The Democrats laid a student loan trap five years ago, and it's set to snap shut on the Republicans. Speaker Pelosi set it up so the interest rate would double right before the 2012 election (increasing from 3.4% to 6.8%), unless congress stepped in to stop it. A great pre-planned election year trick.
It's a win-win for Obama: If the GOP votes to save students from this democrat-manufactured crisis, Obama and the Pelosicrats are victorious heroes, just in time for the 2012 campaign season. If the GOP prevails in stopping this free money handout to the already morbidly engorged higher education industry, they will be painted as cruel ogres, and the yapping chorus of howling leftwing demagogues will provide background music for the Obama "Are You Insane 2012" campaign.
So what can the GOP do? If they had any strategery, they would put Big Education on trial for extortion and indict Big Government as a chiseling co-conspirator.
Put Big Ed on Trial
House Republicans can call a hearing on the state of education in this country. They should subpoena college presidents and put them on trial, demanding to know why Big Ed is gouging the American consumer.
Congressmen could indignantly ask why universities are using taxpayer money to build gold-plated facilities and line their own pockets, even as their prices rise four times faster than the overall rate of inflation?
How is it that we spend more and more on higher education, yet fall further and further behind in Science, Technology, Engineering and Math performance?
They should ask these academics and their big-government enablers what right students and their parents have to dip into the pockets of others to pay their bills.
Government Money is Stupid Money
Government money is stupid money. And in the case of higher education, it has fueled outrageous price increases. Here's a thought experiment. Imagine the federal government ended all college financial aid programs. Would colleges just dry up and go away? Or would they adjust their prices to compete for customers?
The federal subsidy of student loans artificially lowers the price presented to the consumer, but picks her pocket all the same because it is funded with everybody's tax money. It is a peanut butter spread of money to all colleges, allowing them to all race to see who can blow it the fastest offering amenities to attract more students, whose parents complain to congress that the price of college is too high, giving Democrats another chance to blow more money to "fix" a self-created problem. This is what is known as a self-licking ice cream cone.
As a bonus, Republicans can highlight the phony baloney accounting tricks the Obama administration is employing to fool taxpayers into thinking the Treasury made a profit on the bailouts. It is an election year ploy based upon creative circular accounting between the Fed and Treasury and pie-in-the-sky projections that have no historical precedent. It is progressivism in a nutshell.