The newly announced stimulus effort to help students has been denounced as an election year ploy that, as discussed in the below article, would result in less than $10 a month in savings for the average student. The question is whether such a use of executive power is constitutional given the conflict with prior legislation.
The student loan program is part of what President Obama calls the “We Can’t Wait” stimulus effort. As the chart below shows, tuition costs are soaring while expendable income is flat or falling for students. The result is that education is becoming out of reach for many students — a danger that has long-term consequences for the country in developing the base of a well-educated and trained workforce.
Student loans have grown by 511% since 1999 while disposable income has grown by just 73%.
The new initiative would limit the amount of student loan payments to 10% of a graduate’s income rather than the current 15% — a drop of five percent per month. Here is the analysis of the Atlantic:
For the average borrower, the impact would be small. In 2011, Bachelor’s degree recipients graduating with debt had an average balance of $27,204, according to an analysis done by finaid.org, based on Department of Education data. That average has ballooned from just $17,646 over the past decade.
Using these values as the high and low bounds of average student debt over the last ten years, the monthly savings for the average student loan borrower would be between $4.50 and $7.75 per month. Clearly, this isn’t going to save the economy. While borrowers with bigger balances would save more, this is the average. And even someone with $100,000 in loans would only cut their monthly payments by $28.50.
The only looming issue is not the impact on students but the impact on the Constitution.
The initiative would alter an implementation date under previously enacted legislation. That would appear a rather glaring violation of the separation of powers. Yet, we once again face the question of standing. We are increasingly seeing cases of clear constitutional violation which are denied judicial review and relief under narrow interpretations of standing. This is the case with our challenge to President Obama’s claim that he can take the country to war without a declaration of Congress. We have also seen an array of challenges to policies or programs ranging from unlawful surveillance to torture to assassination lists denied review. I have long been a critic of this trend which leave order areas of the Constitution largely aspiration and without enforcement — a position that runs counter to the views of the Framers and leaves a dangerous gap in our constitutional system.
The claim of the President to be able to unilaterally alter legislation is something that liberals denounced during the Bush Administration. Yet, this change has produced little objection from the same quarters. It should. The threat posed by increasing student debt is real and needs to be addressed. However, it is not enough to say that I had to circumvent the legislative process to get what I want done. “We Can’t Yet” makes for a dangerous approach to constitutional interpretation.
Source: The Atlantic
“Don’t challenge his expertise, you will have no standing.”
Do you prefer cheese or bread with that?
http://www.nytimes.com/2011/10/27/us/politics/obamas-support-among-blacks-remains-strong.html Black voters prefer Obama 95 to 3 over Mitt Romney.
Of course it’s constitutional Obama is a Constitutional lawyer and was Editor of HArvards law review.
Don’t challenge his expertise, you will have no standing
Education costs have soared for the same reason that housing prices soared: government became the universal lender and created tremendous incentives to borrow.
Students ability to borrow allows schools to raise tuition with little prospect that enrollment will fall as a result. Without this government lending tuition would be far lower in fields of study that are expected to result in average wages, and probably lower generally.
Government funds this student lending through national borrowing and inflation. Whether government forgives these newest loans or not, many will not be paid back anyway.
Students wind up in years of college and grad school studying in fields that private lenders would be reluctant lend on due to modest job prospects. The government has no such standards, distorting the market and creating an oversized and expensive academic sector, just as the realtors, mortgage lenders, appraisers, developers and entire residential real estate sector were oversized until 2008.
Bron says, “education is not a necessity. Welders, plumbers, electricians, tool and die makers, auto mechanics, etc. all do quite well, especially if they have their own business.”
If you think you can do any of these jobs without some form of education, go ahead. Most people in these trades end up becoming contractors, and that is a more complex financial life to manage than a W2 employee. Seriously, your comment is rather bigoted. I doubt you could weld to save your soul. An auto mechanic in 2011 is also a computer technician.
“The myth of a college education leading to a productive life has been fed to people who could do better working in a skilled trade. The only ones who benefit are the tenured professors.”
It’s not a myth, and there is plenty of data to back it up. Part of being educated in the information age is that you are responsible for your own learning, as in, not spouting off on unsupported nonsense. I do not want a tradesperson managing my medical care. I want an actual doctor.
“How many jobs could have been created by small trades people starting businesses of their own?”
And what kind of jobs would this create? More trades? How many toilets need to be fixed? From the sound of it, you are just fine with a single focus on money enough to scratch out a struggling existence, and nothing else. Life requires more.
Education is a basic human necessity. This complex world requires it.
OS, Law schools give out a lot of money based on LSAT scores. Some schools give national merit scholars free rides for undergraduate but that is also based on SAT scores. My daughter took the law scholarship instead of paying sticker.
Bron, you are partly right. Trade school is a good investment if that is what one is psychologically inclined to do. But what if your kid wants to be a nurse, doctor, lawyer or engineer? Or an accountant, teacher, scientist or banker?
I have a granddaughter with an IQ over 140. Her fiancee is also that smart. He wants to be an engineer and she wants to be a forensic scientist with a combined Ph.D., J.D. degree. What do we tell those kids about to start out in life with tremendous potential and no money. Grant and scholarship money have dried up and most families do not have anywhere near that kind of money.
education is not a necessity. Welders, plumbers, electricians, tool and die makers, auto mechanics, etc. all do quite well, especially if they have their own business.
