Dems to "fix" college loans. Uh-oh.
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As the Lambert family finds itself in the final stretch of its first foray into the financial quagmire of grants, loans, and scholarships involved with sending a child into college (Really now, who doesn't love the FAFSA form?), we often find ourselves searching the web for something on the topic.
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In the course of such research, I stumbled across an interesting and somewhat disturbing story located on one of our favorite blogsites here at the 'Grok-- GOPProgress. It detailed a little-known battle taking place behind the scenes over private sector versus government distribution and administration of federal student aid loans. And, as one might guess, because it involves fundamentally opposing world views (public vs private), it becomes a partisan issue, thus proving again that party affiliation does, in fact matter. Jess Mahone writes
One reason Republicans lost in 2006 is that they stopped being reliable stewards of the public trust. It is becoming clear, however, that the Democrats who now control Congress are much worse--whereas Republicans screwed up due to their ineptitude, the Democrats are wasting money as a matter of policy.
I don't think you'd get much of an argument from anybody on that one. He continues, giving an excellent example that proves, once again, that no matter how bad the Republicans might have been, the Democrats are worse. Writes Jess,
There are two federal student loans programs (hey, it's the federal government...) The first program, the Federal Family Education Loan Program (FFELP), is a public-private partnership between the federal government and various lending institutions. The FFELP was established under President Lyndon Johnson's Great Society initiative. Despite those origins, however, the FFELP has been a cost effective way for the federal government to help over 50 million students finance their college educations. The FFELP currently finances college loans for eighty percent of American college student.
You might be familiar with it's more common moniker, named for the biggest vendor of such loans, "Sallie-Mae."
The other program--the Federal Direct Loan Program (FDLP)--is run entirely by the government and was established in 1993 under President Bill Clinton. Loans to students under the FDLP come directly out of the treasury and interest payments go directly back in. The idea behind establishing the FDLP was to "cut out the middle man" and save the taxpayers some money.
And like many Clinton initiatives, thanks to its roots in a more socialistic policy, it has become a costly boondoggle, compared to Sallie-Mae, its free-market conterpart. Don't worry though, 'cause the new Congress is going to fix it... Unfortunately, they plan to do so by eliminating the competition. By eliminating the free market portion, that is, which Democrats have never really liked.
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Click here to read the whole sad story. What's worse, President Bush might join in with the Dems in giving the federal government total control of the college loan industry here in America.
President Bush has proposed $19 billion in cuts to his 2008 education budget. And there is a movement afoot among Democrats in Washington to use those cuts to gut the FFELP. That is to say Democrats in Washington want to commence the dismantling of the student loan program which, of the two, is more efficient, services the most students, and is lightest on the taxpayers.
Do we really want that? I agree with Jess' conclusion:
Members of the U.S. Senate Committee on Health, Education, Labor & Pensions need to hear from concerned citizens that the FFELP should be preserved and even strengthened, not dismantled in favor of a government monopoly on college loans.
