Posted on 05/09/2007 6:27:07 AM PDT by .cnI redruM
If populists like John Edwards and Pat Buchanan gave a Tinker’s D—n about the poor working people in America, they would condemn our government’s student loan programs from on high. New York State Attorney General Andrew Cuomo has done his home state proud by ripping the lid off of the high-binders and grafters who pocket the taxpayer-funded swag, in manners aberrant to the current legal restrictions. What he doesn’t get after with any skill at all is fundamental dishonesty of government-subsidized overcharging.
Financial aid officers at Columbia University colluded with corporations associated with the university to steal large sums of money, on unethical stock transactions. In return for this, they threw these companies more loans. Cuomo did exactly what he should have done. He threw the book at them with condign prosecutorial malice and will take a well-earned victory lap in front of The House Education Committee.
The bad news consists of what Cuomo won’t throw anyone in jail for. Cuomo cannot lock up a bunch of malefactors who engage in moral turpitude that enjoys legal sanction. There won’t be any investigation of the fact that colleges and universities enhance their tuitions and thereby their bank accounts at a rate far above the underlying rate of inflation faced by producers and consumers in the US economy.
The loans and grants that were intended to give the common man a leg up are paying for the tuitions of the young and very privileged. In fact, almost 1/3 of the students whose parents earn six-figure salaries enjoy the benefits of financial aid. Weren’t those dollars intended for the other America?
The colleges and universities have incentives to behave badly. They receive cash up front, every time the amount of aid gets raised. It follows as no shocker that tuition increases normally follow aid increases. Neal McCluskey, a Cato Institute policy analyst, points out the extent to which these high-minded centers of learning get down and wallow in the political money troughs.
“According to the Center for Responsive Politics, education interests spent over $80 million lobbying federal policymakers last year.”
And how has this investment of political capital paid off? McCluskey elucidates.
“From 1996 to 2006, the College Board reports, the average, inflation-adjusted, per-pupil cost of tuition, fees, room and board rose 28 percent at four-year private schools and 38 percent at four-year public ones. Meanwhile, inflation-adjusted aid provided through federal programs rose 95 percent, from $48.3 billion to $94.4 billion.”
The lobbyists average a return on investment of 5,763%, assuming the $80 million is a constant expenditure, over the last ten years. Thus, it doesn’t come as a surprise that a lot of student aid goes to people who have a moral obligation to give to charity, not partake. Some of the families receiving student aid should be offering the less fortunate a hand up, not bilking the middle class taxpayer for a handout.
Unlike the corruption unearthed by Andrew Cuomo, no one will do a day of time in jail. It will only be encouraged to rage on unabated. Our citizens believe they have voted themselves rich, at someone else’s expense.
A college degree-holder will earn, on average $1 million over the course of their career. A debt-holder leaving Old-Ivy $30,000 in debt, will only need to pay roughly 9% of their annual salary to amortize the loan in twenty years. This assumes a moderately benign interest rate, so that the borrower pays about $60,000 total over the 20 years.
Thus, working class families get taxed to send upper middle class and wealthy families through college on aid packages. With this flagrant example of one America sticking it hard to the other, I can’t help but wonder where Lou Dobbs and Senator Sherrod Brown have been hiding on this one.
But no, our champions of the common man never stand tall on an issue that where they have to climb athwart the sound-bite demagogues. If it can’t be explained in a 20-second blurb, none of our modern Magister Plebes will touch it. We have to save America’s working classes. Who else will we tax when we want someone else to pay our college tuitions?
This “redistribution of wealth” thing is trickier than I thought. But ... as they like to say ... we’ll get it right next time!
Well, there is always ROTC...!
He steals from the poor
And gives to the rich
Stupid Bitch!
So they’re torqued because when they pay back a loan over 20 years there’s interest, and you spend more than if you had not taken out the loan? Is that what this is about?
But the "working class" families barely pay any income taxes anyway. The bottom 50% in the country pay about 3% of the income taxes. If anything, this is wealth redistribution from the upper and upper middle class back to themselves.
No. I read that he’s torqued that tax dollars bilked from the middle class subsidize education for the wealthy at Ivy League schools. He’s pointing out that although tuitions are rising beyond the rate of inflation, tax-payer subsidies increased three-fold over them.
What he doesn’t mention is that the tax-payer subsidies are the significant reason for the tuition increases. As more “free” money invades the system, the institutions are less constrained by the market in their pricing.
It’s a good rant... but misses some basic economic points.
but misses some basic economic points”
Exactly!! This is what happens when you have more money chasing fewer services...
I thought President Bush was on to something (encouraging more local 2 year colleges) but no one is listening.
Higher education has been overbuilt since WWII. Ward Churchill and his case are a perfect example of waste in a system awash in too much money.
The biggest way the rich steal from the poor and middle class is by importing vast numbers of illegal immigrants to depress wages.
The dirty secret of student loans is that just like in housing, easy and low cost money helps to boost prices. In this case “prices” are the tuition and fees that colleges can levy knowing that the student doesn’t have to pay right away, but Uncle Sam does.
Agitating for easier student loans, with lower rates of interest and higher credit limits is just another way of agitating for a higher subsidy by the federal government.
The folks who work this system are horribly cynical and they get to enjoy it coming from many directions. They appear to only want to be helping poor students. They get more money. They get to lay the burden of repaying on both the future graduates (or dropouts, who cares about them?), or the taxpayers. And they get to beat up Bush if he even hints he will spill the beans about this scam. Best of all, they don’t have to contain costs, let alone increase productivity.
What a gravy train!
“If populists like John Edwards and Pat Buchanan gave a Tinker’s D—n about the poor working people in America, they would condemn our government’s student loan programs from on high. “
Their ‘populism’ continues to ring hollow. the one thing both have in common is they ‘know’ they are smarter than everybody else, they are absolutely convinced of it.
Which is why neither will ever gain enough support from ‘we the people’ to win a national election cycle.
Buchanan’s highwater mark was in 1992, he’s lost support since then as we can see in each successive election cycle.
Edwards was so lame he knew better than to run for reelection in his home state for Senator.
..and it’s all for the children. How special!
>>>>I thought President Bush was on to something (encouraging ...) but no one is listening.
I felt that way about Social Security.
We could eliminate the student loan program tomorrow and there would still be a large enough pool of high skill level workers from other countries to keep America’s businesses going.
why post this socialist drivel on Freerpublic? This is more DU’s style
Doubtful. Student loans are “long shot bets” in the same way that public education is something of a long shot bet.
This stuff only matters if you think America should stay ahead of the curve in innovation. And it is a matter of debate how important or even possible that position is.
Need new engineers? India’s got’em and so does China.
Stem Cell research banned altogether? Doesn’t matter, China, Japan and Europe will do it.
It really is a global market now and there’s a huge pool of highly skilled people. This pool will continue to grow regardless of whether America comtributes to it or not.
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