American college students will hit a milestone this year by having a record $1 trillion in student loan debt. Aware of the burden, President Obama announced a plan to help college students reduce their loan debt by consolidating their loans and lowering the maximum required loan payment from 15 percent of a student’s income to 10 percent. Debt would be forgiven after 20 years, instead of 25. The plan could help millions of students by lowering monthly payments by hundreds of dollars.
Naturally, Republican lawmakers are slamming the plan. Former House Speaker Newt Gingrich called it a “Ponzi scheme.” Rep. Michele Bachmann (MN) called it an “abuse of power” that creates a “moral hazard.”
House Education Committee Chairman John Kline (R-MN), meanwhile, insisted that the plan actually “means more debt for students” because it encourages “more borrowing.” Kline continued his rant this morning on Fox and Friends, calling the executive order “a mistake” that will only “encourage” borrowing that leaves “taxpayers holding the bag”:
KLINE: This is a mistake. It’s very confusing. I’ve talked to a lot of people about what the president proposal is, it’s very difficult to figure out. Some of the changes are going to affect a very small group of students, some of them are going to affect a larger group of students. All of it we’ll encourage more borrowing, I’m afraid, and leave taxpayers holding the bag. […]
We’ve seen the cost of college go up and up and up. Tuition and fees. The colleges and universities are going to have to face the fact that there is not an endless supply of money coming from state and federal governments. They’re going to have to look at their own operating costs and start to curtail the costs of going to college. We simply can’t keep providing money from the federal government in the form of subsidized or actual loans and Pell grants when we don’t have the money.
Kline noted that the executive order is “technically legal, but it is a stretch for him to do this and it was not the intent of Congress to do this at this time.” But the fact that Republicans don’t wish to address the record amount of student loan debt should not be surprising.
As TP Economy editor Pat Garofalo notes, the GOP “vigorously opposed reforms that stopped billions of federal dollars from going to banks to act as unnecessary middlemen in the federal student loan program.” They called the elimination of corporate welfare a “Washington takeover” of the industry. Pair that with Republcians’ callous cuts to the Pell Grant program and it’s easy to see that, whatever Kline and the GOP intend to do, it has nothing to do with helping students.