Fox Figures Erroneously Label Obama's Executive Action To Protect Student Borrowers A "Bailout"
NY Times: President Obama Signed An Executive Order To "Help Students Deal With The Growing Burden Of College Loans." The New York Times wrote on March 10 that Obama signed an executive order that morning called the "Student Aid Bill of Rights" to "help students deal with the growing burden of college loans." The article continued:
With the memorandum, Mr. Obama directed federal agencies to take steps to make it easier for college students to finance their education, pay back their loans and avoid being taken advantage of by unscrupulous lenders.
The order directs the secretary of education to develop a "state of the art complaint and feedback system" that would allow students to easily file grievances about the federal financial aid process.
Mr. Obama's directive would also require federal agencies involved in the distribution of student aid to enhance consumer protections and information disclosure during the financial aid process. And it would create a new task force to monitor student loan performance and trends in borrowing. [The New York Times, 3/10/15]
Fox's Neil Cavuto Refers To Obama's Action As A "Bailout," Asking "Where Is The Bill Of Rights For The Rest Of Us Who Have No Choice But To Pay?" On the March 10 edition of Fox News' Your World with Neil Cavuto, host Cavuto decried the student aid plan as a "bailout" multiple times, lamenting the lack of a bill of rights for "those who have no choice but to pay" (emphasis added):
CAVUTO: Finally, who doesn't like free stuff? Kids being offered free community college sure do. Just like stressed-out homeowners given mortgage rescue sure do, and auto companies on the brink of bankruptcy given bailouts sure do, or banks or solar companies or anyone else who got in deep and now wants Uncle Sam to dig them out. It is human nature to grab at something free as long as you're not the human paying for it, someone else is. It's like this whole Student Aid Bill of Rights thing. Who is paying the bill for their bill? Who is paying back the loans they won't, making good on the obligations they're not? That's what happens with bailouts. Pretty soon, you're bailing everybody out and leaving fewer to complain. After all, who are the bailed out to rip those getting bailed out, because we've had a lot of bailouts, right?
That's why I find it kind of funny when a lot of my Wall Street friends complain. Who got more money than banks? The problem is nothing comes free. Free college sounds good, just like helping underwater homeowners feels good, but it costs a good deal of money. These rescues that never seem to rescue, these bailouts that themselves often need bailing out. You would think by now we would figure it out, that the bill for all of these rights is looking more than the right scary, and the folks who can pay more than a right too few. Yet the demands just keep on coming. Egged on by politicians who kind of act like the guy in the bar who shouts "Drinks on the house!" then he up and walks out the bar, leaving it up to others to figure out how to strategically invest money they do not have. On drinks they always know will leave the house broke. It rings hollow. Forget a bill of rights for those who say they can't pay. Where is the bill of rights for the rest of us who have no choice but to pay? [Fox News, Your World with Neil Cavuto, 3/10/15]
Fox News Radio Host: "A Student Debt Bailout?" Fox News Radio host Tom Sullivan posted the headline, "A Student Debt Bailout? President Obama Proposes Change In Bankruptcy Law!!" to his website on March 11. [Fox News Radio, 3/11/15]
But The Plan Requires A Review Of Bankruptcy Laws, Not A Bailout
Wall Street Journal: Plan "Direct[s] Administration Officials To Study" Bankruptcy Law As It Pertains To Student Loans. The Wall Street Journal wrote on March 10 that Obama's executive action requires officials to review "whether to expand bankruptcy options for 'all student loan borrowers,'" noting that one official said the review would "likely focus" on loans from private lenders:
President Barack Obama on Tuesday directed administration officials to study whether to expand bankruptcy options for "all student loan borrowers." An administration official said the bankruptcy review would likely focus on whether to expand bankruptcy options for borrowers with student loans made by private lenders--such as SLM Corp.'s Sallie Mae and Wells Fargo & Co.--that aren't backed by the government.
Private loans make up about 10% of all student loans, with the remaining 90% made by the federal government.
Any bankruptcy-law changes would have to be approved by the Republican-controlled Congress, which has broadly opposed the president's agenda. [The Wall Street Journal, 3/10/15]
Atlanta Journal-Constitution: Plan Requires Lenders To Help Students Understand Repayment Options. In a piece covering the president's speech on his plan, the Atlanta Journal-Constitution wrote that "[t]he plan also requires third-party lenders to better inform students of repayment options," in addition to the "creation of a centralized complaint system." [Atlanta Journal-Constitution, 3/11/15]
The Washington Post: Plan Aims To Review Whether To Treat Student Debt Like Other Forms Of Debt. The Washington Post's Post Politics blog went into further detail about the action Obama signed on Tuesday, noting the different regulations for student debt versus other types of debt, like mortgage and credit card:
The memorandum ordered administration officials to study whether changes to bankruptcy laws would be needed. Student loans cannot currently be discharged in bankruptcy, but other types of debt, including mortgages and credit card balances, can be wiped out. Obama also called for officials to review whether changes to statues and regulations are needed when it comes to flexible repayment options for all borrowers. They will also review whether mortgage and credit card protections can be applied to people with student loan debt. [The Washington Post, Post Politics Blog, 3/10/15]
And Experts Agree That Borrowers Need The Protections In This Plan
The Institute For College Access And Success: Borrowers "Urgently Need" Components of This Plan. Independent, nonprofit The Institute for College Access and Success (TICAS) released a statement on March 10 commending the president's commitments to taking steps that "borrowers urgently need," including a centralized system for complaints and "fairer and more consistent treatment":
"Today's Presidential Memorandum takes many steps that we have advocated for and that borrowers urgently need, including a coordinated system for accepting, tracking, and reporting complaints, a single portal for borrowers to manage their federal loan accounts, fairer and more consistent treatment for borrowers in bankruptcy, elimination of the need for borrowers in income-driven repayment plans to submit annual income information that the government already has, and regular public reporting of more comprehensive loan data." [TICAS, 3/10/15]
Consumers Union: Obama's Proposed Reforms Are Important To Keep Those With Student Debt In "Good Standing." Consumers Union Staff Attorney Suzanne Martindale said in a March 10 statement that Obama's plan includes "really important steps" to keep student borrowers in "good standing:
"For too long, student loan servicers have provided inconsistent or misleading information, muddying up a system that's already hard for students to navigate. These reforms are really important steps toward keep borrowers in good standing on their loans, so they're making affordable payments instead of sliding toward default." [Consumers Union, 3/10/15]
Fox News Has A History Of Downplaying The Student Debt Crisis
Fox Hosts Have Previously Promoted Various Myths About The Reality Of The Student Debt Crisis. Multiple Fox News figures have promoted conservative myths about the more than $1 trillion student loan debt held in the U.S., including the idea that students can just find cheaper colleges, that student loans drive up college costs, and that student loan forgiveness is a taxpayer-funded bailout. [Media Matters, 4/25/14]