Bachmann: Obama’s student loan plan an ‘abuse of power’
By Brian Bakst October 28, 2011 12:38AM
DENVER, CO - OCTOBER 26: A college student holds up a t-shirt reading "bail out schools, not banks," after U.S. President Barack Obama spoke at the University of Colorado Denver campus on October 26, 2011 in Denver, Colorado. The President launched a new plan to lower the cost of paying back student loans. The plan, to be implemented by executive order, will allow former university students to cap their loan payments at 10 percent of their discretionary income starting in 2012. It would also forgive the balance of student loans after 20 years of payments. (Photo by John Moore/Getty Images)
Updated: October 28, 2011 1:02AM
ST. PAUL, Minn. — Republican presidential candidate Michele Bachmann criticized a directive by President Barack Obama to ease student loan debt as an “abuse of power” that will give people incentive to dodge debt.
The candidates reacted Thursday to a decision Obama announced a day earlier to cap required payments for some college loan borrowers at a lower percentage of their income and forgive payments for others after 20 years. He used executive authority to accelerate a law that wasn’t supposed to go into effect until 2014.
“I believe it is abuse of power from the executive to impose via an executive order a wholesale change in the student loan,” Bachmann, a Minnesota congresswoman, said during an education forum in New York put on by The College Board and News Corp.
Appearing by satellite from Minneapolis where she was hosting a fund-raiser later Thursday, Bachmann said that the loan breaks could push costs onto other taxpayers.
Bachmann said the change creates a “moral hazard” when it comes to student debt.
“There is a morality in keeping our financial promises, and I don’t think we should push that off onto the taxpayer,” she said. “The individual needs to repay and be responsible for repaying their student loan debt.”
Another GOP candidate, former House Speaker Newt Gingrich, also took a dim view of Obama’s action, calling it a “Ponzi scheme.”