Student Borrowing Increases More Than Fourfold Under Obama

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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.

Personal Liberty

Ben Bullard

Reconciling the concept of individual sovereignty with conscientious participation in the modern American political process is a continuing preoccupation for staff writer Ben Bullard. A former community newspaper writer, Bullard has closely observed the manner in which well-meaning small-town politicians and policy makers often accept, unthinkingly, their increasingly marginal role in shaping the quality of their own lives, as well as those of the people whom they serve. He argues that American public policy is plagued by inscrutable and corrupt motives on a national scale, a fundamental problem which individuals, families and communities must strive to solve. This, he argues, can be achieved only as Americans rediscover the principal role each citizen plays in enriching the welfare of our Republic.

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  • dan

    …unavailable entry level employment had a contributing affect. With real unemployment approaching 24% (shadowstats) and urban/youth unemployment
    being roughlytwice that….and not everyone having mama’s basement to hang out in,
    a dorm room sounds mightey cozy.

  • ChuckS123

    How can this be? 4 times as many people couldn’t be going to college. Maybe more are because they can’t get jobs, like Dan says, but not that many. Maybe easier terms meant students used more credit. Easier terms would also induce colleges to increase tuition. Maybe the biggie is former students unemployed and not paying off existing loans as much as they did.

  • Alan

    When these people can’t get jobs, or simply decide they don’t feel like repaying these loans the taxpaying American suckers will be expected to pony up the money.

  • Bill

    This is the same as the community redevelopment act where people that could not afford it were given loans. Not everyone benefits from college. We still need plumbers and auto mechanics. They usually make more money than a college grad

  • Bill

    This is the same as the community redevelopment act where people that could not afford it were given loans. Not everyone benefits from college. We still need plumbers and auto mechanics. They usually make more money than a college grad