Full Disclosure:
This began as a two topic article I wrote close to a year ago. Here is one of those parts with a few comments at the end.
Student Loan Bailout
While I doubt I’ll have a need to turn this into a full blown Basket of Fish article, I can guarantee you it will be included in the Optics article. Have you ever found yourself yelling at the TV during an interview with a government official saying… “Ask the question!!” or “Ask the follow-up question!” and they never do? Frustrating, isn’t it? And yes, even on FOX news. The next question you ask yourself is… what is it about this bailout and constantly rising college tuition do people NOT understand? So let’s take a moment and ask the questions which are on everyone’s minds and I’ll do my best to answer them.
1. Why tuition’s keep going up.
The answer is the same reason why we had the housing collapse back in 2008. When the government steps into guaranteeing home loans to anyone who wants them, even those who had no way in hell of making the payments on subprime loans, demand for homes would skyrocket.Which is exactly what happened. The result? Home prices skyrocket as well. At the same time— some in the stock market noticed what was going on, saw the writing on the wall that initially few could see, and began to buy shorts on the packaged loans banks were offering for sale to investors. When the proverbial shit hit the fan, the housing market collapsed along with the demise of a few investment firms. If you have not seen the movie The Big Short, see it. The movie explained it all in a very entertaining way.
Now, what does this have to do with student loans? Everything! College and University tuition’s went way up the minute the US Government got into the student loan business. Before the Obama Administration, the government guaranteed student loans that borrowers took out from private lenders. Meaning, not so simple to get a student loan. Tuition’s reflected this. Next thing you know, the Obama administration gets rid of the guarantee program and makes it a direct federal loan, they got rid of all underwriting. Today, it controls more than 90% of all student loans. Now any idiot could get a student loan and party hardy at the college of their choice. Demand went out of sight! Schools loved it and immediately raised tuition. Why? Because they could— because now there were plenty of kids who could afford it. They just signed their name on the dotted line. Then reality kicks in and these kids realized the truth that yes, they in fact had no business being in college and their degrees in Sandbox weren’t going to help them in the real world. Like the housing market— defaults were mounting exponentially. The difference is, these are government loans. Banks were not involved in this deal. The US Government had recreated the worst aspects of the subprime mortgage lending crisis. In fact, when you think about it. The government isn’t just bailing out students who signed for these loans, they’re also bailing out their own program. And if nothing changes, they’ll have to do it again…. and again.
And how will this affect Colleges and Universities? It won’t— at least not in a negative way. In fact, it wouldn’t surprise me if they raised their tuition yet again. Why not, right? They can just add it to the billions they already have.
2. Is there a solution?
Absolutely. Get the government out of the student loan business and go back to private lenders or, if you really want to lower tuition’s, get completely out of student loans. No more government student loan guarantees. Trust me, private lenders will be much more careful in determining (by merit) who deserves to get a student loan. Meaning, less students— meaning, lower tuition’s to attract more. There are already many ways to earn your way into higher education. If you want it bad enough.
Pure Optics
The student loan bailout or, buying votes is pure optics. Sadly, people think this is going to immediately take place. Just a sec— have to stop laughing. But that hasn’t stopped liberal media from fawning all over Biden for making the announcement because it most definitely will be in the courts quicker than it takes a student to drink a beer on spring break. Sorry kids.
One interesting note: Not too long ago Nancy Pelosi said on camera that Biden did not have the authority to cancel student loans. She said student loan forgiveness could only take place through an act of Congress. Now she praises it. Imagine that…
Just a Thought
[end of original article]
Close to one year later…
SCOTUS has finally done what everyone knew they would. They told Biden he had no legal authority to forgive student loans to the tune of 10 to 20 thousand dollars. What I found most surprising about this was how many were actually surprised— by this. To all the disappointed students out there now wondering how to not only pay off their loans but also the added thousands of credit card debt they racked up in anticipation of the bail-out, this above all else should teach you not to rely on mainstream media for your education regarding what Biden will or won’t be able to get away with, with the stroke of his pen. But he appreciates your incredible gullibility and thanks you for your support and votes as he will undoubtedly once again try and figure out a way around it because he knows a bill like student loan forgiveness would never pass in congress.
Again, even at the outset when he including Nancy Pelosi both said it wouldn’t be constitutional, they made the attempt anyway. Knowing it would be struck down in court, a large swathe of students actually believed he was going to do it. Sadly, that did not surprise me. Nor did the rhetoric coming from the White House and media screaming with the news of the ruling, it’s all those damn conservatives on the Supreme Court. It’s all their fault. Term limits! Pack the Court!— being their solution as they seek out someone to lynch for giving them the idea that even though it was the students themselves who committed the original sin of signing on the dotted line as they were handed the check for the amount of the loan they agreed to repay, they shouldn’t have to, right? At least that’s what Biden said.
For some completely unknown reason, what many people fail to realize— or understand for that matter is what the role of the U.S. Supreme Court plays in Government. They do not make a judgement on whether or not something is morally right or wrong, good or bad or perhaps even righteous or not. No, they have only one job and that is determining whether or not something falls within the boundaries of the U.S. Constitution. That’s pretty much it and they do their best not to allow partisan politics or ideology sway or influence their opinions.
So the next time a politician wants to sell (or in this particular instance, give) you the Brooklyn Bridge, do yourself a favor and use a little common sense and keep your wallet and your vote in your back pocket. And quit believing everything you hear on CNN and MSNBC because the price you ultimately pay (with that vote of yours) for that free bridge ends up far exceeding your wildest expectations in other ways you’re just now seeing.
And it’s not a pretty sight.
