Bankruptcy, Barack Obama, Education / Schools, Law Schools, Politics, Student Loans

Obama’s ‘New’ Plans For Student Debt Are Not New In Any Way

President Barack Obama really thinks recent graduates are stupid. Seriously, he thinks that graduates out there suffering under crushing debt obligations in an economy where there aren’t enough jobs to go around are so dumb that they don’t even know what they want.

Educational debt has been a big part of the Occupy Wall Street protests. Today, President Obama will announce “new” programs to help students in debt. At least, he wants the media to report these programs as “new.” Those who have been paying attention, such as debt-saddled law students, will recognize that there is very little “new” about these programs.

In fact, Obama seems to honestly think that students and recent graduates wouldn’t be so angry if they knew about all the programs already in place.

It’s all a bit patronizing. If the Obama administration had really been paying attention, they’d know that recent graduates want meaningful reform, not the piecemeal incremental efforts that we’ve seen so far….

I wanted to wait until Obama actually made his speech today before I wrote about it, but way too many people are running around touting Obama’s “new” program as if the president suddenly remembered that young people propelled him into office.

Look, nobody wants Obama to do something to help ameliorate student debts than I do. I’ve been pushing this for years. So I can tell you that Obama’s plans today represent no change from how the administration has handled this issue since the beginning of the recession.

Here are the details Obama is expected to talk about later today, according to the New York Times:

At a press briefing Tuesday afternoon, Melody Barnes, director of the Domestic Policy Council, said the president would use his executive authority to expand the existing income-based repayment program with a “Pay as You Earn” option that would allow graduates to pay 10 percent of their discretionary income for 20 years and have the rest of their federal student loan debt forgiven. That plan would start next year….

The lower caps of the new program were scheduled to go into effect for new borrowers in 2014, but, Ms. Barnes said, “because we know the frustration of crushing loan burdens, we have to act now.”

Ms. Barnes noted that over the last month, more than 30,000 people had signed a petition on the We the People platform at whitehouse.gov, asking for relief on student debt.

“It’s a message heard loud and clear,” she said.

Evidently you did not hear the message with any kind of clarity. Students are asking for loan forgiveness. They’re asking to be able to discharge their debts through the bankruptcy laws. They’re not asking to have the IBR percentage dropped by five percent.

And, mainstream media, that drop is not new. As the lady just explained, the IBR percentage was always coming down. Obama just accelerated the timing. If I say I’m going to get drunk tomorrow, but then decide to get drunk today, I didn’t come up with a new plan so much as I changed the timing of my old plan.

The other part of Obama’s announcement is that he is expected to remind people that IBR exists in the first place. There is some use in that; many people who are eligible for IBR don’t know it. But the existence of IBR is not new. There’s no reason to believe that the people actively protesting right now don’t already know about the program.

So let’s make sure we call this speech what it is. Obama is not offering new programs. He is not proposing new legislation. He is not offering debt “relief.” These plans represent no hope for a change from what’s already available. In response to public protests about the rising cost of education and the crushing effect of student loan debt, Obama is literally offering more of the same. He’s changing the dates on programs already in place and is hoping that both the media and the public are too stupid to notice.

There are new things Obama could do to ease the burden of paying for education. He’s not doing any of that today.

President to Ease Student Loan Burden for Low-Income Graduates [New York Times]

Earlier: Student Loan Bailout. Just Do It.

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