Dems College Loan Plan Reveals Wizard Behind Curtain
Here's the give: College students will be able to get loans for half the current interest rate -- 3.4% instead of 6.8%. Forget about the fact that 6.8% is a pretty darn good rate for a consumer loan to one of the flakiest segment of the borrowing population. Forget about giving our emerging citizens a dose of unreality and government udder-sucking right when they should be pragmatically coming to understand the value of work and money.
Instead, consider how Pelosi & Co. intend to pay for this $6 billion gift to a bunch of kids who, by and large, haven't learned enough yet to be conservative. Here's her plan, paraphrased by AP:
To avoid increasing the deficit, the bill's cost would be offset by reducing the yield on college loans the government guarantees to lenders and cutting the guaranteed return banks get when students default. Banks also would have to pay more in fees.Students, who are inclined to lean left, get a nice present from some kind folks in donkey suits. Bankers, who are inclined to lean right, get lower yield, less cover for the legions of post-college loan-dodgers ... and for that, they get to pay higher fees.
Do you think the pool of lenders just might shrink, and that supply will suddenly be much less than demand?
No matter to NanPo. She never bought that supply and demand stuff anyway. As a liberal Dem, her economic mantra is, "We demand it, fat cat big business better supply it."
A fine lesson for emerging citizens to learn!
Related Tags: Politics, Pelosi, Democrats, College loans, Deficit