President Obama's Student Loan Rate Proposal Saves Average Borrower 25¢ Per Day

    Reprising the Don't Double My Rate theme used during the 2012 presidential campaign, the White House is pushing a plan by President Obama this week to prevent interest rates on some student loans from doubling effective July 1.  However, the savings for most borrowers is rather less significant than might appear at first glance.  The White House uses the example of an incoming freshman who will save $4,000 under the president's plan:

If Congress fails to act, college will be further out of reach for millions of students and families.  In fact, an incoming freshman who borrows $27,000 over the next four years -- a typical debt incurred by today’s college graduates – is projected to pay over $4,000 dollars more over the life of their loans without the President’s proposal.

    However, the chart included with the plan shows that the average savings for student loan borrowers is actually $1,126.  Despite tweets from the White House that seem to suggest the savings are annual ("Last year, President Obama helped students save an average of $1,000 on their college loans"), the footnote to the chart explains that the savings assumes the borrower "repays the loans over the expected period of 12 years."  A savings of $1,126 over twelve years is $94 per year, or about 25¢ a day.


Note: This article first appeared at The Weekly Standard.

Note: Here's a post from last year's Don't Double My Rate campaign when the Obama administration used the same playbook, and Congress eventually signed on.

The Food Police

    For most of us, our daily contact with the federal Department of Agriculture (USDA) begins with our bleary eyes absentmindedly scanning the side panel of our cereal box in the morning as we struggle to get our minds in gear for the day.  The familiar Nutrition Facts information panel fulfills the USDA requirements to inform consumers about how good or bad our bowl of Chocolate Covered Sugar Honey Froot Puffs is for us.  Later in the day, we might have a steak that is "USDA Choice".  (For you vegetarians, I don't know if tufo gets a nod from the USDA, but let's face it, "Choice Tofu" would be an oxymoron.)  And at some point in our growing up, we were introduced to the Four Food Groups which morphed into the relatively short-lived and overly complex Food Pyramid which is now morphing into the Food Plate.  The common element in the above examples is food - it's the Department of Agriculture after all.
    So imagine my surprise when reading this recent article on the construction of a police station in Fruitland, Maryland, and who should pop up but the USDA.

For Fruitland Police Department, 'excitement is building' about new facility

 FRUITLAND -- For years, the city's police department had worked in a facility that was not only was limited in space, but also outside of compliance due to its age and condition.  Within the next two months, those issues will be addressed as the department is scheduled to move into its new public safety building... The building, which is being constructed by Mervin L. Blades & Sons, costs approximately $2.6 million and was funded through a low-interest, 40-year loan from the U.S. Department of Agriculture.

My search through the rest of the article for the common element of "food" (noted above) came up empty unless you count "fruit" in the name of the town, but that seemed like a stretch even for the government. (By the way, it's pronounced "frootlind", not "fruit land"; the natives will mock you if you choose the latter.)  Anyway, I visited the USDA website for clues.  It turns out the USDA has all kinds of money to loan under the heading of Rural Development.  The upshot seems to be rural = farming; therefore, in addition to inspecting food going to market, the USDA is now loaning money to build police stations in "rural" America.  Not much of a leap, eh?
    So what is next?  Loan advice from the Justice Department?  What's that?  "Comparison Shopping for a Home Equity Loan" on the Justice.gov website?  Sorry, bad example.  OK, then, what's next?  Recipes from Housing and Urban Development?  What?  "Heart Healthy Home Cooking - African American Style" on HUD's website?  OK, another bad example.  Perhaps we just need to face the fact that our federal government has become a sprawling mass of overlapping and interconnected programs that bear little resemblance to what was envisioned for a country of "limited government."  I have nothing against the town of Fruitland.  But that the funds to build its local police station are coming from a department of the federal government that is ostensibly all about food is rather hard to swallow.