Bill Would End U.S. Subsidy For Lenders of College Aid

Washington Post ^ | September 17, 2009 | Nick Anderson

[Hawk720]

The federal government would end its four-decade practice of subsidizing private lenders that make college loans under a bill the House took up Wednesday that would steer tens of billions of dollars in savings to student aid over the next decade.

Republicans and the lending industry say the bill would engineer a risky shift in higher-education finance that could prove costly to taxpayers and diminish quality of service to borrowers. But Democrats and the Obama administration say the government could save an estimated $80 billion by ending a subsidy system that they contend benefits banks rather than students.

Democrats, in the majority, predicted easy passage on a largely party-line vote Thursday for a bill that also promotes various education initiatives from preschool to college. Hurdles may emerge when the Democratic-led Senate takes up its version in the fall. Some senators have raised concerns about the magnitude of the proposed shift in federal lending programs that would occur next summer, affecting thousands of colleges and universities. But President Obama considers the legislation key to his education agenda, and education experts predict a student loan bill eventually will clear Congress.

Terry W. Hartle, senior vice president of the American Council on Education, which represents about 2,000 public and private colleges, universities and related organizations, called the bill "the biggest redesign in the structure of federal student aid that I have ever seen. . . . Many, many students will benefit from it."

[CatoRenasci]

The whole purpose of this is to make all college students permanently dependent on the government:

1. the government will be the sole provider of college loans, which are increasingly necessary even for the middle class as tuition prices continue to outpace inflation.

2. college loans cannot be discharged in bankruptcy, meaning they follow you forever if you can't pay, and they continue to grow into a mountain of debt -- debt slavery, anyone?

3. But, there's hope - if you work for the government or in certain government approved programs, your loans will be forgiven, in whole or in part.

Just kinda makes vast numbers of young people who want to go to college, and recent college graduates, thoroughly dependent on the government, forever!

Thank God both of my children are debt-free after graduating from college!

[concerned about politics]

But Democrats and the Obama administration say the government could save an estimated $80 billion by ending a subsidy system that they contend benefits banks rather than students.

Save money? Oboma wants to turn the loan system into another mega massive welfare program like Universal Dealth Care. Is there anything he hasn't talked about taking over? Who's going to pay for all these new massive welfare programs?

Kids are going to stop going to college. They'll learn trades instead. Why forfeit your life to a communist politician when there's another option?

Go Galt.

[concerned about politics]

But President Obama considers the legislation key to his education agenda

Stay away from our kids, Oboma. Contrary to popular left wing belief, they're not properties of the state.

[Wolfie]

Why should private lenders be subsidized by our tax dollars? As for Federal loans, cut those too...it’s just a giveaway to colleges who happily jack up their tuitions because the money is so available.

[nascarnation]

College prices have risen to stunning levels based on the wide availability of student loans. Basically the whole program is a subsidy to professors and administrators.

So now we get a generation of graduates massively indebted for their college, but not better educated, and facing huge taxes to pay for Social Security, Medicare, and the fedgov.

[Eric in the Ozarks]

The purpose of this legislation is to create a lending bureaucracy at the Dept of Education. Thousands of clerks, processors and related bozos with important, high paying positions based, probably, in Alexandria, VA.

[RebelTXRose]

Since WHEN does the government do anything EFFICIENTLY?

[concerned about politics]

Americans don't want to be community organized. They want to remain free.
Just say "no" to the control freaks in Washington.

What we need is a complete Washington D.C. overhaul. Now THAT would be an excellent cost saver! That would save the American people TRILLIANS!

[Buckeye McFrog]

Another power grab...someday when 1/3 of the population is fretting about how to pay off their student loans, and the Democrats are running down in the polls a month before election day, they will pull a “loan forgiveness” scheme out of the hat to put themselves over the top.