A response to Obama's plan to refinance College loans (NYtimes comment)

Most of the people who are complaining about having their taxes pay for student loans went to school when college cost literally a tenth of what it cost now. That was because taxes once paid 80% of the expenses for state colleges, and now they pay only 20%. This also provided the competition that kept private schools affordable. You complainers are the real freeloaders, living off the Republican tax cuts, so that you didn't have to pay the kind of taxes the previous generation paid to make your education affordable. It's about time you coughed up your fair share to pay for the education of the next generation. This plan isn't the best way to deal the problem. What should be done is to restore the old state subsidies, so that the banks don't get a cut in the middle. But it's probably the only viable alternative at this stage in the game.

Those who claim that education loans can be paid off in a few years are being misleadingly vague. A Bachelors degree at the lowest cost institutions can be paid off in a few years. But any graduate degree requires a life time of payments, especially if the person with the degree is a teaching adjunct at a University. Renegotiating those loans would be a powerful economic stimulus that takes money out of the banks and puts it into the hands of people who will spend it, creating a powerful "trickle-up" effect to restore demand for goods.

Most importantly, It's absurd to think of refinancing loans as some unprecedented government intervention into the capitalist process. Practically everyone I know has refinanced their home loan, usually in response to a dropping of interest rates. It's also extremely common for people to renegotiate loans simply because the interest rates make it impossible for the borrower to avoid bankruptcy. The threat of bankruptcy has been eliminated by law for college loans. Obama's program simply partially restores some aspects of the renegotiating power for borrowers that exist in every other loan in this society.