Recently, using his pen and again ignoring Congress, the President signed an executive order that would cap outstanding federally-backed college loans at 10% of income. While that sounds great for graduates and not so good for the taxpayer, there's a bigger problem. Graduating college students can't find work. So, Mr. President, what's 10% of nothing?
According to a recent study, only about 17% of the 2014 graduating class actually have jobs lined up; down from 20 percent in 2013. Of those who do find work, 44% will wind up in jobs not requiring a college degree. Still, all too many will find themselves jobless and living with mom and dad.
In essence, there is a massive student loan bubble growing -- currently $1.2 trillion in existing outstanding loans -- with the potential for mass defaults seriously looming. For the President to further slow loan repayments, only exacerbates the potential of massive defaults when the bubble bursts.
The simple fact is that under Obama's iron hand of increased regulation and the implementation of ObamaCare, businesses are unable to expand and create the kind of jobs that, in the past, would have required a college degree, and, as reported by the Huffington Post about a year ago, half the jobs created in the last 3 years were low paying.
The President seems to think his constraints on loans will help garner student votes in the Fall elections. However, if I am in college, I would be more concerned about having a good paying job that would allow me to pay off my loan in a much shorter time. Simply, capping repayment at 10% is an indirect admission that college grads are being underemployed and, consequently, underpaid.
Obama extends caps on student-loan payments to 5 million people: http://www.washingtonpost.com/politics/obama-extends-caps-on-student-loan-payments-to-about-5-million-people/2014/06/09/10a6ab20-efe4-11e3-9ebc-2ee6f81ed217_story.html
Obama: Regulator Without Peer - WSJ: https://www.google.com/search?q=Regulator+Without+Peer&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&channel=sb
44% of Young College Grads Are Underemployed (and That's Good News): http://www.theatlantic.com/business/archive/2013/06/44-of-young-college-grads-are-underemployed-and-thats-good-news/277325/
Fewer college grads will have jobs lined up this year: http://nypost.com/2014/05/11/fewer-college-grads-will-have-jobs-lined-up-this-year/
Job outlook for 2014 college grads puzzling: http://www.usatoday.com/story/money/personalfinance/2014/05/18/job-outlook-2014-graduates/8809801/
Half Of All Jobs Created In The Past 3 Years Were Low-Paying: Study: http://www.huffingtonpost.com/2013/05/13/low-paying-jobs_n_3266737.html