The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Obama’s Student Debt Reduction Plan is Small Change

Oct 31, 2011

President Obama wants students to know he feels their pain. Speaking to college students in Denver, he said, “Over the past three decades the cost of college has nearly tripled. And that is forcing students to take out more loans and rack up more debt. ... So the idea is, how do we make college more affordable, and how do we make sure you are burdened with less debt?”

He says he has a proposal to reduce student loan debt: “About 1.6 million Americans could see their payments go down by hundreds of dollars a month, and that includes some of the students who are in college right now.”

Nonsense! Obama’s student debt reduction plan applies only to those few who have at least two very specific types of federal loans, one from the Department of Education and one from a bank under the Federal Family Education Loan program. Those loans had to have been taken out before July 2010. And the interest rate on those loans will be reduced by all of one quarter of one%. Someone who has $20,000 dollars in FFEL loans at 6.8% would save $2.56 a month.

It’s more of Obama’s “Hope and Change” – he hopes he can buy student votes for small change.