Minimum rates for student loans doubled today from 3.4% to 6.8% despite Obama's campaign promise just 11 months ago to not allow it to happen. This is not the first campaign promise he used to secure votes from a particular demographic knowing it would never be fulfilled. At least not in the way that we expected.
Consider the background on the student loan issue. In 2007 then House Majority Leader Nancy Pelosi wrote the bill which was passed into law, remember the democrats held the majority in both the senate and the house. The language of the law directed the 2007 interest rate to immediately be cut in half and then reinstated to the original rate in 2013. So all along democrats knew the rate was going to increase again and it was timed to occur during an election cycle in order to provide a campaign issue for the young adult voters. The republicans fell right into the trap. They suggested the government has no business in the 'loan industry' and that the process should be privatized. "The federal government should not be in the business of originating student loans; however, it should serve as an insurance guarantor for the private sector as they offer loans to students," according to the 2012 platform. "Private sector participation in student financing should be welcomed." The Dem's claimed that if the republican plan was approved it would benefit the rich on the backs of the poor students because the greedy banks would of course raise the rates. By the way, the government is forecasting a record $51 billion profit from the student loan program this fiscal year.
So one side wrote and passed the bill knowing the rates would go up again during an election cycle when the bill expired and even so claimed (in blaming the second party) that if rates were allowed to go up it would be the rich taking advantage of the poor. Never mind that it was the government earning a $51,000,000,000 profit, not the rich, taking advantage of the poor.
For their part, the other side claimed (in blaming the first party) that the government was already too big, mismanaging enough capital and that by holding down the rates and making loans more readily accessible the colleges were artificially increasing tuition to keep up with the demand. Despite just over 54% of students completing a degree in 6 years, yes six, and almost 30% never completing the coursework for a degree.
Are you still with me?
Well rates went up but not due to the GOP, they went up because the democrats blocked a bi-partisan agreement to tie the rates to the US Governments cost of borrowing, just like federally backed mortgage rates.
Why did this happen? With some in congress already calling for the future legislation to make rates retroactive, it would appear there is some other underlying purpose for allowing the bill to expire without passing a new one. But what? Is it possible that funding the Affordable Health Care Act (becoming more unaffordable every day) has something to do with it? Stay tuned for that one!
“Just because something isn't a lie does not mean that it isn't deceptive. A liar knows that he is a liar, but one who speaks mere portions of truth in order to deceive is a craftsman of destruction.” Criss Jami
Suffice it to say BOTH sides are playing the issue to their advantage. The problem with this fact is that voters on one side do not believe their party would lie while voters on the other side seem willing to tolerate their party's deception if the objective is met.
You, dear reader, get to decide on which party the shoes fit.
In the meantime, take off the party affiliation blinders and pay attention to the evidence, not just the statements being made but the clues all around us. In the face of constant mixed signals we have to work diligently to determine the truth. We are not so different from a computer, when good information goes in good decisions will come out.
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