Do students want lower loan interest rates or jobs?
White House missing the boat?
- Duration 7:52
- Date Apr 28, 2012
White House missing the boat?
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College graduates don't need lower interest rates they need jobs that's the word from the Forbes gang -- -- body -- David Asman.
With a White House and congress in a frenzy to extend lower rates for student loans were finding out that over half of recent college grads.
Are either unemployed or underemployed working part time as bartenders -- waiter so.
What -- they need more jobs.
Or lower rates let's go in focus was saved -- -- -- guard -- Brennan Victoria -- -- Conger and -- -- -- and we got the eighteen bridge let's start with you.
They need job -- you can't pay back alone if you have a lousy job.
And to get more jobs in this economy and we need a functioning economy on Friday we got the terrible news that the first quarter grew 2.2 percent.
That's exactly half of where the American economy should be during an economic recovery.
And we have an administration that never talks about economic growth -- -- Endlessly about fairness never about economic growth consequently.
A -- job environment consequently we have this crisis brewing in student.
-- so -- younger lower rates don't help but you don't have a job.
-- the -- vision need both I mean kids have to be able to get prepared.
But do the work force that's the future one of the things we do a little bit to -- -- is judge everything by what's happening right now.
Look this state of Ohio this week announced that there will not be enough college graduates.
To fill the jobs that they expect to have come and over the next six years let's not get mired down in today let's give these -- these kids a chance to get an education we still know.
That you -- twice as much money coming out of college with a degree that you -- if you only have a high school degree let's look to the future a little bit but Steve.
It's another government bail -- another government program and some people argue that it's those government programs that are holding back growth real economic growth.
Well that's right in the college student should be up pulling the president they won't they're got good manners instead of cheering him.
Because tuitions are rising rapidly the economy stinks and they're not gonna get those lower interest rates the journal had a piece -- today.
It only applies to new loans made after July 1.
So well this is real bad magician stuff you're not even gonna get the cut rate on interest rates.
And so the president was serious about jobs he would be over -- undoing the binge spending.
Reforming the tax code getting -- of obamacare and the other thing -- when the economy back.
And study hurts them and expects them to vote forum so Morgan -- -- the garbage and you just get out of date interest rate businesses up whatever the government touches it seems to screw it up.
Yeah I honestly this interest -- debate makes me crazy I do think we need both I think we need jobs and I think we need lower interest rates however air.
All are talking about here we need -- growing -- three Joba.
You can't have it could -- -- out but simply isn't as interest rates situation I think you know going back -- -- was saying.
It only takes on new loans only -- and on subsidized Stafford -- it doesn't tackle larger problem I would say yes we need jobs but we also need a complete overhaul.
Of the student lending financial model in general because it doesn't matter is.
Subsidized loans are one tiny piece what most students are are sitting under the hardship -- is private loans which have higher rates and.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- President never talks about growth what he is focused on is the redistribution.
Of income with this legislation.
Focuses on is taking money from families who it's earned and saved to send their kids to college.
And have them subsidize those families that don't have a cause that is absolutely true ritual is gonna pay the five point nine billion dollar cost the bulk of that cost.
And for closure is.
Have been increasing since the sister program to -- -- which initially set rates at 3.4 percent went into a fact -- I think by the way I think was breaking bad said that's not true not rich but inventory we haven't heard from you go ahead.
Well looked to Rick's earlier point about we need to look into the future -- -- here I agree but we also need to look at our recent past.
When you flood -- market with subsidized loans prices go up artificially -- got that in the housing bubble and now we're seeing it.
In college tuitions and it's a shame it's a shame for taxpayers.
And it's a shame for those students who walk at a school.
With egregious amounts and terms of loans it's we've we've got to just completely -- -- and -- how that government to settle at the end tells schools.
Or what we're gonna pay laughs I mean this -- and so.
Territorial I think you -- -- picture graphic point because Steve what is lost in all this is that the -- -- it -- make -- -- well here -- the colleges they're able to pay their professors 200 grand a year for work in about five hours a week.
They were injured there're there're two wish your -- just continue to go up on page sixty grand a year lot of other people are paying that much they're making out well because they -- guaranteed payment either by taxpayers are poor parents.
That's right every time a subsidy comes along -- loan program comes along tuitions that are aren't soaring.
That's why they're going up for four times the rate of the state general standard of living and twice the inflation rate of health care.
So every time the government put some money administrators at colleges pocket -- that's why administrative bloat is at the college level almost summer rival to the federal government.
-- -- doesn't that make you upset the fact that these colleges are making out like bandits a lot of them are.
But filling up their endowments -- billions of dollars raising tuition rates because they're guaranteed payment by us taxpayers.
Yeah actually it does.
Make me upset and I'm really all for finding the ways to get tuition down but.
Big but here do we really want to -- in America were only people with a lot of money can send their kids to college think about that.
This is not what's best for our country.
It wasn't there are alternatives are -- not mortgage and there are state schools -- -- had lower tuition rates correct.
There there aren't even those rates are going up and you know I'm I'm annoyed at colleges that are charging an arm and a leg of that should -- -- -- the government to.
And here's why they might be talking about interest rates on subsidized Stafford loans but pell grants had been cut.
And the vast majority of the money that comes from the federal government goes to -- it doesn't actually go to students.
They're billion afford college bridge.
I don't want to get your caught in the -- here let's pull back to the main issue which is growth the economic growth shouldn't the administration just be focusing on that because that's also a lot of -- when you figure out how to grow the economy all these other problems become kind of small in comparison.
You're exactly right David four and a half percent growth covers a lot of -- And if you look at the absolute political Rinker in the United States right now.
It's due to the fact that we're living in this zero -- economy.
And or very close to it and when that happens people always see somebody's games as somebody else's loss.
If we could look over the horizon and get back to our historic rate of growth in a non recessionary environment which should be four and a half percent and boy we would with you know the enthusiasm in this country would go up students would have right jobs unemployment would fall below -- -- really.
Is -- the rich is right because one of the moral hazards of these student loans is that it hurts incentives to create jobs and to work because if somebody else is gonna get the this big subsidy to go to college that I'm gonna get if I work -- -- to achieve it for my child what's the sense of me going out there and -- -- network unintended.
Consequences I have as a -- when a government steps in thanks -- well not.