Student Loan Debt Crisis

by Gerri Willis

President Obama back on the campaign trail today, promoting his plan for the looming student loan debt crisis:

“This country has always made a commitment to put a good education within the reach of all who are willing to work for it. That's what makes us special. That's what made us an economic superpower. That's what kept us at the forefront of business and science and technology and medicine. That's a commitment we have to reaffirm today in 2012.”

Student loan debt is a huge problem. It’s now over a trillion dollars, more than credit card or auto loan debt in this country.

But the President's solution?

Extending the super-low federal loan rate: 3.4% interest.

Obama thinks we should spend six billion dollars on a one-year, election-year fix.

This does nothing to address the rising cost of college, which is going up at three times the rate of inflation.

The President's plan just makes it easier to take on a huge amount of government-backed debt, and easier for the colleges to raise prices.

But if we spend more money, do we get better education?

No.

In a landmark study, nearly half of students showed no significant gain in critical thinking or writing skills after two years in school.

How's that for value?

Maybe these students are having trouble finding jobs because they don't have the skills to work.

So where's all this money going?

The University of Missouri’s gym boasts an indoor river and waterfall, surrounded by palm trees.

Looks nice right? But what's the point? Are you going to learn about fluid dynamics? Come on.

What's the lesson here?

Today, schools are in an arms race, building fancy new facilities, vying to win over more students - and their government-backed loans.

It's the new entitlement: Go to a fancy school, goof off, and let Uncle Sam be responsible for the bill.

The rate of students defaulting on their loans has been going up every year since even before the recession hit.

This could be the next debt bomb, and our economy is not equipped to handle it.

Not when eight out of ten student loans are backed by the government.

It's time to hold the students and the schools accountable.

Throwing more tax-payer money at the problem is never the solution.