(CNSNews.com) - White House Deputy Press Secretary Josh Earnest said at the White House briefing on Tuesday that President Barack Obama believes America needs “to fundamentally rethink and reshape” its higher education system and the he will be going on a bus tour on Thursday and Friday to make some proposals Earnest said “are not going to be popular with everybody.”
After noting that average college tuition costs have risen dramatically in recent decades, Earnest said: “So what the President believes that we need to do is we need to fundamentally rethink and reshape the college--the higher education system, and we need to find a way to build on innovation.
“So the president on this bus tour will lay out some fundamental reforms that would bring real change to the way that we pay for college education in this country,” said Earnest.
“Now, the proposals that the president is going to lay out are not going to be popular with everybody, but they are going to be in the best interest of middle-class families,” he said. “And the president is looking forward to having that discussion over the course of Thursday and Friday in addition riding on a bus.”
In 2010, when Congress passed Obamacare, language buried in the Health Care and Education Reconciliation Act, one of the two bills comprising the health-care reform plan, terminated the federal government’s program that guaranteed student loans made by private lenders, leaving just the Federal Direct Student Loan (DL) program.
"Under the DL program, the federal government essentially serves as the banker--it provides the loans to students and their families using federal capital (i.e., funds from the U.S. Treasury), and it owns the loans,” the Congressional Research Service later explained.
At the end of March 2010, the month Obama signed Obamacare and gave the Treasury a monopoly over federally guaranteed student loans, the outstanding balance on federal direct student loans was $169.526 billion, according to the Monthly Treasury Statement for that month. At the end of July 2013, the outstanding balance was $618.508 billion.
Since Obama signed the Obamacare law, the outstanding balance on direct student loans—money students and former students owe to the taxpayers—has increased by 265 percent.