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Breaking news forget today's announcement from the president about a new plan to help underwater homeowners because.
That may have just been the opening act for a far bigger student loan bailout that's coming later this week.
Hi everybody I'm David Asman thank you for joining us Americans all one trillion dollars on their student loans.
As more than all the credit card debt combined will now the president is heading to Denver to announce on Wednesday -- plan.
To give those who -- some relief but.
Since all student loans are now made through the government my next guest is worried.
That taxpayers will be footing the bill for someone else's college education Lindsey Burke of The Heritage Foundation joins us.
Now good to see a Lindsay so what is the president planning exactly.
Well we don't know exactly what he's planning -- -- if they if anything nearing increasing federal subsidies for student aid or even forgiving student loan debt.
That's a real problem because why would we want to increase federal subsidies were -- stand alone that.
On the backs of waitresses in construction workers and the nearly three quarters of Americans who did not graduate from college and and that's really what we're seeing here when that happens -- -- the burden of paying for college.
Shifted from the student who directly benefits from college to the millions of -- of Americans who did not attend -- And the reason it shifts to all other Americans is because we now foot the bill for all the student loans the president.
Just to remind viewers who -- -- forgotten as a part of obamacare the reconciliation.
By which congress sort of brand obamacare down our throats student loans became the sole province of the US government.
They now originate the loans the government does rather than private banks.
That's correct and you know for all of this student -- takeover.
And all of the increases in federal subsidies over the decade we really have not seen -- mitigate the costs of college at all.
We have seen since 1982 you.
The costs of college increased 439%.
After adjusting for inflation which.
It's actually faster than the rate of increase of health care costs over the years so it is really done nothing to mitigate the cost of college.
Yeah and if defaults are going up and also isn't it easier to default.
If you're getting if you got a loan from the government and from a private -- I remember by the way was Wachovia bank was a bank that that I got my student loan from.
And they knew where I was after every single move by may we -- to -- watch jovial because it -- what Jovi.
Banks are very careful about following their loans the government much less -- look at so when -- Right and there's some in an under unanswered questions when the government takes over any factor let alone student lending industry and you know we really have seen federal subsidies increase -- an astronomical rate over the years we know that.
Federally subsidized -- like the pell grant program being one example.
Lonesome and grants the whole grant program has increased 475%.
Since the mid 1980s and so we're seeing these tremendous increases in grants and subsidies and really we're seeing no reduction and the cost of attending college so.
It really does create this chicken and -- cycle with the business lending cycle.
That students are now if things it does indeed Lindsey Burke from heritage thank you very much.
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