"Gingrich Calls Obama’s Student Loan Plan A ‘Ponzi Scheme’"
The negative attention garnered by Texas Gov. Rick Perry’s (R) assertion that Social Security is a “Ponzi scheme” and “monstrous lie” to America’s youth apparently wasn’t enough to keep his fellow Republican presidential candidates from making similar claims about other proposed programs. Speaking at an education forum hosted by News Corporation and the College Board in New York last night, former House Speaker Newt Gingrich nodded to Perry while calling President Obama’s proposed plan to help college graduates who are buried under student loan debt a “Ponzi scheme” that will “bankrupt the country,” CNN’s Ashley Killough reports:
Gingrich, however, called for the privatization of the student-loan program, arguing the president’s plan would bankrupt the country “by promising to every young person, ‘You won’t have to pay off your student loan as a student.’”
He said the plan appeals to students now, but by the time they will “have to pay off the national debt” as taxpayers when they’re older, Obama will be long gone.
“It’s a Ponzi scheme even by Gov. Perry’s standards,” Gingrich said, also making a quip referring to Texas Gov. Rick Perry, who’s repeatedly described Social Security as a Ponzi scheme.
Obama’s plan, which would lower monthly repayment costs for millions of college graduates, has been met with resistance from congressional Republicans and presidential candidates alike. Still, Gingrich’s attack is truly bizarre, given that nothing about the plan even remotely resembles a Ponzi scheme. Meanwhile, American student loan debt is expected to surpass $1 trillion this year, a record high that amounts to more than Americans owe in collective credit card debt. The issue has been one of the driving forces behind the 99 Percent Movement, as student debt has piled up due to rising tuition costs at both public and private colleges and universities.
Even in the face of those numbers, the opposition shouldn’t be shocking, as Republicans continue support policies that make it harder for low- and middle-income Americans to attend college. The GOP opposed efforts to reform the federal student loan program, demagoguing changes that ended the practice of letting banks act as unnecessary middlemen in the federal loan process as a “Washington takeover” of the student loan industry. And after including massive cuts to the Pell Grant program in their budget, party leaders now argue that such grants actually make it more expensive to go to college, claims that are demonstrably false.