Two weeks ago, President Barack Obama spoke to students at the University of Colorado-Denver. The president acknowledged students’ concerns over looming college debt and their fears of post-graduation unemployment. After 15 minutes of buildup, the solution — drum roll, please — is a government bailout. The folks at UC-Denver did their best to act surprised.

Obama’s new plan, called ‘pay as you earn,’ will lower monthly student loan payments for ‘more than 1.6 million student borrowers’ by activating prior approved legislation two years ahead of schedule. This will be done via executive order. Starting in 2012, this plan will lower the cap on monthly student loan payments from 15 percent to 10 percent of discretionary income and allow debt forgiveness after 20 years instead of 25.

But wait, there’s more. Student borrowers will have the option to consolidate their loans with a 0.5 percent interest rate reduction because, according to whitehouse.gov, separate payments make students more likely to default. Is our government implying college graduates are not responsible enough to regularly fill out two different checks?

During the speech at UC-Denver, Obama also mentioned his stalled jobs bill and cast the Republicans as villains for not ‘asking those who have done the best in our society … to just do a little bit more.’ Here’s the breakdown of the spending bill: 40 percent of the bill increases public sector spending, and the other 60 percent steepens the progressive nature of federal taxation. The bill is no more than a $447 billion rehash of the 2009 stimulus, with all costs placed on the dime of millionaires — in the form of a 5.6 percent surtax on their incomes. There is nothing villainous about refusing to be generous with other peoples’ money. Yet the audience growled at the mere mention of Republicans.

Admittedly, the United States is still in the midst of a recession. Just ask any one of the several economic advisers who quit Obama’s administration. Nevertheless, our situation calls neither for tax hikes on the rich nor a continuing series of handouts.

Obama’s new ‘pay as you earn’ plan does not address the actual problem of rising college costs because it only offloads this cost onto taxpayers. Total college cost is on a trend that steadily outpaces median income, according to College Board and The Institute for College Access and Success. Assuming this trend continues, for graduates of every following year, 10 percent of discretionary income over 20 years will amount to a shrinking share of total college loan cost paid by students, and as a result, the government (meaning taxpayers) will assume the remaining share of student debt, which will grow with each successive graduation year.

The recipe for a robust economic future in America does not include increasing peoples’ sense of entitlement. When Obama goes to a college campus and tells students he is going to write off part of what they agreed to pay, the virtue of self-reliance is struck a blow. A society of college graduates working hard to clear their own debt will outpace the world faster than ones waiting with open palms.

Michael Stikkel is sophomore computer engineering major. His column appears occasionally. He can be reached at mcstikke@syr.edu. 

Published on November 13, 2011 at 12:00 pm