Morgan Carroll and MonkeyDemocrat Morgan Carroll, an ambulance chasing lawyer looking to unseat CD-6 Representative Mike Coffman next month, has yet again reminded us how out of touch she is with business and, more importantly, common sense. Appearing on an episode of The Denver Channel’s Politics Unplugged, Carroll announced that she wants to cap student loan interest rates at one percent.  Her brilliant reasoning: because that is what banks borrow at.

Carroll has obviously never loaned someone money, or she simply does not care if hard working taxpayers end up on the hook for an individual with neither the ability nor willingness to repay his student loan debt. What could be repossessed if the borrower fails to pay – nothing.  What income or ability to pay loan payments does the borrower have – nothing, or nearly nothing.  What is the track record of the borrower, such as a credit report – again, for a college student, usually nothing.

This means that there is very little assurance that the borrower will repay, and nothing that a lender can take if the borrower defaults.  And this means that statistically, many more of these types of loans will fall into default than loans made to people with better credit profiles. And this means that lenders are going to have higher costs (people defaulting) on these types of loans than in loans to people with better credit.  And this means that lenders must charge more (higher interest) on these types of loans than in loans to other, more qualified borrowers.

In short, Carroll doesn’t know what the hell she’s talking about.

Carroll is clearly uninformed about the student loan crisis that is happening in our country right now.  Currently, a staggering 40% of student loans are behind in their payments under the government-backed student loan program.  Today, student loan debt outstanding in the U.S. exceeds all credit card debt outstanding.

And she wants to add fuel to the fire by making these already-mispriced loans cheaper?  How exactly does she think this will end?

This is just another example of a career politician with zero real world experience not thinking through her policy proposals.  Or perhaps she does not have the understanding or real world experience to realize what the logical end state is.  Either way, Morgan Carroll and her reckless ideas are the last things we need in Congress today.