Time to get off the education train and start telling people they can make it without a college degree. Most of the time college just prepares people to take orders from a corporate boss and get paid shitty wages as part of the bargain while working 60-80 hours a week on salary.
I laugh every time someone tells me they make $100,000 per year and say they work 80 hours per week. I never point out the fact that they only make $50 k per year which is only $25/hour. A plumber working 80 hours per week would get time and half on 40 of those hours. that is $37.50 which ends up being $130k per year straight time plus time and a half. If you own the company you can probably make twice that.
The myth of a college education leading to a productive life has been fed to people who could do better working in a skilled trade. The only ones who benefit are the tenured professors.
How many jobs could have been created by small trades people starting businesses of their own?
Swarthmore,
thanks for clearing up the real savings potential issue in this plan. $28.00 a month for 12 months helps young lawyers who have over $100,000 in student debt in a depressed job market. I do not see the problem with the student loan program being adjusted for the good of the people using it. This plan will allow students to save millions by being able to pay less after Wall Street got completely bailed out with interest free loans in the Trillions.
I do not agree with the President having the power to alter legislation, but when the Senate is being controlled by a minority and the economy is being tanked purposely in order to attempt a change in the White House and in Congress, maybe all bets are off. If a Supreme Court Justice is allowed to take valuable gifts from litigants and his wife is allowed to take thousands from lobbyists, maybe a President has no alternative. When the Supreme Court is bought by corporate interests and corporations are declared persons, then maybe something has to be done. I
There exists sufficient wealth in this country for any one to attend public college at no cost to them, and they need to be able to return at any time of their lives, given the rapid changes that are upon us. In this complex world, neither education nor health care are optional. Both are basic human necessities.
We monetarily reward the wrong people, and it appears for the first time in my lifetime, it’s not popular to be rich any longer. I wonder if the rich are going to wait until CEOs are taken from their houses and beaten before they get the message.
What we have cannot be sustained. We witness the Fall, and money will not save the rich.
Seems to me there was a petition going around, last I heard it had well over a million signatures, to fully “forgive” all student loans … a one time deal similar to the millions of dollars spent on clunkers for cash and billions on bank/wall street bailouts.
I’m sure the banks and wall street didn’t sign and all the politicians who have accepted financial aid in the form of constitutionally correct campaign funds certainly won’t give it their constitutional blessing by actually passing the legislation the petition requests ..
Hell, I bet there’s even something unconstitutional about starting the petition in the first place. If not, certainly we can get our constitutionally correct congresspeople to pass a no more petition constitutionally correct law.
OS,
I think the segment I heard on NPR was 10% of “disposable” income….whatever that term means….
http://www.cbsnews.com/8301-503544_162-20126172-503544/who-will-benefit-from-obamas-student-loan-plan/ The consolidation aspect will result in the ability to pay off the loans faster with much lower payments.
Maybe something is better than nothing. One check a month seems pretty good, especially if it maxes out payments at 10% of income. Not clear to me if that means gross or net, but at any rate will be better than the current system. I see that health care workers can get a break, which will help some of my family members whose student loan debt runs well into six figures.
This is yet another scam to play to Obama’s base. Blaring headlines are his mark in trade. The Iraq War is ended!!! Student loans are reduced!!! We’re here to help homeowners!!! Big jobs program on the way!!! In each case, a clear examination of the details show the headlines are a lie.
Obediently, the M$M prints the headlines without the details. It’s very cynical and I really wish people would smarten up about the adminstration’s propaganda. Each of his “bold” initiatives’ have been examined, clearly and thoroughly. For dissections of his various financial “initiatives” I would refer people to the blog “naked capitalism”.
As to Constitutional concerns. Once you’re killing 16 year old citizens with your wonderful, manly drones, I really don’t see how one can go much lower in toilet papering one’s ass with that piece of paper. (I also don’t see how killing children with drones and cluster bombs and a penchant for torturing young people such as Bradley Manning and Omar Khadr can make one go much lower as a human being!)
Gordon,
Why not….The Russian Constitution is pretty much like ours…in scope and purpose….How differently are we acting than Russia? Picking and Choosing…..
If the president can take the country to war in Libya without the approval of Congress and execute citizens with no due process, then he can pretty much do as he pleases.
The Constitution should not be a partisan tool. The question is not the merits of the president’s proposal. Those should be debated before the congress and if agreed upon enacted into law. The big issue this presents is if a President can pick and choose which parts and when to respect it, Pandora’s Box is literally opened. I caution my friends on the left to be careful in their cheers for the president ignoring the constitution. They may not be so pleased when some other portion is ignored in the future. This is never a good practice and one which should be universally repudiated.
http://thehill.com/homenews/administration/190029-white-house-hits-ryan-mcconnell-for-practicing-the-politics-of-division Republicans admit that their main priority is denying Obama a second term. They apparently do not care about jobs or stimulating the economy so go for it Obama.
If Bush can do it….This one can too….And he’ll just show you….Really, what is the difference?