Friday, April 13, 2012

Rep. Virginia Foxx On People With Student Loans: ‘I Have Very Little Tolerance’ For Them

Rep. Foxx has "little tolerance" for people with loans. Apparently there is NO excuse for people who have loans. No excuse whatsoever! Foxx went to school and didn't spend a dime on it, and, you know, things are EXACTLY THE SAME NOW as they were when she went to school.

She's a bully who promotes aggressive free market policies.

Read the piece here.


Anonymous said...

In general, I support free market policies. The reason? Whatever its flaws, the market, with appropriate limitations, allocates resources better than the state.

But people like Virginia Foxx have it all wrong. The student loan market, and accordingly academia, has nothing to do with free markets. It is the worst form of crony capitalism and big government run amok. The easy availability of credit on legislatively blessed terms and conditions that would make a loan shark blush is the problem. Severely limit the availability of that credit, and make the loans reasonable from a consumer protection standpoint (discharge in bankruptcy), and academia must then deal with reality and lower its cost structure. The cost of education has risen orders and orders of magnitude since 1970 (inflation adjusted), even though given significant technological advances education should have been cheaper, not more expensive.

And Rep. Foxx is out to lunch. Yes, it might bother me a bit if loans were made dischargeable in bankruptcy? I worked for three years between undergrad (went on athletic scholarship, hardly an avenue for most people) and a top ranked law school so I would not have any debt. But really, how much can I be perturbed? The labor market was different then. and so was the cost structure. And my personal feelings are irrelevant anyway, just as Rep. Foxx's should be.

We are facing a generation of people who will live in misery, will not marry, have kids, buy houses, buy cars, or fulfill their potential. I can be smug about my own choices and good fortune, but guess what? I will be negatively impacted by this phenomena. I cannot be smug, or lack empathy. The misfortune of so many is and will damage our economy, and have a definite impact on our productivity. This affects us all.

The only real answer to me is to change the bankruptcy laws. Yes, there may be a reasonable amount left not susceptible to discharge (i.e., $5-10,000 dollars for each year of education, along with the undoing of the loan shark terms, such as the addition of accrued compound interest to the principal). I don't think anything else will work, and while it might create a moral hazards problem, heck, the individual debtor has to go through bankruptcy to get relief. It would not be cost or pain free.

I have zero confidence that any forgiveness program created by the Government or politicians will work. Look at the useless, and I mean useless, mortgage modification programs the Obama administration has put out, believing that with Big Government they can just wonk their way through the problems. But only structural change can solve the student loan problems. Amend the bankruptcy laws and unwind the virtually criminal loan terms.

Yes, I can hear it now. Limit loan amounts and only the rich can go to school. That might be a bit of a problem in the short run. But I can envision no other way to incentivize the schools to lower costs. And I find it ironic that academia, bound up in a progressive and liberal echo chamber like no other, has reached a bloated and comfortable status off of wealth transfers from either poor or middle class people - just the people their politics deign to protect. Yeah, right, with friends like this who needs enemies?

And I don't understand the animus towards for profit schools. Yes, their practices are likely worse to a degree than the non-profit schools, but really, almost all of the schools save for a few of the wealthiest benefit from most unconscionable form of financing arrangements, ranking right up there with subprime mortgages.

Cheers. We sure could use some.

Nando said...

What a pig. The bad thing is that these clueless morons and corporate shills are running the show - on behalf of the owners.

Hell, Willard Romney comes from a wealthy family. His father was governor of Michigan, and a former auto executive. The "man" has business and law degrees from Harvard. He did not incur one dime in student debt! He likewise does not have any tolerance for student debtors. (Then again, the swine apparently "earned" $21 million last year - and paid a tax rate of about 15 percent.)

JD Painter said...

@ 1:40AM

Agreed. I think you have pretty much summed it all up.

Maybe more people would have been able to do like Ms. Perfect, Virgina Foxx, and work and pay ther way through higher ed for the past 2 or 3 decades, had not big government interference and lending caused the tuition costs to go sky high.

Ironically, and as you indicate, it does seem that the liberal lending policies have paradoxically ended up benefitting liberals greatly, while at the same time harming the students they thought they were going to be helping via student loans.

Still though, my vote is for Obama in 2012, because I don't hear much talk from conservatives/republicans on the issues, if at all.

So if it is the liberal's mess, let the liberals fix it. Or at least give em' a chance?

It is all so confusing in any event.

Maxwell said...

This is how much it cost her: she went to school for seven years, at inflation adjusted would be $46,100.

Now it's $21,000 for one year. About three times higher to attend school now at her school, also wages were higher then too.