Â Â The latest push by the Obama administration to pander to a segment of the electorate involves the youth vote and student loans. Â The White HouseÂ expresses great concernÂ that graduating students should not be saddled with so much debt upon leaving college: “In 2010, graduates who took out loans left college owing an average of more than $25,000.” Â TheÂ press releaseÂ goes on to note:
On July 1, 2012, the interest rates on subsidized Stafford student loans are slated to double from 3.4% to 6.8%. To out-educate our global competitors and make college more affordable, Congress needs to stop the interest rate on these student loans from doubling.
If Congress doesn’t act before July 1, 2012, interest rates on loans for over 7.4 million students will double. And for each year that Congress doesn’t act, students rack up an additional $1,000 in debt over the life of their loans.
Meanwhile,Â CNN reportsÂ the numbers somewhat differently:
If Congress does nothing, the cost to students borrowing the maximum $23,000 in subsidized loans is an extra $5,000 over a 10-year repayment period. The cost to the federal government to extend the lower interest rate is $5.8 billion, according to an analysis by the nonpartisan Congressional Budget Office.
So what’s the big deal? Â Heck,Â one year of the Buffett RuleÂ would almost cover the $5.8 billion price tag. Â Well,Â CNN also notesÂ that “a big reason why House Republicans aren’t inclined to go along with extending the rate” is that according to a Pew Research Center analysis, a college degree can mean an extra $650,000 over a 40-year career. Â That extra $5,000 would be taken care of in 16 weeks. Â Not much to ask over 40 years.
On Tuesday, President Obama addressed some students in North Carolina. Â According toÂ Charlie Spiering at the Washington Examiner,Â he told them…
…that it was time for them “to be responsible” by “thinking bigger” than just themselves.
“We’re here only because somebody somewhere felt responsibility not just for themselves, but they felt responsibility for something else,” said Obama, reminding the students that their parents and grandparents … made sacrifices for them.
So what exactly should these students be responsible for? Â You would think at the very least their own debts at market interest rates. Â The president seems to think this is too much to ask, even going so far as to urge aÂ national whine-inÂ on Twitter to tell Congress “#Don’tDoubleMyRate.”
The reality of what these young people will be responsible for whether they like it or not can be found at theÂ Senate’s Committee on the Budget website. Â The Lifetime Share of the National Debt calculator reveals thatÂ the current lifetime share of the national debt for a 22-year old is $681,086. Â There goes that extra $650,000 that the college degree earned. Â And for what? Â A chance to enter the 1%, or at least the middle class, that will bear an every increasing burden of paying the national debt? Â The ultimate irony is that while the President is “reminding the students that their parents and grandparents made sacrifices for them,” his fiscal recklessness is saddling those students, their children, and grandchildren with financial “sacrifices” the likes of which this country has never known. Â ResponsibilityÂ is a lesson best taught by example, and the President has shown himself not up to the task.
Jeryl Bier blogs atÂ Speak With Authority