A recent report shows the total debt load borne by borrowers of Federal student loans has increased 463 percent since President Barack Obama began his first term. And it grew at a rate that outpaced student borrowing in the George W. Bush era by more than 500 percent.
CNS News, which crunched the numbers last week, reported that the current balance of outstanding student debt has reached $674.6 billion, compared with $119.8 billion in January 2009, at the start of Obama’s first term.
The dramatic jump isn’t simply coincidental with Obama’s Presidency; it’s a result of it. As CNS observes:
Direct federal student loan spending began to rise rapidly in fiscal year 2010, when the Health Care and Education Reconciliation Act — one of the two laws that make up Obamacare — gave gave the federal government complete control over federal loans for education, the Direct Student Loan (DL) program. This aspect of HCERA became effective July 1, 2010, when the amount of outstanding loans stood at $178,806,000,000. Since then, the balance has increased by 277 percent.
As private lenders have bowed out of the student loan market, thanks to an absence of profit motive as government continues to keep interest rates artificially low, the government itself has begun to play an increasingly prominent role as a primary lender.
And the government doesn’t hold borrowers to the same repayment standards that banks do.
“The problem is further complicated by Obama’s willingness to use debt forgiveness programs to absolve certain students of their obligations,” writes The Daily Caller’s Robby Soave. “The president has frequently championed and expanded such programs, which allow graduates to unload their debt burdens if they work for certain government agencies for lengthy periods of time.”
It’s just one more example of the Obama Administration’s push to expand the welfare state in a calculated effort to capture a greater swath of the broad American middle class.