years; this year, the Education Department plans to make all borrowers eligible for that “pay-as-you-earn” relief.

Even better, thanks to what the writer, Michael Grunwald, calls “a quirk in the budget process for credit programs,” that money just goes straight to national debt, without Congressional input.

Sadly, as all of these new sticks fall on taxpayers’ backs, few Americans — including or maybe especially the better educated among them — will understand where the massive burden came from.

  • D. S. Crockett

    Yet another wealth distribution scheme from taxpayers to the leftist who run most colleges and or universities. Payback for continuing to support leftist politicians a/k/a/ Democrats.

  • Warrington Faust

    I am not quick to recommend a solution, but aren’t student loans facilitators of increasing college coasts. Without them, many colleges couldn’t raise tuition to current levels. Shouldn’t students be wise enough not to leverage themselves into an education in a low buck field? I know I wanted to be an archaeologist until my father had a word with me.

    An aside,according to the WSJ, we can expect small colleges to begin disappearing. Having small endowments and fewer students who can afford them, they are being drained. About 40% of the tuition paid by full boot students is used to subsidize those students who cannot afford it (this is known as the “discount rate” and interesting theft). The Boston Globe mentioned that Wheaton College only seems to have 4-5 more years left in it.

    Wealthier colleges, Harvard?, could probably operate without tuition. Does anyone else remember when they fired a large number from their investment firm (Harvard Management) and why?

  • ShannonEntropy

    Here is the Lib·tards Plan to help our economy =►

    1. Assume that every college degree has intrinsic value so …
    2. Send every kid to college where 3. the kids will rack up enormous student loan debts to 4. graduate and get a job as a Starbucks® barista after moving back into Mom’s basement

    What could go wrong ??