In January 2009, the month Obama was inaugurated, the balance of the Federal Direct Student Loan program was $119.803 billion. In June 2010, the last month that private-sector lenders could make federally guaranteed student loans, the balance was $178.806 billion. In February 2013, the latest month reported, it was $588.048 billion.
The balance in Federal Direct Student Loan program has increased nearly fivefold under Obama.
And it continues to rapidly expand. "In FY 2013, ED (the Department of Education) estimates that 22.5 million new DL program Stafford Loans and PLUS Loans, averaging $5,366 each and totaling $120.8 billion, will be made to undergraduate and graduate students and the parents of undergraduate dependent students," said the CRS in its March 4 report.
It is not clear whether the government actually expects all of these students to repay these loans.
The CRS report describes numerous ways students can get out of paying back all they owe in a timely manner to the taxpayers.
For example, the loans offer an "Income-Based Repayment Plan" -- or IBR. "The IBR plan is designed to present borrowers the opportunity to make monthly payment amounts based on the relationship between their student loan debt and their income," said CRS. "It affords borrowers who experience prolonged periods of low income the prospect of debt forgiveness."
Then there is the "Income-Contingent Repayment Plan" -- or ICR. "Repayment according to the ICR plan also affords borrowers the opportunity to make loan payment amounts based on the relationship between their student loan debt and their income; and the prospect of debt forgiveness for those who experience prolonged periods with low incomes."
If these don't work, CRS says the secretary of education is authorized to "establish alternative payment plans for borrowers of DL program loans who demonstrate that they are unable to repay according to other available repayment plans due to exceptional circumstances."
Even some graduates who can afford to pay their debt to the taxpayers, CRS reports, can have "DL program loans forgiven, cancelled or repaid as an incentive for entering certain occupations or professions, or for performing certain types of public service."
The bottom line: As an increasing number of Americans borrow money directly from the U.S. Treasury for finance college, there will be an increasing interest among Washington politicians to forgive this debt and redistribute wealth not from bankers to students, but from people who never went to college, or who did and paid for it themselves, to people who attended college on the Obamacare plan.
Terence P. Jeffrey is the editor in chief of CNSnews.com. To find out more about him, visit the Creators Syndicate web page at www.creators.com.
COPYRIGHT 2013 CREATORS.COM