Crony for-profit “colleges” were ready with
student loan forms and record prices for credit hours. Like the housing bubble, borrowers were
guaranteed to be very high risk and likely to default. It worked like a charm. It was all part of Obama’s plan to bring the
US to its fiscal knees.
But Obama doesn’t get all the credit. It took
several other components to create this disaster. The first was delivered in 1986,
when Congress neglected to close the Mexican border and again in 1989, when
George HW bush doubled legal immigration. We had open borders in a welfare
state. Next Clinton signed NAFTA
guaranteed to off-shore millions of jobs.
In the meantime, the DOE was busy ruining public education.
With no jobs to go to, graduating seniors
signed up for student loans at predatory colleges and began to amass a huge
debt payable to the US government.
Credit hour prices in the $400 range were
imposed and student loan accounts were set up to ensure high interest rates on
these loans averaging 10%. The loan
balances were set up to double in 8 years.
So student loans taken out in 2008 and 2009 to complete 40 credit hours
that had a principle balance of $16,000 are now $28,000.
These students are still working close to
minimum wage jobs and the DOE has resorted to garnishments on their pay limited
to 25% of net income. If these borrowers are lucky enough to make $1200 per
month, the amount garnished will be $300 per month or $3600 per year. But with interest charges averaging $1680 per
year and climbing, the garnished amounts will hardly put a dent in their
balances.
The best we can do is to ensure that none of
our relatives take out these student loans.
Norb Leahy, Dunwoody GA Tea Party Leader
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