Forgiving student loans is a misappropriation of funds

See excerpts from a NY Times article – 3/25/2010 (below)

The federal government takeover of student loans was part of the Health Reform package. Folks forget there were two bills – the Patient Protection and Affordable Care Act of 2010 AND the Health Care and Education Reconciliation Act of 2010.
https://en.wikipedia.org/wiki/Health_Care_and_Education_Reconciliation_Act_of_2010

The federal takeover of student loans was supposed to “earn” $60+B for taxpayers over the 10 year budget window (part of the “revenue” to pay for Health Reform – so President Obama could assert that Health Reform wouldn’t add one thin dime to the deficit). https://www.cbsnews.com/news/transcript-obamas-health-care-speech/

However, the changes essentially smoothed the way for colleges and universities to dramatically increase the cost of a college education (Purdue excepted), because there were taxpayer-subsidized loans available to finance it. And, given all of the defaults, and more recently the suspensions without interest since the pandemic began, federal student loans have been a significant contributor to current deficit spending. This was one of many Health Reform provisions that didn’t work out as planned … provisions that either never took effect or were revised by later Congressional actions – all of which resulted in a failure to fund the expansion of taxpayer subsidized health coverage through the public exchanges and Medicaid. Examples include CLASS, the individual mandate, the Cadillac Tax, etc.

This is also a great example of why TAXPAYERS should NEVER trust CBO projections!

Click to access 03-15-student_loan_letter.pdf

And, it is a perfect example of the great lies told by President Biden and other D’s regarding Build Back Better and its scoring. I plan to send a contribution to Joe Manchin’s reelection campaign in 2023, after the 2022 mid-term elections and a new Congress is sworn in, conditioned only on Congress’ continued failure to pass Build Back Better. .

From the NY Times …

Student Loan Overhaul Approved by Congress

By David M. Herszenhorn and Tamar Lewin
March 25, 2010
WASHINGTON — Ending one of the fiercest lobbying fights in Washington, Congress voted Thursday to force commercial banks out of the federal student loan market, cutting off billions of dollars in profits in a sweeping restructuring of financial-aid programs and redirecting most of the money to new education initiatives. …

The revamping of student-loan programs was included in — if overshadowed by — the final health care package. …
Democrats celebrated the legislation, a centerpiece of President Obama’s education agenda, as a far-reaching overhaul of federal financial aid, providing a huge infusion of money to the Pell grant program and offering new help to lower-income graduates in getting out from under crushing student debt. Still, the final bill is less ambitious than the original proposal. …
“The Democratic majority decided, well look, while we’re at it, let’s have another Washington takeover,” said Senator Lamar Alexander, Republican of Tennessee and a former federal education secretary. “Let’s take over the federal student loan program.” …
The Congressional Budget Office said the direct-lending approach would save taxpayers about $61 billion over 10 years. …
The legislation will make it easier to pay back student loans, by reducing the share of income that a graduate must devote to loan payments and by accelerating loan forgiveness — but not right away. Those who take out new loans after July 1, 2014, will have to devote 10 percent of their income to payments, down from the current 15 percent, and those who keep up their payments will have their loans forgiven after 20 years, reduced from the current 25. …
“Income-based repayment is a fantastic addition to the Senate bill that will allow over a million students to avoid being crushed by unmanageable levels of debt,” said Rich Williams, a higher-education advocate at the U.S. Public Interest Research Group.

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