Student loan politics
The war on “millionaires and billionaires” is back! And at a most politically convenient time for President Obama, U.S. Sen. Elizabeth Warren and their party.
Yes, the president this week has pivoted away from irksome foreign policy issues and onto friendly domestic territory, with an issue Democrats see as a winner in the midterm elections — the high cost of student loan debt.
The president yesterday announced plans to expand the number of student borrowers who are allowed to cap their loan repayments at 10 percent of their income (a unilateral move for which the administration could provide no cost estimate) along with other underwhelming steps to ease the burden of student debt.
More significant, the president has endorsed passage of a bill — filed by Warren — that would allow student borrowers to refinance both their government and private student loans at lower rates.
And because there is no issue that this White House can’t reduce to a stark choice between good and evil — the evil so often being those who dare to earn a hefty paycheck — well, Obama said members of Congress now face a choice.
“Lower tax bills for millionaires,” he said, “or lower student loan bills for the middle class.”
Warren’s refinancing bill is estimated to cost $58 billion over 10 years, a cost that would be covered by closing those “loopholes” that allow the wealthy to pay rates that may be the same or lower than individuals who earn much less.
And while it’s true that student loan debt is burdening the U.S. economy, this plan does nothing to help student borrowers find the jobs they would need to repay the money they borrowed (with knowledge of what it would cost to repay).
And even more to the point, making borrowing that much cheaper will do nothing whatsoever to bring down the high cost of a college education, which is the true driver of student loan debt.
This is nothing more than politics as official policy — the president’s shout-out to U.S. Rep. John Tierney, a vulnerable Democrat, at yesterday’s White House ceremony was just one of the clues — and it’s a misguided policy at that. — Boston Herald