Romney’s Higher Education Plan: A Giveaway To The Wall Street Banks And Predatory Schools That Fund His Campaign

By Pat Garofalo/Think Progress

2012 presumptive presidential nominee Mitt Romneyreleased his higher education plan Wednesday, decrying the nation’s “education crisis.” During a speech before the U.S. Chamber of Commerce, Romney blamed President Obama for rising tuition prices and increasing student debt.

Of course, tuition increases and growing debt are a phenomenon several decades in the making. And Romney’s plan would make the problem decidedly worse in two important ways, giving federal money away to Wall Street banks and predatory for-profit colleges, two industries to which Romney has extensive ties.

First, as he’s promised before, Romney intends to divert money away from student aid — instead giving it away to banks — by repealing Obama’s student loan reforms:

Reverse President Obama’s nationalization of the student loan market and welcome private sector participation in providing information, financing, and the education itself.

President Obama did not nationalize the student loan market. (Plenty of banks still make private sector student loans.) Instead, Obama and the Democrats cut private banks out of the federal student loan program, ending billions in subsidies that were needlessly going to banks for acting as loan middlemen. The money saved went into the Pell Grant program. Romney’s plan would entail taking away Pell money in order to pay Wall Street to service federal loans.

Second, Romney would remove regulations meant to protect students from predatory for-profit colleges:

Ill-advised regulation imposed by the Obama administration, such as the so-called “Gainful Employment” rule, has made it even harder for some providers to operate, while distorting their incentives.

This rule simply states that colleges leaving too many students crippled with debt and without good jobs lose their access to federal dollars. Many for-profit schools make nearly all of their revenue from the federal government — in the form of the various streams of aid used by their students — yet have much high rates of student loan default than public schools. Only 11 percent of higher education students in the country attend for-profit schools, but they account for 26 percent of federal student loans and 44 percent of student loan defaults.

Romney is already intimately tied to the for-profit college industry. Inside Higher Ed noted that two of his advisers “have lobbied on behalf of the Apollo Group, the parent company of the University of Phoenix.” On the campaign trail, Romney has effusively praised Full Sail University, a for-profit institution. And it seems that his policy platform would be a boon to this industry which is, in many instances, extremely predatory.

Romney’s Advice To Students: Borrow Money From Your Parents

By Annie-Rose Strasser/Think Progress

If you’re young and you want to start your own business, Mitt Romney’s has some advice from you: Borrow money from your parents. At a “lecture” for students at Otterbein University in Ohio today, Mitt Romney told students that, his friend, Jimmy John, started a business by borrowing $20,000 from his parents at a low interest rate. Romney suggested anyone in the audience could do the same:

This kind of devisiveness, this attack of success, is very different than what we’ve seen in our country’s history. We’ve always encouraged young people: Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.

Watch it:

The advice fits right into the characterization that Romney is ‘out of touch’ with regular people. Most students don’t have parents with $20,000 in disposable capital sitting around to give to their kids to start a business.

At least it’s more than Romney’s surrogates had to offer young people on their youth policy conference call this week.

ANIMATION: The 400 Wealthiest Americans Could Pay Off Everyone’s Student Loans

By Jeff Spross/Think Progress

As the government moves into the final days of negotiations over the debt ceiling — negotiations most likely to be concluded by a budget deal that will do significant harm to the poor, the working class and middle class Americans throughout the country — it seemed worthwhile to revisit the bizarreness of the Republicans’ refusal to consider tax hikes on the wealthy of any sort, while the accumulation of wealth at the very top of America’s economic ladder continues to reach staggering levels.

Forbes Magazine’s annual listing of the 400 richest Americans, as well as the news that student loans in this country are likely to total $1 trillion this year, gave ThinkProgress a practical example on which to base an animated infographic. Watch it:

Cantor: Taxing The Rich Is Off The Table, But Making Students Pay More Immediately Is Fine

One of the major demands that almost all congressional Republicans have made about deficit reduction is that wealthier americans and large corporations shouldn’t have to pay any more in taxes. “The House has taken a firm position against anything having to do with increasing taxes or raising tax rates,” said House Majority Leader Eric Cantor (R-VA) at the onset of negotiations over the budget deficit in May.

By Zaid Jilani/Think Progress

Yet as the Daily Beast’s Howard Kurtz reports, one group that Cantor is apparently fine with making pay more is American college students. Cantor, at the White House for budget negotiations, apparently proposed that students who take out student loans should immediately start paying interest, rather than getting to make payments after graduation:

As Monday’s White House budget talks got down to the nitty-gritty, Eric Cantor proposed a series of spending cuts, one of them aimed squarely at college students. The House majority leader, who did most of the talking for the Republican side, said those taking out student loans should start paying interest right away, rather than being able to defer payments until after graduation. It is a big-ticket item that would save $40 billion over 10 years.

According to Kurtz, Obama rejected Cantor’s proposal out of hand, saying that he didn’t want to “screw students.” Cantor’s proposal comes at a time when American students are already overwhelmed by student loan debt. In 2008, the average debt that a college student graduated with was a whopping $23,000. American students continue to pay more than most of their developed world neighbors for a college education, and Cantor apparently wants to make it even more difficult for them while not touching the richest Americans.