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Mitt Romney lives in a world where parents always provide financial support to their children. Those of us who live in the real world understand that being able to afford college is often a struggle. Mitt Romney doesn't get that, and today the Obama campaign released a new ad that demonstrates how out of touch Mitt Romney is on paying for education.


Voiceover: "Mitt Romney on how to pay for college and start a business..."

Mitt Romney: "Take a risk, get the education, borrow money if you have to from your parents'"

Voiceover: "Hope they can afford it."

"Romney's plans could cut college aid for nearly ten million students and eliminate the tax deduction for college tuition."

"President Obama eliminated bank middlemen from college loans... and used the savings to double college grants."

Mitt Romney: "Take a risk, get the education, borrow money if you have to from your parents."

Voiceover: "Get real, Mitt."

On July 11 Rachel Maddow dedicated a segment of The Rachel Maddow Show to explaining the scam that used to be College Education loans, which President Obama put a stop to in 2010. In the segment Rachel points to a long article from The Boston Globe which clarifies how out of touch Mitt Romney is on college tuition. "Want to know what the Mitt Romney proposal is on college costs? They would like to please bring back the old system." As one education expert put it,
On this issue, Romney is just ridiculous. His campaign staff doesn't have any new ideas so they said let's just go back to what we were doing before the Obama Administration came into place.
The Romney plan on a lot of things is to go back to the way we did things before President Obama took office. That's why it was such a brilliant idea to use FORWARD as the Obama campaign's theme this year, because if there ever was a choice between bringing us forward, or taking us backwards, this is the year voters have that choice.

Here is the transcript and video of Rachel's segment last month, explaining just how stupid the old system was. At the end she introduces an interview with James Carville in the next segment, but so far I haven't been able to easily find the interview piece. I'll keep looking, but in the meantime, if you didn't understand the bank scam that used to be in place before the Obama Administration took over, then Rachel does a fantastic job filling that education gap.

Here is a really, really, really stupid policy that we had for decades in this country about a really important subject. Whether you like the goal of this policy or you hate the goal of this policy, the issue here is this was just a really, really stupid way to try to do it.

Best Scam EverHere's what it looked like. See if you can identify the stupidity here. The federal government wanted to give loans to students to help them pay to go to college. That's the big bag of money here. We gave out that money for the students by giving the money to the banks. The government said to the banks, you loan money to students and we promise that you will get the money back. Even if the students don't pay you back, we will cover it. That is guaranteed. So then the banks, not the government, loaned out the money to the students, but there was no risk to the banks at all. The government guaranteed that they would get paid back.

So the government put up the money for your loan, and when you as a student paid it back, the bank got to keep the interest that you paid them, unless you defaulted and didn't pay, in which case the bank got paid anyway. The government paid them for that, too. It was the best scam ever. Seriously, that makes me want to be a bank. If corporations are people, right, that's the corporation I want to be. The bank gets paid no matter what for providing nothing. The government is providing a loan. The bank is just being given a guaranteed profit at no risk to pretend like it's their loan, when it's not. It's not their money, it's not their risk, they just get paid to be there for no reason. What a freaking scam.

Best Scam EverWe wasted tens of billions of dollars every decade doing it this way for a long time. Just shoveling taxpayer money to the banks for nothing, for doing nothing. That's how we did it for decades. Until we stopped doing that. We stopped doing that in 2010. President Obama changed the law in 2010. He got rid of this inane system where the banks were a pointless middleman, saving the taxpayers $60 billion over a decade. The majority of that money saved, they put into direct aid to students to pay for college, just Pell Grants, no middleman. It's better for everybody, better for taxpayers, better for students, better for everybody, but the banks.

Want to know what the Mitt Romney proposal is on college costs? They would like to please bring back the old system. The Boston Globe did a long piece on Mr. Romney's proposal this week, talking to education experts about it [see Mitt Romney’s student loan plan criticized, The Boston Globe, July 9, 2012]. Even the right wing education experts they could find to talk to about it said it was ridiculous. Literally, that is a quote from one education expert who said he's a Republican voter who is likely to vote for Mr. Romney for other reasons. But quote, On this issue, Romney is just ridiculous. His campaign staff doesn't have any new ideas so they said let's just go back to what we were doing before the Obama Administration came into place. Quoting the same expert, What's in it for students or taxpayers? Nothing. Another conservative education expert at the Cato Institute said that Mitt Romney's plan would offer no help to students, but quote, Obviously, it would have an effect for banks and lenders who would be happy to go back to that. It was a great gig for them.

If big national elections in America were fought on the basis of who was looking out for the middle class, who was looking out for the American dream of getting ahead by working hard, the American dream that you can get a college education if you are smart enough and you work hard enough. If big national elections in America turned on issues like that, this dumb student loan thing would be Exhibit A in every contrast story about what the candidates are offering. It is not. At least it's not yet, but James Carville, the political strategist who got Bill Clinton elected president, has a plan, and things like the these stupidity of the old student loan system figure prominently in the plan. James Carville joins us for the interview right here next.

To learn more about President Obama's platform on Education, visit his Education Page. The Obama-Biden Truth Team is also out with a new ad today hitting Romney back on the welfare lies he's been telling. I transcribed that ad in another diary: New Obama Video to Romney Lies on Welfare Claims: "Mr. Romney ... take your own advice."

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