Obama's Income-Based Repayment Plan

Fox 5's Melanie Alnwick did a story on Obama's Income Based Repayment Plan yesterday in which I offered some comments:

There is also an interesting argument going on -- that college tuition is experiencing a bubble, much like we saw in housing. The more loans that are available, the more money students have to spend. That, the theory goes, leads colleges to raise tuition and buy for all sorts of things that don't go directly to education.

"It's comparable to rearranging the furniture on the Titanic," says Daniel Bennett of the Center for College Affordability. "It makes it look nicer but it doesn't take care of the problem."

Bennett agrees with President Obama's statement that colleges need to do their part to bring down cost.

The video from the story is above, which includes sound bites from The CATO Institute's Adam Schaefer, who espoused that:

When you look at wages and benefits compared to the equivalent job in the private sector, they're doing far better with much greater job security

"Not everyone is going to go to college, not everyone is going to gain anything from going to college, and there's no reason we should have a regressive tax on plumbers and tradespeople that didn't go to college to fund other people's education

The latter part of Schaefer's comments are relevant to career colleges, which prepare many of their students for vocational careers in the private sector. This means that Obama's IBR Plan would not be as beneficial to in that it offers elimination of debt for public sector employees after 10 years of repayment. Meanwhile, tradesmen will be left subsidizing the public sector employee's compensation and their education. This is the type of policy that is very discriminatory in that it favors one group of people over another.