Why is paying $6 billion to save a few kids $10 a month a good idea?

[Quantum Windbag]

This is why I hate bipartisanship consensus. Everyone in DC is telling me letting the student loan rates go from 3.4% to 6.8% will be a disaster, but who will it be a disaster for, exactly?

It turns out that the people who most likely will be hurt by it are politicians.

The 6.8 percent rate – private loans for students cost about 12 percent – was itself the result of a federal subsidy. And students have no collateral that can be repossessed in case they default, which 23 percent of those receiving the loans in question do. The maximum loan for third- and fourth-year students is $5,500 a year. The payment difference between 3.4 percent and 6.8 percent is less than $10 a month, so the “problem” involves less than 30 cents a day.Unsurprisingly, Obama has used this loan issue as an occasion to talk about himself, remembering the “mountain of debt” he and Michelle had when, armed with four Ivy League degrees (he from Columbia, she from Princeton, both from Harvard law), they graduated into the American elite. The Atlantic’s Conor Friedersdorf says that if Washington is feeling flush enough to spend another $60 billion on education in a decade, it could find more deserving people to subsidize than a privileged minority of college students who are acquiring credentials strongly correlated with higher-than-average future earnings.
The average annual income of high school graduates with no college is $41,288; for college graduates with just a bachelor’s degree it is $71,552. So the one-year difference ($30,264) is more than the average total indebtedness of the two-thirds of students who borrow ($25,250). Taxpayers, most of whom are not college graduates, will pay $6 billion a year to make it slightly easier for some fortunate students to acquire college degrees.
Between now and July, the two parties will pretend that it is a matter of high principle how the government should pretend to “pay for” the $6 billion while borrowing $1 trillion this year. But bipartisanship will have been served by putting another entitlement on a path to immortality.

Student loans subsidize privileged | Cincinnati.com | cincinnati.com