"People Will Die" is Not a Principled Response to the Big, Beautiful Bill

 President Trump signed the Big, Beautiful Bill, which had something in it for nearly everybody. Democrats didn't gripe about the expanded SALT tax exemption because rich people in the blue states were the primary beneficiaries. Instead, they focused their complaints on the modest cuts to Medicare, the supplemental food program, and other governmental services.

Senator Elizabeth Warren, who cadged her way into Harvard by claiming to be a Cherokee Indian, is leading the histrionic charge, saying, "People will die" as a result of the bill's passage. 

Other Democrats have joined her in waving the bloody shirt to stir partisan rancor. Senator Bernie Sanders, a doddering old fool, claimed the bill would kill 51,000 people a year. The leftist media slyly hints that we can blame the recent Texas flood fatalities on Trump's budget cuts, a contemptible bit of propaganda worthy of Joseph Goebbels, and sleazy Senator Chuck Schumer wants a federal investigation of that outrageous allegation.

The day is fast approaching when the nation's debt--$36 trillion and growing by the hour--will pull down America's economy. The Trump administration's efforts to trim the cost of government can be legitimately criticized, but shrieking "People will die" is not a principled response. 

The Democratic Party and its co-conspirators in academia and the media are no longer interested in civil debate on national policy issues. Their aim is to sow chaos, and chaos they will likely get. 

They will be surprised, however, by Flyover Country's reaction when the Heartland has had enough. The forces that long for chaos won't like it when that chaos shows up in Silicon Valley, Martha's Vineyard, the Hamptons, and Harvard Yard.

Senator Elizabeth Warren: "People will die!"

Trump is Playing Musical Chairs With the Democrats, and He's Already Lost

Say what you like about Elon Musk; he's right about the Big, Beautiful Bill. This legislation, which was approved by Congress on a party-line vote, will increase the national debt and lead to recession.

Ignoring the nation's mountainous national debt that grows larger by the day, Trump and the Republicans approved a 1000-page bill that does nothing to balance the national budget.

Democrats unanimously opposed the bill, putting them in a position to say "We told you so" when the American economy collapses. Nevertheless, they shrilly denounced the bill's modest cuts to Medicare and the food stamp program. Senator Elizabeth Warren, growing more deranged as she ages,  repeatedly yelled "People will die" as a result of the bill's passage. 

The United States, like Ernest Hemingway, is going bankrupt, slowly at first, "then suddenly." We're in the slow stage now, and no one knows when our economy will suddenly collapse under unmanageable debt. 

However, that day is coming when no one wants to buy U.S. Treasury bonds. We don't know when our house of cards will implode, but I predict it will be during Donald Trump's presidency. 

The Democrats will smugly explain that our coming Great Depression is due entirely to Trump's economic policies, and he will be left holding the bag. Trump will take the blame for our coming economic meltdown, even though this catastrophe was decades in the making. 

Put another way, Trump and the Democrats are playing musical chairs with the economy, but Trump doesn't know that's the game he's playing. The Democrats plan to have a seat when the music stops, leaving Trump outside the circle of inside players.

That being said, I'm glad Congress passed the Big, Beautiful Bill. It does nothing to get the nation's fiscal house in order, but at least it gives some tax relief to the people who need it most--older Americans and the struggling middle class. 

In other words, people like me.

 

The Parent PLUS Student Loan Program Preys on Low-Income Families and Should Be Shut Down

When Congress finally passes the Big Beautiful Bill (BBB), it will include some changes to the Parent PLUS student loan program.  The Senate version and the House version both put a cap on the amount of money parents can borrow for their children's college education through Parent PLUS.

Currently, students' parents can borrow all the money they need to pay for their children's college education through Parent PLUS loans. The House-approved version of the BBB limits the amount parents can borrow to $50,000 total. The Senate caps the amount at $65,000 per dependent.

Three years ago, I argued in a blog essay that the Parent PLUS program is a predatory scheme that saddles low-income families with unmanageable debt. I'm reposting that essay below.

* * * 

 Years ago, I was strolling along a lakeside hiking trail in a Dallas-area park. As I was walking across a wooden bridge, I looked down to see a ball of wriggling snakes below me.

It was a big cluster--about the size of a beachball. It was a scary sight, and I didn't stick around long enough to determine whether the snakes were poisonous. I just hurried on my way.

The Department of Education's Parent PLUS program is like a big ball of snakes. The program has become so predatory, so large, and so politically charged that we don't want to even try to untangle it.  We just want to hurry along without thinking about it.

Parent PLUS is a federal program that lends money to parents to help them pay for their children's education. Although Congress supposedly intended the program to help affluent families, six out of ten parent borrowers are from low-income households.  And, as Matt Krupnick reported for Newsweek, at 140 schools, 80 percent of parent borrowers are in low-income homes.

