WASHINGTON–(BUSINESS WIRE)–lt;a href=”https://twitter.com/hashtag/PorkerOfTheMonth?src=hash” target=”_blank”gt;#PorkerOfTheMonthlt;/agt;–Today, Citizens Against Government Waste (CAGW) named
Sen. Elizabeth Warren (D-Mass.) May 2019 Porker of the Month for
proposing a taxpayer-funded student loan bailout and “free” college.
On April 22, 2019, Sen. Warren proposed
a plan for universal free college and the cancellation of “debt for more
than 95 percent of the nearly 45 million Americans with student loan
debt.” The plan was immediately panned
by several observers. USA Today wrote that it, “flunks fiscal and
fairness tests.”
While her solution is foolish, Sen. Warren’s focus on the student loan
bubble is laudable, because it resembles the housing bubble before it
crashed in 2007-2008. According to the National
Center for Education Statistics, “the average cost of a four-year
education rose by 64 percent” over the past two decades, with the
average college cost now more than $100,000. This never-ending increase
in tuition has been caused by the artificially expanded availability of
loans, which provides no incentive to colleges and universities to keep
tuition low. The New York Federal Reserve found
that, “for every dollar in new subsidized student loans the government
offers, schools jack up the price of tuition by 60 cents.”
Sen. Warren’s plan would pour taxpayer-funded gasoline on this fiscal
inferno and accelerate the backwards incentive structure that
necessitates taking out ever-costlier loans. Worse yet, the Brookings
Institution found
that, “nearly half of the estimated $640 billion to be forgiven under
her plan would go to the top 40% of earners.”
CAGW President Tom Schatz said, “Sen. Warren needs to be reminded that
the worst way to lower the cost of something is for the government to
deem it ‘free.’ Tuition continues to rise because of the endless
availability of credit, which perversely necessitates higher loans. Sen.
Warren’s unfair and costly plan would exacerbate this crisis and push
students deeper into long-term debt.”
Citizens
Against Government Waste is a nonpartisan, nonprofit organization
dedicated to eliminating waste, fraud, abuse, and mismanagement in
government. For more than two decades, Porker of the Month is a dubious
honor given to lawmakers, government officials, and political candidates
who have shown a blatant disregard for the interests of taxpayers.
Contacts
Curtis Kalin (202) 467-5318
