The Politics of Student Loan Debt: 2012 Republican Candidates Weigh In
Outstanding debt from student loans surpassed credit card debt in 2010 and is expected to hit the $1 trillion mark before the end of the year. With calls for student loan reform coming from Occupy Wall St. protests around the country, several Republican candidates for next year’s Presidential election are weighing in and proposing changes to the way the government participates in higher education financing.
Cain: Student Loans Should be Dumped in Favor of Working Through College
Herman Cain said Thursday to an education forum sponsored by The College Board that the federal government should not be responsible for helping students pay for college with grants and student loans. Instead, Cain said, money for college should come from state and local sources.
“I believe that if a state wants to help with college education, that they should do that,” Cain said. “Secondly, you have people living within communities within states that are willing to help fund those kinds of programs. So I do not believe that it is the responsibility of the federal government to help fund a college education because herein, our resources are limited and I believe that the best solution is the one closest to the problem.”
“The people within the state, the people within the communities, ultimately, I believe, are the ones who have that responsibility,” Cain said.
Cain, a graduate and now member of the board of trustees of Morehouse College in Atlanta, cited his own experience in working his way through college as a model for college students.
“I happen to know that there are a lot of young people who don’t come from high economic income families and they made different choices as to the schools that they go to, secondly, like I did, found a way to work my way through school because my parents were not able to do that,” Cain said. “If you want an education, a college education in America, I believe that people can get it if they are determined to get it. They might have to work a little harder. They might have to work a little longer, but the fact that we have so many options for people to get an advanced education in this nation, I think it is one of the big pluses that we have, that we offer our young people, that a lot of other countries do not offer” (“Herman Cain: College Aid Should Be States’ Job,” Politico, Oct. 27, 2011).
Although Cain said he had made no decision regarding whether he would abolish the U.S. Department of Education, he said that he would evaluate the department if elected president.
Paul: Education Department and Student Loans Should be Abolished
Earlier this month on NBC’s “Meet the Press,” Ron Paul said that if he were elected president he would not only get rid of federal student loans but he would abolish the Education Department altogether. Paul said that the federal student loan program was a failed program that burdened students with $1 trillion of debt at a time of when there are no jobs and the quality of education is deteriorating.
Paul blamed the intervention of the government in education for rising tuition costs and cited the Education Department as one of five Cabinet departments that he would eliminate as part of a plan to cut $1 trillion from the federal budget. Although the demise of federal student loans was not included in his plan, he said he’d eventually kill the program.
“Just think of all this willingness to want to help every student get a college education,” said Paul, who holds a medical degree from the Duke University School of Medicine. “I went to school when we had none of those. I could work my way through college and medical school because it wasn’t so expensive” (“Ron Paul: End U.S. Student Loans,” Politico, Oct. 23, 2011).
Bachmann and Gingrich: Obama’s Student Loan Plan is Perilous
While some GOP candidates proposed their solutions to the problem of student loan debt in the future, other candidates took issue with President Obama’s plan to offer college students some relief now.
Reacting to Obama’s student loan plan Thursday, Michelle Bachmann and Newt Gingrich offered harsh criticism. Bachmann called the executive order an “abuse of power” while Gingrich referred to it as a “ponzi scheme.”
Under Obama’s plan, borrowers would be able to consolidate federal student loans issued by private lenders at a lower interest rate while participants in income-based repayment plans would be able to pay a smaller share of their monthly income and have remaining loan balances forgiven earlier.
“I believe it is abuse of power from the executive to impose via an executive order a wholesale change in the student loan,” Bachmann said. She said the change creates a “moral hazard” for borrowers.
“There is a morality in keeping our financial promises, and I don’t think we should push that off onto the taxpayer,” Bachmann said. “The individual needs to repay and be responsible for repaying their student loan debt” (“Bachman Says Obama’s College Loan Plan is an Abuse of Power That Encourages Debt Dodging,” The Washington Post, Oct. 27, 2011).
Meanwhile, Gingrich warned that privately-issued federal student loans should be reprivatized before Obama “bankrupts the entire country by promising to every young person you will not have to pay your student loan as a student. However you will later have to pay off the national debt as a taxpayer.”
Make way for Ron Paul in 2012, even if he has to run as a third party candidate…
Ron Paul is right on this one, and he is talking to people like they are adults.
The price charged for anything is what the market will bear. The reason why education is so costly; why a student can no longer work his way through college, paying his tuition while incurring little or no debt, is because of government student loans.
Government student loans have introduced vast amounts of taxpayer money into the education industry that is guaranteed by the government (the taxpayers). As a result, tuition costs have skyrocketed because universities, colleges, and online schools can charge more, because that is what the market will bear.
Anything government gets involved in, prices rise. Get government out of the student loan business and tuition costs will drop.
