Saturday, April 28, 2012

The President's Bully Pulpit and Student Loans

Never underestimate the power of the Presidency. The President can use the Bully Pulpit to control events.

The recent flareup over student loans is an example.

ObamaCare nationalized much of the student loan program and Congress cut the loan rates, but timed the interest rates to double six months before the November 2012

Suddenly, like the Calvary rounding the bend in the old westerns, the President comes charging out of nowhere to fight to keep the interest charges low. He knows the Republicans can’t fight too hard against this shameless political appeal to students, one of his critical voting blocks in 2008.

The President is campaigning as he often does in a state of hysteria, proclaiming the urgency of the problem and the need for immediate action to avert a disaster.

The Congressional Democrats are willing to act, accompanying the relief by a tax increase on the rich if possible, if not then to increase the deficit. This time the disaster is of the Democrats own making.

President Obama campaigned in North Carolina, Iowa, Colorado, wherever, on the taxpayer’s dime, empathizing with the students’ plight, pointing out how deeply in debt he and Michelle were by student loans. He forgets to tell the students at public universities that the Obama debts were to receive degrees from Columbia, Princeton, and Harvard Law School, some of the priciest degrees in the country. He also forgets to mention that Michelle was making between $121,900 and $316,910 at the University of Chicago Medical School and that he had worked at a high price law firm after law school. Their loans were not an economic encumbrance to them.

Student loans are a burden to college students and graduates, but the interest rate is not the biggest problem the students face. That’s jobs. If the grads could fine employment, handling the debt load would be manageable in most cases, just as Americans in general have to manage car loans, credit cards, and even mortgages, without government relief.

It doesn’t matter that much what the interest rate is if the grad can’t find a job.

President Obama’s economic policies since January 2009 have been devastating to students, but not a word about that from the President. He’s engaging in one of his favorite political tricks of magic – change the focus away from the big picture, jobs and the economy, to small ball politics.

One study shows that 53% of recent grads are either unemployed or underemployed. Many recent graduates are moving back in with mom and dad.

The interest rate on student loans is not the second largest problem for students. That’s the skyrocketing cost of tuition, room and board, especially in the public universities. Barely a peep from the President about the pricing policies of college administrators, who are primarily liberal Democrats!

The loan burden would not be as great, whether the interest rate were 3.25% or 6.5%, if the necessary loans to cover tuition were substantially less.

The student loan interest rate isn’t even the third largest economic burden for students. That’s the gross inflation in text books. A student taking a full load is paying substantially more than $1,000 a year for books and other required readings - one figure is $1,300 annually, up $400 in three years.

The President is playing magic with the students. He is using the Bully Pulpit to hide the real issue: “It’s the economy, stupid.”

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