Schiff, the author, broker and Republican candidate for U.S. Senate, doesn’t think the student loan overhaul signed by President Obama today is a good idea.
The legislation, which was included in the health care reconcilliation package, essentially eliminates commercial banks from the student loan business, a move that proponents say will save taxpayers $68 billion over the next 10 years.
Schiff disagrees. “Obama’s ‘solution’ to this government created problem will only make it worse,” he said in a statement.
“Loaning directly to students while reducing the amount a student is required to repay will actually encourage colleges and universities to increase tuitions even faster, as students will be more willing to assume larger debts which they are not legally required to repay.
“Not only will this bill cause tuitions to rise faster, but contrary to Obama’s claim, it will substantially increase the cost to taxpayers who will be forced to pick up a much larger share of inflated tuitions and absorb bigger losses on defaulted loans.”