Reply to WTF? Govt rewarding bad behavior Part II

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[quote=Anonymous]"As Halloween quickly approaches, millions of households are preparing to dole out handfuls of candy to kids. Coincidentally, the White House is doing the same in the hopes of courting younger voters back into President Obama's corner for the 2012 election.

In the most blatant of raw political giveaways, Obama yesterday announced a plan that would consolidate and reduce student loan debt. It would allow people who hold both direct government student loans and government-backed private loans to consolidate their debts into one single government loan.

The second part of his plan would cap repayments at a fixed level. Current rules limit the payments of college graduates to 15% of their income, with all debt forgiven after 25 years of payments, but this move will allow borrowers to pay only 10% of income, with loans forgiven after 20 years, making it easier to incur more debt and not pay it off. According to the Associated Press, the plan will affect more than 1.5 million Americans.

As a policy, this plan is troubling and simply reinforces the culture of irresponsible borrowing that led to the housing bubble. Think about it: If you can take your private loans and roll them into a public program (that is, the Federal Family Education Loan Program) and those loans are eventually forgiven, then what's the point in responsibly paying them back?"

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