Obama Just Found Another Way to Make College for Expensive

“The main difference is that unlike them, it’ll explicitly rate colleges by their “accessibility and affordability” and, if Congress agrees, tie federal aid to the score they get. Colleges that admit more Pell grant students will get a higher ranking and therefore more aid. This sounds great, but in reality it means that existing federal aid will beget more federal aid.

 It gets worse. One of the most under-reported aspects of administration’s scorecard is its loan forgiveness provision. Currently, “new borrowers” who obtained their first federal student loan after 2007 are eligible to signup for something called the “Pay As You Earn” program. This program caps their loan repayment at 10 percent of their income for 20 years after which the remainder is written off. (For professions such as nursing it takes only 10 years to get the write off.) In other words, students take loans according to their needs, and repay them according to their ability and hit taxpayers for the rest. The president wants to expand this socialist prescription to all students who receive federal loans.”

“One reason college costs have grown 27 percent beyond inflation over the last five years is that parents are picking up an ever smaller share of their kids’ college costs and the government (and other) grants ever more, according to a report last year by Sallie Mae, agovernment-sponsored enterprise that manages student debt. Loan forgiveness will shift this equation even more toward the government, giving students even less reason to seek—and colleges less reason to become—more cost-effective institutions.

Ultimately, if the administration wants to make college affordable, it’ll have to stop reading the Communist Manifesto and curb inflation. And in order to curb inflation, it’ll have to give parents information—and incentives—to be better shoppers.”



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