Recent speeches by Tennessee Republican Sen. Lamar Alexander highlight a connection that has yet to be reported in the media and is yet to be understood by the young people struggling with high interest rates in the hopes of financing their college education.
According to the Congressional Budget Office, $8.7 billion of the money collected in student loan interest payments actually goes to pay for ObamaCare. The CBO estimates that the interest rate on these loans could be reduced from 6.8 percent to only 5.3 percent were the funds not used to subsidize the healthcare reform law and other federal programs.
The profits from student loans are divided as follows: $8.7 billion goes to pay for ObamaCare; $10.3 billion goes to pay down the federal debt; and $36 billion goes to Pell Scholarship grants.
The 16 million American students who now have student loans are paying for ObamaCare out of their meagre incomes just at the point when they graduate from college and need funds to start their lives, buy their first homes and begin a family.
Politically, how did the Republicans miss this issue in the last election? It is well to speak of fines that will be imposed on young people who don’t buy health insurance, but these penalties are in the future and still seem abstract to people in their teens and twenties. But student loan payments are a daily present reality, standing in the way of the rest of their lives. They, alone among forms of debt, are not dischargeable in bankruptcy and stain their credit reports forever if they are not paid.
For the administration to raid their wallets at this vulnerable time in their lives shows a level of arrogance and unconcern that is truly outrageous and stunning. That 2012 Republican presidential nominee Mitt Romney and his vice presidential pick Rep. Paul Ryan (R-Wis.) did not jump on this issue is beyond belief.
Alexander notes that the federal government borrows the funds for the student loan program at 2.8 percent and then lends it to the students at 6.8 percent, a markup of 4 percent.
The nexus between the student loan program and ObamaCare is purely opportunistic. As the Affordable Care Act was passing through Congress, its wheels greased by the wholly fraudulent assertion that it didn’t need 60 votes to pass the Senate, the administration decided to put in a provision eliminating the private student loan industry, fully federalizing the program. What was not widely understood at the time was that it hoped to raid the funds paid by students to provide money for the bottomless pit known as ObamaCare.
Republicans need to jump on this issue. How can President Obama and the Democrats hope to win the votes of those students burdened with loans when they are, in effect, directly taxing them to pay for ObamaCare? The president has strayed so far from his campaign commitment not to raise taxes on the middle class that it is laughable to recall these days his promise then. But to tax students struggling to pay loans an extra 4 percent interest and then to divert a good portion of that money to pay for his healthcare reform is beyond belief.
Undoubtedly, few students know of this rip-off. If they did, they would curse Obama with each stroke of the pen they use to pay off the staggering obligations of student debt. The entire policy of student loans assures a kind of indentured servitude for our college graduates, and to piggy back on this burden the costs of ObamaCare is quite extraordinary.