Gingrich: Obama's student loan plan is a ‘Ponzi scheme’
October 27th, 2011
09:46 PM ET
2 years ago

Gingrich: Obama's student loan plan is a ‘Ponzi scheme’

(CNN) - At an education forum in New York Thursday, GOP presidential hopeful Newt Gingrich called President Barack Obama's new student-loan proposal a "Ponzi scheme."

Part of Obama's plan would expedite a law that would forgive outstanding student loans after 25 years of payments. The current law is set to take effect for loans starting in 2014, but Obama wants to move it up to 2012 and change the number of payment years to 20, instead.

Gingrich, however, called for the privatization of the student-loan program, arguing the president's plan would bankrupt the country "by promising to every young person, 'You won't have to pay off your student loan as a student.'"

He said the plan appeals to students now, but by the time they will "have to pay off the national debt" as taxpayers when they're older, Obama will be long gone.

"It's a Ponzi scheme even by Gov. Perry's standards," Gingrich said, also making a quip referring to Texas Gov. Rick Perry, who's repeatedly described Social Security as a Ponzi scheme.

Gingrich wasn't the only candidate to take shots at Obama while appearing at the education forum, hosted by the College Board and News Corporation. The event featured four presidential candidates, all of whom called for a drastically smaller role of the federal government in education.

Minnesota Rep. Michele Bachmann blasted the president's plan as one that would lead to a "bubble" in higher education.

"I think that individuals need to be responsible for repaying their student loan debt," she said.

Also see:

Perry may pass on debates

Gingrich builds staff in New Hampshire

Bachmann files to run in New Hampshire


Filed under: Education • Newt Gingrich • President Obama
soundoff (16 Responses)
  1. Derek Wain

    Bachmann is the most principled and gutsy political figure in the race. Obama's forgiveness of mortgage and school loan debt is undisguised income and wealth redistribution: "from each according to his means; to each according to his need." Obama is a socialist who got control of the world's largest free market economy and is destroying it bit by bit.

    October 27, 2011 10:08 pm at 10:08 pm |
  2. Mike In Carolina

    Newt has redefined the meaning of Ponzi Scheme in a desparate attempt to criticize the President's proposal. My question to him would be whether he has any ideas about helping students who find themselves in deep debt without employment. I was taught never to criticize and idea unless I could offer a better one.

    October 27, 2011 10:34 pm at 10:34 pm |
  3. jerry

    yes...anyone who can think would agree...another vote purchase by the great divider.

    October 27, 2011 10:47 pm at 10:47 pm |
  4. azmary

    Wow, heaven forbid we actually might have more students going to college. They may even be able to earn a decent living, and be more than pool boys for the top 1%. Why are these Republican candidates so anti-education? Right now times are tough for college graduates, but over the long haul people with a college education are more likely to keep jobs and earn more money. That translates into more taxes into the federal coffers, and more skilled scientists and engineers to help solve some of our energy and transportation problems. As far as paying back their loans, I am sure the vast majority will, especially as the economy recovers and they find work. These candidates have to stop acting like anyone with a college education is an irresponsible, money grubbing citizen.

    October 27, 2011 10:47 pm at 10:47 pm |
  5. skarphace

    How would Obama's plan make it so that students don't have to repay their student loan debts? Do the math. even paying just the minimum required payment, you will pay the balance off well before 25 years of payments are made.

    This 'ponzi scheme' argument is being applied way too liberally. That's right. I called Republicans liberal.

    October 27, 2011 11:25 pm at 11:25 pm |
  6. Larry L

    I believe the agreement needs to stand as agreed upon by the person who borrowed the money. If the United States needs to create universities to provide high-level education to individuals beyond the elite class created by the Republicans that is a seperate issue. We should pay for the agreed upon schedule.

    October 27, 2011 11:26 pm at 11:26 pm |
  7. TechDan

    I don't think Gingrich understands how a Ponzi scheme actually works.

    October 28, 2011 12:45 am at 12:45 am |
  8. CJ

    Honestly, tuition for colleges all over the nation is rising, and Mr. Gingrich calls for a privatization of the federal student loan program? Think about it. Higher interest rates and more restrictions. If he gets the GOP nomination (which I severely doubt he will even come close), he doesn't have my vote.

    October 28, 2011 01:08 am at 1:08 am |
  9. rickirs

    Gringrich's whole campagne is a ponzi scheme, in the context of Perry's definition. He makes you think he's presenting something of substance but its all smoke.

    October 28, 2011 02:32 am at 2:32 am |
  10. NATHAN WIMBERLY

    More talking points. He'll call it a bail out soon

    October 28, 2011 05:26 am at 5:26 am |
  11. PA_outofwork

    The Obama's student loan plan is the next bail out waiting to happen, we the taxpayer will be stuck with the bill.

    October 28, 2011 07:12 am at 7:12 am |
  12. Michael MN

    Every GOP plan is a Ponzi sheme – give to the rich in hopes you get tinkled on

    October 28, 2011 07:24 am at 7:24 am |
  13. Wire Palladin, S. F.

    The flat tax, 999, and tax cuts for the wealthy are ponzi schemes. If it was a matter of 'paying back' the debt they incur, you really need to look at tax cuts for the wealthy, tax breaks for big oil, the big bank bailout, bailing out Wall Street, as the true ponzi schemes Each day these republican morons are trying to find something that will make them significant, and each day they fail.

    October 28, 2011 07:57 am at 7:57 am |
  14. Ed - Rochester, NY

    We should subsidize big oil to the tune of billions but subsidizing education is a socialist ponzi scheme. GOP priorities astound me.

    October 28, 2011 08:52 am at 8:52 am |
  15. lgny

    I've always liked the line from the Ten Commandments:
    "The strong do much work.
    The weak do little.
    The dead do no work."

    We have a generation of students graduating from college saddled with massive debt right at the time when they should be starting their careers, starting families, investing in homes. The loan revisions is a start toward relieving this burden.

    Long term, we need to look at how to get college costs under control.

    October 28, 2011 08:56 am at 8:56 am |
  16. Rudy NYC

    PA_outofwork wrote:
    The Obama's student loan plan is the next bail out waiting to happen, we the taxpayer will be stuck with the bill.
    -----------
    Prediction: If Republicans win the White House in 2012, along with holding onto the House and winning a majority in the Senate, we will see another major bailout of the financial industry before the end of that Republican president's first term.

    October 28, 2011 08:58 am at 8:58 am |