Obama administration fouled up college loans

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student debt

Obama administration

fouled up college funding

Obama screwed up college loans. How do I arrive at that conclusion. Here are the facts as to what happened.

Previously, college students got loans through banks, guaranteed by the government. So Obama said, “Why go through the banks, since the government is guaranteeing the loans anyway, we might just as well loan direct.”

Sounds like common sense, doesn’t it?

However, here is the problem. When they went through the banks, banks had stricter requirements and loans were tougher to get as it reflected on a bank’s profit-and-loss statement. Even though loans were guaranteed, defaults didn’t look good on the bank’s financial statements, so bank managers were more strict on the loans as to who got them and for what.

But when the government got into the act, thanks to Obama, their requirements were very liberal as they weren’t spending their own money, they loaned to every Tom, Dick, and Harry. Money was easy to get. Kids were using the money, not only for tuition, but for apartments, cars, stereos and entertainment and you name it.

Then the colleges figured, money was EASY to get for students, so they got greedy and thought, we will raise out tuition fees and give raises to our people (i.e. Washington State University has 30 people making over $300,000 a year! How many of you make $25,000 a month?) And this is still happening, as tuition and fees at colleges are going through= the roof. The colleges think, “So what? It is easy free money from the government.”

Now according to the news, this is what is happening, there are 4.6 million people defaulting on their college loans!! The total of college loans is a staggering $1.4 trillion. According to the news, there could be another tax payer bailout in the future. Also, according to the news and I believe it, is that some hear that loans should be forgiven and some politicians say college should be free, so many people have just quit paying on their loans period. They are figuring their loans will be forgiven in the future, and you and I will pay.

The solution is for the government to get out of the college loan business. For those that aren’t paying, take it out of their income tax refund. Why should us tax payers be taxed to pay for this craziness?


Priest River

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