Hillary’s Student Loan Proposal Fails to Understand Math, Millennials

Spencer Brown
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Posted: Aug 15, 2015 12:01 AM
Hillary’s Student Loan Proposal Fails to Understand Math, Millennials

Millennials. Some think we’re lazy, others think our unorthodox career paths are how we game the system. Among our biggest pet peeves are a lack of upward mobility and a rigid, one-size-fits-all prescription for finding success. The worst? When established keepers of the status quo try to force the future they think is best, with little opportunity to escape the allegedly good intentions of an overzealous government. Just what has our expansive government done for young Americans, and what will it do to us as we get older?

Forty million of us pursued higher education and are on the hook for a whopping $1.2 trillion in student loan debt. A recent survey found 56 percent of millennials have put off major life events like buying a home or a car, getting married, even starting a family, because of student loan debt. America’s student aid system has financed the college educations of millions of Americans, but every spring, optimistic graduates walk across the stage and into a deeper pit of debt than the class before them. Speaking to the crippling effects of student debt, a former White House adviser referred to millennials as “overly indebted,” and “not in a position to spend and move forward.” This is good news for the rely-on-Hillary crowd, bad news for millennials seeking to make a life for themselves by taking chances, starting a business, or charting their own course for success.

Unveiling “The New College Compact” plan Monday, Hillary Clinton made her latest play to win over young voters, many of whom see her more as ‘Grandma Clinton’ rather than ‘President Clinton.’ Hillary’s plan aims to lessen the need for student loans and allows refinancing of current debt into a payment that is capped at 10 percent of a person’s income, with any balance forgiven after 20 years. With flying money emojis and listicle-style infographics, Hillary is gunning for the millennial vote, hoping we’ll ignore the past inflation of the student loan bubble and buy into her plan for a full-service government. After all, those two decades of refinanced loan payback fit perfectly in Hillary’s plan to create a generation of citizens entirely reliant on the government’s help to achieve the American dream she's picked out for us.

So who wants to be the one to tell Hillary that her plan has already been debunked?

A study conducted by the Federal Reserve Bank of New York proves Hillary’s plan ought to receive a failing grade. From 2001 to 2012, the number of annual student loan originations doubled, with the federal government backing 90 percent of the loans, reports the Wall Street Journal. During this time the average cost of tuition increased by nearly 50 percent, and the average loan per student jumped 58 percent. Furthermore, when Congress approved an increase in the amount of aid available per student in the mid-2000s, students took advantage of this extra money, but it was the universities they attended that really benefitted by absorbing most of the new funds for recruitment and marketing.

In a blog post accompanying the rollout of her plan for student aid, Hillary writes that “one of the biggest ways we can raise incomes is by making college affordable and available to every American.” What Hillary doesn’t mention is that she needs to boost incomes in order to start taxing more of the top earners in order to fund her growing portfolio of entitlement promises. Hillary goes on to decry the rising cost of college education, without recognizing the root cause of the increase: government subsidies. For every dollar in Direct Subsidized Loans a college gets, tuition increases 65 cents; it increases 55 cents for every dollar of Pell Grants received. The Wall Street Journal’s conclusion from the Federal Reserve study? Aid bills don’t broaden access to education, don’t spur enrollment, and federal money that intends to help students has trapped them in a web of higher costs and increased debt. Rather than offering sincere solutions, Hillary continues to insult millennials' intelligence and belittle our problems, as shown by a tweet from the democratic hopeful on Wednesday:

Enacting policies and programs to help Americans get diplomas may sound good, but Hillary is using the government to co-opt up to a quarter-century of a recent graduate's future. Her plan ties them to a monstrous cradle-to-grave government of her party’s creation that stifles innovation and forces millennials to wait longer than ever before being able to achieve their American Dream. Hillary’s math is plain wrong, and so are her assumptions of what millennials require to secure a bright future.