It seems Washington can’t print money fast enough to fund their big government programs.
And it looks like Obamacare is going to be further supported on the backs of the healthiest segment of our population — young Americans.
The Affordable Care Act is set to cost students enrolled in the government’s loan program $8.7 billion in extra interest over the next decade, according to a report published by the non-partisan Congressional Budget Office (CBO).
If savings were kept inside the loan program, instead of transferred to Obamacare, as some Republican senators are suggesting, they could allow the Department of Education to lower student interest rates to 5.3 percent from 6.3 percent, according to the CBO.
The nearly $9 billion being used to fund Obamacare is derived from $61 billion the government says it will save by administering student loans in-house.
Late last month former secretary of education and ranking member of the Senate Committee on Health, Education, Labor and Pensions Lamar Alexander (R-Tenn.) seized on the diversion of the funds as one solution for lowering student interest rates, which are set to double on Monday.
“The Congressional Budget Office estimates that if we applied that $61 billion savings to student loans, we could have reduced the interest rates to about 5.3 percent and save the average student $2,200 over 10 years,” said Alexander, speaking from the Senate floor.
Under the current plan, which was brokered during last minute negotiations over Obamacare in 2010, $39 billion of those savings will go towards Pell Grants, $10 billion towards deficit reduction and $9 billion towards funding the health care law. The remainder will be used for administrative and other purposes.
Speaking from the floor, Alexander said he believed all of the savings derived from efficient handling of the student loan program ought to be applied towards lowering interest rates for students.
“That $61 billion ought to go to the students who are getting the loans,” he said. “That is my view. That is our view.”
But, in the same exchange, Sen. Tom Harkin (D-Iowa), who is chairman of the Senate Committee on Health, Education, Labor and Pensions, suggested Republicans alternative motive was to defund President Obama’s landmark healthcare legislation.
“I will be honest about this,” he said, speaking to Alexander on May 8. “$9.2 billion went to other health care programs, including requiring dependent coverage in the health care bill.”
“I just have to ask a question,” he said “[A]re we having a health care debate here or an education debate? I thought we were talking about education. We are talking about whether student loan interest rates on subsidized Stafford loans are going to double on July 1. Now it has morphed into some kind of big health care debate.
CBO: Feds siphoning billions from student loan program to fund Obamacare (Campus Reform)