Obama has been on the student vote tour visiting university campuses in swing states North Carolina, Iowa, and Colorado. Obama doesn’t deserve the student vote.
At every stop, the president promises to confront the evil Republicans in Congress who want to double the interest rate on loans for 7.4 million college students from 3.4 percent to 6.8 percent. Only Obama can save the students from being gouged.
As has been noted in many places, the July 2012 interest increase on student loans was part of a law proposed by Democrats in Congress in 2007 which greatly expanded the student loan program.
In 2007, then-Senator Obama was campaigning for president in California and Oregon and was not even present for the debate and vote on the “College Cost Reduction and Access Act.” He raised no objection to the interest rate increase, which was included by the Democrats in the Act.
What Obama is proposing now is a one year (election year) extension of the current interest rate of 3.4 percent — the cost is $6 billion.
Obama proposes to fund this cost by closing the “loophole” that allows shareholder-employees of small business S Corporations to avoid paying the Medicare tax on non payroll earnings. No other dividends from corporations pay the Medicare tax; Medicare is deducted only from paychecks. It’s also unclear (if not illegal) how the increased funding for Medicare will fund the student loan interest.
But the politics is very clear. Republicans in Congress will face the choice of either raising student loan payments and driving students to the polls in November to vote for Obama or raising taxes on small business, a core Republican constituency.
Since all spending and tax bills must originate in the House of Representatives, the Republican majority there could introduce their own student loan interest extension bill funded, say, by royalties from oil drilling in ANWR or by reductions in green energy loan guarantees to Obama bundlers or by repealing ObamaCare, etc.
Obama’s naked student loan bribe is just the tip if the iceberg of corruption regarding institutions of “higher” learning.
Federal government research grants and Pell grants (subsidizing tuition and room and board expenses for poor students) have surged under Obama to the universities he visited in the three swing states and for many other colleges and universities where Obama needs the students to rekindle their 2008 enthusiasm for him.
How important is North Carolina to the re-election of Obama? In 2011, UNC Chapel Hill got over half a billion dollars in research grants, up from third of a billion in 2007. All told, UNC got $1.1 billion in 2011 from the federal government, nearly double since Obama took office.
What’s worse is how Obama economic policies have resulted in smacking college graduates with the highest un- and under employment rates (except for black males) of any group in the country.
For all Americans (except federal workers) Obama’s government led, debt financed “recovery” is a flop.
Housing prices are still falling, with one failed government mortgage relief program after another hammering any natural recovery in the housing market. The banks have effectively been nationalized, with credit diverted from private business to finance the tsunami of federal debt. Politically connected corporations get loan guarantees and tax breaks. Everyone who shops for food or gas knows that inflation is here and getting worse. Public debt approaches Greece proportions.
Obama’s plan: get re-elected and raise taxes on everybody and everything.
The winter hope for economic recovery has faded with a spring of renewed economic bad news. American corporations are profitable primarily from overseas operations. Jobless claims are back up. The reported unemployment rate is phony, leaving out those unemployed who have run out of their unemployment benefits.
All of this has hit college graduates hard.
According to Associated Press, “about 1.5 million, or 53.6 percent, of bachelor’s degree holders under the age of 25 last year were jobless or underemployed…” Some 85 percent of college graduates now move back in with their parents after graduation. Those graduates fortunate enough to find a job start at salaries that average 10 percent less than starting salaries in 2007.
Worst of all, college students and college graduates have incurred that $1 trillion of student loan debt because federal government subsidies coupled with state government budget shortfalls have driven up tuition and fees at all colleges and universities.
Since Obama was sworn in, college tuition and fees at four year institutions have surged over 25 percent. The 2008-2009 average was $6,591. The 2011-2012 average was $8,244.
So, for American college students, here’s the reality.
College costs have been driven up by government policies, budget shortfalls, union contracts and just plain greed. Want to talk about income inequality? Meet UNC Chancellor Holden Thorp who makes $420,000 a year, $20,000 more than President Obama.
Rising college costs means more student borrowing. More borrowing plus higher interest rates equals a lower standard of living for years as the loans are paid off even for those grads who get a good job. For those college degree holding baristas and waiters, the future is grim indeed.
So, tell me, what is the reason college students or graduates would vote again for Obama? For more of the same?