And how exactly are students supposed to “work their way through college” without loans when there are no jobs? Riddle me that, Jay.
I think this article is a bit misleading. Ron Paul has no immediate plan to get rid of student loans. He said he would like to eventually get rid of student loans but it is not in his presidential plan. He does have an immediate plan to fix the economy though which would bring jobs. Hope that answers your question.
It’s all part of the same issue. You can’t get rid of the loans until you get Government out of the rest of it. The correction will come with time and with the correction comes jobs. The round robin argument can’t go on forever. Your type of short sighted and small minded thinking is what created this mess. Americans need to think in increments of 100 years not 1. The only reason we are even talking about this now is we can finally see the edge of the precipice.
Professor, good question. The problem is that using deficit spending to give loans to a select class (students, corn producers, green energy investors, etc.) is spending your tax dollars for a business subsidy and invites protected market inflation. In the end, the student who pays for their own education is penalized twice – they got no free ride, and their future wages are deflated in buying power because of the required inflation of currency to pay for the free rides of others. The entitled student has mountains of debt to pay for an artificially inflated tuition bill.
Professor Sanity – there are always jobs available. A student could work two full time jobs during the summer to pay for school. If their school is too expensive find a cheaper one. If a student were really in trouble they could borrow money from their parents, or for that matter, if the parents have enough money the student doesn’t need to borrow in the first place. I do have a question though: if there are no jobs available how does the student plan on paying off the loan once they graduate, through osmosis I suppose ??
Education is a mess and there are no easy answers, but I’m hesitant to agree that a hands off approach to the issue at the federal level is going to be of any assistance. Suppose that we follow Herman Cain’s model… State A steps up to the plate and invests in education, State B does not, everyone in state B then flocks to state A. Long before State B feels the pressure to adopt a program similar to state A, the system that state A put in place is overrun and dismantled. Although, by and large, I take fiscally conservative positions, some of the banter about education is so off the mark that is downright disingenuous. You want long term growth? Double down on education and infrastructure.
Why should my tax payer money go to support federal student aid ? Its my money and they are a trillion dollars in debt. Its obvious it doesn’t work. I shouldn’t have to pay for other people to attend school on a federal level. I should be able to spend here on a local level which can be held accountable a lot easier than at a national or federal level. President Paul 2012 !
I worked at a for profit college. Four remedial classes were the pre-requisite to getting the BA. It costs about $10K to take these classes. To qualify for these classes you must be unable to calculate interest on a loan. To qualify for the loan to take these classes you must be able to sign your name in the presence of a college advisor (sales associate). Some students do not belong in college. The only career these people are getting trained for is debt slave. This is an industry not a small number. Next time you look on the train at Devry or some city college ad at least 10% of their students are simply being trained to be debt slaves. Shame on the people saying everyone deserves to go to college. Take it case by case.
God, Cain’s answer is such bs. I would have loved to work through college. Maybe back in the 60′s it was possible to support yourself and pay for tuition,books, etc by waiting tables. Sorry, but when tuition is 20-30k a year, it’s just stupid to say something like that.
Ron Paul answers this intelligently and realistically. If no one can afford these colleges, the price will drop like a stone. You let the market dictate the price or you get this massive inflation.
Most people in the U.S. take out the greatest amounts of student loan debt beyond that which can be paid back to the respective loan authority. It is tragic that many citizens remain simple-minded and ignorant sheeple through unfounded dreams and false hope with optimism in an illusory future. There is no waiting employment offer or perfect tangible result after college graduation. These are empty promises and wishful thinking to degree holders that are completely meaningless. Unless we eradicate the major systems of disease within a corrupt United States Corporation and Charter of the Federal Reserve Banking System; no change will ever occur. It is through a devalued currency with the U.S. Dollar that no one can or has been able to solve the outsourcing problem of the last 30 years. It would be extreme if people worked to solve the U.S. Dollar Crisis to restore real manufacturing and production in an emphasis placed on arts, science, and technology of innovation. Nope this will never happen, most common people who graduate will settle with the worthless argument of staying the status-quo by accepting low-end service-sector work. Of course, this will never solve the true problem; but, re-born the real diseases America needs to elimiate. Low-wages and unacceptable working conditions is all that is seen through the United States. As each graduate fight every day for table scaps, more time is wasted to restore and give change to make America a better place for all. In statistics, most settled Americans earn their total household income not more than $30,000 (the average). Most, on average, will stay at that minimum wage work with a hopeless future and no real change. We got change. Less Employment, More People With Student Loans, and More People Dependent on Welfare. Good Luck to the U.S. population. You will see more difficulty rather than optimism in the near future if action is never taken. Prepare by the most and expect for the worst in the coming years of 2012 and beyond. Love and Light. Mr. J Crowell