Monday, October 31, 2011

A Dose of Reality on Obama's Student Loan Forgiveness

The President's latest Socialist plan to gain votes has hit the scene:  Student Loan Debt Relief aka Obama's Student Loan Bailout.  It's an irresponsible plan that is devoid of personal responsibility that, by the way, is going to cost a whole lot of money.  There are so many questions to ask about it, so let's dive in.

First and foremost, it's pure entitlement mentality.  Let's talk about what a loan is, student or otherwise.  A loan is a bank giving an individual money to purchase something, like an education, for example.  The bank then is paid back with interest for that loan.  You see, the bank doesn't give loans to be nice or to help you out. If they give you a loan without charging interest, they have no reason to be in business, plus no revenue stream to pay their employees, pay interest on their depositors money and still make a significant enough profit to make the risk of giving you a loan worthwhile.

So you have people who have taken out loans to purchase a college education, have then proceeded to purchase that college education, and are now protesting saying "DON'T MAKE ME PAY YOU!  DON'T MAKE ME PAY YOU!"  I'm sorry, but that mentality is as preposterous as going out to dinner, ordering a meal, having the meal you ordered served to you correctly with fresh ingredients and finding the meal delicious, then protesting the manager for asking you to pay the bill.  In short, you're seeking to rationalize and legalizing YOU breeching your end of contract after the other party in the contract, the bank, has fulfilled their end of the contract.

Secondly, with Obama's proposal to forgive all unpaid loans after 20 years.  So why pay it back?  Rework your student loan payments to pay minimal amounts, set it on a 30-40 year term, pay $50 or $100 per month instead of what you genuinely should owe on a standard 10 year repayment plan, and then see a huge part of it forgiven because it's outstanding after 20 years.  I don't need to break out my Delorean Time Machine to figure out how THAT is going to end. It's going to end with either a) Banks only allowing an absolute maximum of 20 years to pay back loans to protect themselves and not allowing defferments, etc for any reason, thus meaning failure to pay will crush your credit score OR b) A massive crash from banks and government departments giving student loans in 20 years when people don't pay them back (and not giving new capital to give loans to the next generation).

Thirdly, and I cannot stress this enough:  WHO IS GOING TO PAY FOR IT?  I can guarantee you Obama's answer, at least as it pertains to government loans, is raise taxes.  Are you with me in the 53% of Americans who pay taxes?  We're going to get the bill so Obama can make life "fair" or in reality so he can get the college vote strong for him in 2012.  Obama is going to tell you the wealthiest amongst us must "pay their fair share."  It's a lie, of course, again the top 1% pays 38% of the taxes already.  The reality of the claim is that Obama is telling you you're entitled to someone else's money, this time for college.

Look, I have a student loan.  I'm paying for it know why?  Because I legitimately owe that money back.  The fine folks at Direct Loans gave me a loan to go to college.  I used that money to go to college.  Now I am paying for that education I received.  I am fulfilling my end of the contract, Direct Loans finished fulfilling theirs back in 2005 when I received my degree.  Now it was up to me to complete my end of the bargain.

I also can tell you that I know very few people with socially useful college degrees who can't find a job and owe thousands upon thousands of dollars.  The people who have degrees in Business, or Communications, or Computers, or Accounting, or Engineering all have jobs in their field.  The ones who don't are the ones who have degrees in Art or Philosophy or some other such thing.  Those of us who made the decision to get a marketable degree are now dealing with the positive consequences of our decision, those who made the decision to get a degree in their hobby are experiencing the negative consequences of their decision.  That's the reality.

But this generation doesn't WANT to take responsibility.  It's somebody else's fault.  Somebody is supposed to make their problems go away.  They don't want to deal with the consequences of their decision to take out a loan and to get a degree that isn't marketable.  And now President Obama is coddling this to get votes.  Shame on you, Mr. Obama.  Shame on you.

No comments:

Post a Comment

All posts will be reviewed subject to the Rules for Commenting. Any post that does not abide by these rules will not be posted, entirely at the discretion of the blog editor.

Commenters who repeatedly violate these rules will be permanently banned from commenting, and thus none of their comments, regardless of content, will be posted.