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College Tuition or Hidden Tax?

Permalink 05/04/12 17:51, by OGRE / (Jeff), Categories: Welcome, Background, In real life, On the web, History, Strange_News, Stimulus Spending, U.S. Economy, Elections

This issue hits home for me. I won't say how, but I currently have a ridiculous amount of student loan debt. I never really considered it a tax, but because of the Obama Health Care law all student loans are now offered only through the government. GSEs now manage all student loan debt (unless the debt accrued before the change).

These are Obama's remarks from a Rolling Stone Magazine interview published on September 28, 2010.

We wrestled away billions of dollars of profit that were going to the banks and middlemen through the student-loan program, and now we have tens of billions of dollars that are going directly to students to help them pay for college. We expanded national service more than we ever have before.

So, the profit that was going to "banks and middlemen" is now going to the government in the form of interest? Sounds like a tax to me. The government has monopolized the student loan industry. Because the government is a single entity it can offer loans at extremely low rates, while in the aggregate the interest earned, even from those low rates, is massive. Politicians can now use student loan interest rates as a political tool just as they do with other taxes.

Here's where things get creepy.

America's student debt has reached $1tn, and interest on college loan repayments is scheduled to double on 1 July unless Congress acts.

America's total student debt burden last week topped $1tn - more than the total of the entire US credit card debt - and it shows no sign of easing.

The government now controls the largest amount of unsecured debt in the entire country. Perhaps this is why Obama is so excited about college loans. In Obama's first State of The Union Address he encouraged everyone to devote on year of their life to higher education. The government controlled student loan system has nothing to do with people receiving an education, it has to do with them becoming a new cash cow for the government. Now the government can gain interest on the largest unsecured debt in the entire U.S. economy.

When you consider that jobs are still being lost faster than they are being created college isn't much of a help.

April jobs report: Hiring slows, unemployment falls

Hiring slowed in April and workers dropped out of the labor force in droves -- not a good sign for the job market going forward.

The economy added just 115,000 jobs in the month, the Labor Department reported Friday, down from March when employers created 154,000 jobs.
Obama battles job crisis

Meanwhile, the unemployment rate fell to 8.1% as 342,000 workers dropped out of the labor force. At 63.6%, the portion of the working-age population participating in the job market is now at its lowest level since 1981.

115,000 jobs were created April, but 342,000 workers dropped out of the labor force. CNN has now been forced to report that the unemployment numbers the government uses --are in no way representative of the number of people without jobs!

The current unemployment figures are based on the number of people looking for jobs vs. the number of available jobs. If the number of people looking for jobs decreases while the number of available jobs remains stagnant unemployment goes down. This is a nonsensical attempt at calculating unemployment.

If only 63.6% of the working-age population are employed real unemployment (people without jobs) would be 36.4%; that's a number no college graduate with huge student loan debt want to hear.

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I believe that for the United States of America to survive, we will have to get back to our roots.


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