Government Takeover Of Students Loans Will Add $52 Billion To Deficit

How can student loans and Obamacare have anything in common?  Socialist Barack Hussein Obama signed into law the student loan takeover by the federal government as part of Obamacare.  This was another backdoor intrusion into Americans freedom and the free enterprise system.

The non-partisan Congressional Budget Office (CBO) reported the student loan program could add $52 billion to the deficit between 2010 and 2020 when the cost of the market risks and administrative expenses of the loans are taken into consideration.

“CBO recently estimated that whereas loans issued in the direct loan program between 2010 and 2020 would reduce the deficit by a total of $68 billion under FCRA accounting, those loans would increase the deficit by $52 billion on a fair value basis,” reads the March 2010 CBO study, Policy Options for Federal Student Loan Programs.( See p. IX of the Summary.)

The CBO report further notes that it explained its calculations about the budgetary impact of the administration's plan to change the federal student loan programs and the $52-billion addition to the deficit in a March 15 letter sent to Sen. Judd Gregg (R-N.H.), the ranking member of the Senate Budget Committee.

In the study, the CBO explains how the accounting mandated through the Federal Credit Reform Act (FCRA) is the standard procedure used to record the budgetary costs of the government’s direct and guaranteed loan programs.

 However, the CBO notes that FCRA cost estimates exclude the value of “market risks” and the loan programs’ “administrative expenses” while the CBO’s  “fair value” estimates takes them into account.

There were no problems with the student loan program.  The socialist Democrats added this to Obamacare to gain more control of Americans and our Universities.  How long will it be before the socialist attempt to dictate what universities teach and what students can major in?  Will the government tell some young Americans you can’t go to college but you can go to trade school?

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