This week President Obama toured college campuses in states critical
to his re-election. And thanks to an aggressive interpretation of
federal law, he managed to get taxpayers to pick up the tab. But it was
the content of his message that will really cost Americans: a demand
that Congress cut the rates on federal student loans for the next
academic year. Congress seems willing to oblige, which means taxpayers
appear headed for another painful lesson in government lending.
The obvious political play is to shore up support among the college-age voters who went overwhelmingly for Mr. Obama in 2008 but are understandably less enthusiastic in 2012. So Mr. Obama is trying to cheer up these kids by freezing the current 3.4% fixed rate on the government's subsidized Stafford loans for undergraduates.
The Pelosi Congress of 2007 knocked the rate down to 3.4%. But to make the program seem less financially reckless—and perhaps knowing it would be impossible for a future Congress to allow a rate spike in an election year—Democrats scheduled a doubling of the rate to 6.8% this July 1. Under fuzzy Congressional budget math, Mr. Obama's one-year rate freeze will cost $6 billion, which he intends to cover by raising taxes.
At a campaign stop, er, we mean while travelling on "official business" at the University of Colorado at Boulder, Mr. Obama scored Republicans for suggesting that he was simply trying to distract attention from the bad economy. "What economy are they talking about?" asked Mr. Obama.
Read more: http://online.wsj.com/article/SB10001424052702304811304577366180123952456.html?mod=WSJ_Opinion_LEADTop
The obvious political play is to shore up support among the college-age voters who went overwhelmingly for Mr. Obama in 2008 but are understandably less enthusiastic in 2012. So Mr. Obama is trying to cheer up these kids by freezing the current 3.4% fixed rate on the government's subsidized Stafford loans for undergraduates.
The Pelosi Congress of 2007 knocked the rate down to 3.4%. But to make the program seem less financially reckless—and perhaps knowing it would be impossible for a future Congress to allow a rate spike in an election year—Democrats scheduled a doubling of the rate to 6.8% this July 1. Under fuzzy Congressional budget math, Mr. Obama's one-year rate freeze will cost $6 billion, which he intends to cover by raising taxes.
At a campaign stop, er, we mean while travelling on "official business" at the University of Colorado at Boulder, Mr. Obama scored Republicans for suggesting that he was simply trying to distract attention from the bad economy. "What economy are they talking about?" asked Mr. Obama.
Read more: http://online.wsj.com/article/SB10001424052702304811304577366180123952456.html?mod=WSJ_Opinion_LEADTop
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