Parent PLUS default rates are high. According to a Newsweek analysis, nearly ten percent of parents at 1000 colleges defaulted or were seriously late with payments within just two years of their child left college. At some schools, Parent PLUS default rates ran as high as 30 and even 40 percent.

And borrowing costs are high: "6.28 percent for the 2021-2022 academic year plus an upfront fee of 4.22 percent" (as reported by Newsweek).

In 2019-2020, parents took out Parent PLUS loans on behalf of three-quarters of a million students, and the loan amounts averaged about $16,000. 

But the average Parent PLUS loan at some colleges is much larger. At Spelman College, an HBCU in Atlanta, the median Parent PLUS loan was $85,000 for parents whose children graduated or left school between 2017 and 2019.

Other schools with high Parent PLUS loan amounts include New York University (almost $67,000) and Loyola Marymount in Los Angeles ($60,000). The median loan amount is also high at several art and music schools: Berklee College of Music in Boston, Pratt Institute in Brooklyn, and Savannah College of Art and Design in Georgia.

Newsweek, the Wall Street Journal, and other news media have shown that some colleges are taking advantage of their students' parents by encouraging them to take out loans in addition to the federal loans and Pell grants that students receive on their own.

This is predatory behavior. And parents who take out Parent PLUS loans will find it is almost impossible to discharge these loans in bankruptcy.

Congress needs to shut down the Parent PLUS program. Or at the very least, Congress should amend the Bankruptcy Code to allow financially distressed parents to discharge these loans in bankruptcy.

But Congress will probably take no action. It sees the Parent PLUS program as a big ball of snakes, and no politician has the guts to close down this pernicious scam against low-income parents.

Congress Might Do Away With Grad PLUS: Killing the Colleges' Cash-Cow Graduate Programs

 The U.S. House of Representatives passed President Trump's Big Beautiful Bill,  but it was tweaked a bit in the Senate. A final bill will be crafted through the reconciliation process, but it seems inevitable that Congress will scuttle Grad PLUS, an unsubsidized federal loan program with no borrowing limit.

The Senate version of the Big, Beautiful Bill caps federal loans for professional degrees (primarily law and medicine) at $200,000 and other graduate degrees at $100,000. This is a student-loan reform that is long overdue.

Once the colleges realized that there was no borrowing limit on grad-school loans, they jacked up graduate-school tuition rates and rolled out new graduate programs to lure in more suckers. MBA programs popped up like crabgrass on the campus quad, and mediocre MBA programs were often as expensive as the prestigious programs offered by Harvard and other elite schools.

Of course, the universities deny the charge that they raised tuition prices to take advantage of limitless student borrowing, but that's academic bullshit. The universities have never accepted the responsibility of keeping their costs down.

Sandy Baum, a nationally recognized student loan scholar, acknowledged that there is evidence that Grad Plus contributed to an increase in high-cost graduate degrees. Baum also admitted that the federal government's "infinite borrowing" policy is "not optimal," and has resulted in graduate students racking up hundreds of dollars in student debt to get a master's degree in fields like creative writing (as reported in Inside Higher Ed).

College leaders are alarmed at the prospect that Congress will kill the cash cows that are placidly grazing in the business schools and liberal arts departments. They claim that putting a cap on grad-school borrowing will prevent low-income students from getting medical and law degrees and other valuable post-graduate credentials.

More bullshit. There is no good reason for graduate school tuition to be as high as it is, especially for programs that don't enable their graduates to get a higher salary.

Here's one example that illustrates my point. In 2017, Inside Higher Ed published an article on the high cost of getting a master's degree in data journalism from Columbia University. According to Columbia's own estimate, a student would pay $147,000 for this degree, including $106,000 in tuition and fees. And that was seven years ago.

Is a Columbia master's degree in journalism worth the cost? Probably not. Charlie J. Johnson, an editor for the Chicago Tribune at the time, was quoted in the Inside Higher Ed article as tweeting that “[a] $100,000 master’s degree in journalism is a stupid thing.”

Suppose Congress does away with the Grad Plus loan and puts a reasonable cap on graduate student loans. In that case, it will kill the universities' cash cows--high-priced graduate degrees that are wildly overpriced and often worthless. 

However, I'm not holding my breath.  At this very moment, the higher education industry's lobbyists are creeping around Capitol Hill, smoozing our national legislators, claiming that limitless student loans for grad school must be perpetuated.  

These sleazeballs lobbyists will argue that the present gravy train must not be derailed because socioeconomically disadvantaged students desperately need a worthless graduate degree or professional degree, no matter what it costs.

I predict that the Grad PLUS program will be retired. Nevertheless, the federal student loan program will continue to underwrite wildly overpriced graduate programs that will leave graduates with mountains of student debt--debt that they cannot discharge in bankruptcy.

Will Congress Kill Cash-Cow Graduate Programs?