You're watching...
Center for College Affordability Director Richard Vedder on the problems facing Obama’s effort to help students facing mounting loan debt.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Of the party drew boos as the president gets his way -- -- student loan debt you can just -- student loans themselves Dubai Richard better.
Says that would mean the very -- -- -- Wall Street.
Would be rally against the -- class system.
And returning college educations of what it wants -- agreed class system that favor the rich over pretty much anyone else very good to have you Richard on.
What do you make it is planned first off in the aggregate.
Well I think the president's plan is makes no sense from an economic point of view.
And -- it's worse than makes no sense it's potentially very bad and as you said in your lead.
It at -- and it leads I think the way.
Two.
Although not forgiveness -- student loans which would be utterly disastrous for the American society.
Sending exactly the wrong message.
And so I think it it it -- the only justification for it is subs for short term political gains that the president.
Cities -- respect to his political supporters the the occupy -- Wall Street crowd and -- for.
Well they must love this I mean just think about it they'll return and it still rules are condos Lucy do see on this and maybe that's by design.
But.
As part of the repayment.
Qualifications.
-- their next in the old.
There's a lot of wiggle room to get out -- a lot more excuses to get out.
Period beyond just saying some -- walk away.
Potentially from their obligations explain.
-- out yet exactly.
The student loan program in my judgment has been an unmitigated disaster from the beginning.
It is an unmitigated disaster because first of all was designed originally to help -- people.
35%.
Of the people 35%.
Up people make a 100000 -- air that the where the kids make.
Both parents make a 100000 Mori here.
Are getting is guaranteed student loans from the federal government so this is not a low income program necessarily.
-- -- -- A smaller percentage -- low income kids off our graduates -- college that was true in 1970 before began so that at.
Also the programme has pushed up the price at college a lot it is increase the demand for college and is generally been a disaster however you look at my.
-- got to let us not because you know sometimes I don't know where you're coming yeah I know I know yeah you have that problem to get into that.
Know -- you know Richie you isn't about my my my in I take a slightly different view on the the value of of this whole student loan program I do worry about this of that that.
Those who do pay their bills those who do try to -- -- pay back the government for an obligation they took out when they were young.
And they wanted to make good on that and paid back on that.
-- to stop future.
Loan recipients if there -- many down the to do the same thing thereby continuing to Brent contract -- and every other law.
Absolutely.
We hear -- changing the rules -- -- -- keep changing the contract.
People are gonna say the contract doesn't mean anything else they change next year or the year after.
So I -- BS -- irresponsible is I want you have one class of people highly irresponsible people some of them.
For -- for who work hard they pay off their student loans.
Now some pick the other people aren't necessarily bad people some of do have financial difficulties but they haven't paid off their student loans why favor one group over the other.
But that's what's gonna happen here Richard -- -- -- these very if not all but a lot of they occupy Wall Street is many of whom want forgiveness of their student loans -- more flexibility.
We know that by getting them forgiven.
They were gonna go back to -- -- -- educational system -- you will love of whether this is a wise strategy to the government of evolved I see your doubts there.
But but you're gonna wipe that out for all the folks who follies simply because you couldn't and wouldn't pay back your -- Absolutely.
We have it's it's creating a horrible precedent.
For that the future it it it's gonna add to a problem.
It's as I say it's a bad program to Begin with this compounds.
The program.
Difficulties.
By making people even less responsible about -- back.
-- and -- what it these are young people these are people who are making their first contract Shalala our arrangements.
At and went -- people are told don't have to pay attention of the rules don't have to pay back 10% of your income whatever it is in a -- rate payments.
Because it might be tough for you to pay twelve or 14%.
-- sure sure -- what what kind of message -- -- -- -- young people.
What's it what's it saying about the system.
I'll -- and why would why -- why would lenders.
In the future outside of this area make close to people because maybe the government will do the same thing so how.
Alone you know -- what kind of message are you senator of other economists when you make so much to him cents.
Richard better thank you very very much good seeing -- again it was great they went.
