Fast-forward to the present and Obama, by executive fiat, is finessing a regulatory end run around Congress to allow student debtors to refinance and consolidate loans on more favorable terms, capping student loan repayment rates at 10 percent of the portion of a debtor's income that goes above the poverty line, and limiting the life of a loan to 20 years.
You don't need to be a math wizard to understand that this is just a slick way of forcing taxpayers to take a bigger hit by increasing the number of loans that will never be fully repaid, yet another redistribution of wealth from our Marxist in chief. Nor do you need to be a clinical psychologist to grasp that our government is teaching young adults how to be financially irresponsible with impunity.
Never worried about long-term consequences, Obama is either oblivious to (highly unlikely) or unconcerned with the likelihood that his actions will contribute to the expansion of a growing college debt bubble that economists warn could be analogous to the financial collapse-inducing housing bubble. Just as with the housing bubble, these unrealistically priced loans artificially increase the amount of money being spent on education, which will result in universities raising their prices. Research by Richard Vedder shows there is a direct correlation between increasing student "aid" and increased college tuition costs.
Guess who will be hit the hardest? The middle class Obama purports to care so much about, who will have to pay more for school and, in some cases, enter the student loan program themselves, further driving up costs.
Adding insult to injury, Obama tells us that we should be grateful for his magnanimity. Students not only are getting free money but also, with their refinanced loans, will have extra gazillions to spend and stimulate the economy he claims is being held back by obstructionist Republican congressmen for partisan purposes.
But guess how much extra dough Obama's largesse will generate for the average student borrower? If you guessed $9 per month, you overestimated by a dollar. As HotAir's Ed Morrissey points out, Obama's Making Work Pay tax cut added about $8 per (SET ITAL) week (END ITAL) to the paychecks of (SET ITAL) all (END ITAL) workers in the U.S. for more than 2 1/2 years, which hardly stimulated anything.
Almost everything about this plan is wrongheaded and destructive, but Obama expects props for caring for these students. Well, I'm all for passing the love around, but wouldn't it be nice if he heaped some of it on the United States of America?