Obama’s New Student Loan Bill Deeply Flawed

On Friday, Barack Obama signed legislation that kept transportation workers employed by spending more than $100 billion of our money over the next two years. The legislation also kept the 3.4% rate on federal loans instead of letting it double to 6.8%. The legislation was a sop, of course, to two constituencies that are key to Obama’s reelection, the youth vote and the construction workers who have been out of work.

Of course, the construction workers might want to consider who put them out of work in the first place, and as for the college students, well … they aren’t concerned about the rest of us working stiffs; they just want what they want, and they want it now! Forget the fact that if the loans had doubled, it would cost them an average of $1,000 extra to pay after they were done with college, which, amortized over the years, is a rather paltry sum; forget the fact that it was the Democratic Congress in 2007 that separated the student loan rate from the treasury-bill rate; forget the fact that if the two rates were still tied to each other, the student-loan rate would now be roughly 1%.

Let’s vote for Obama because he sure cares about us!

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