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Ending the College Loan Giveaway
NY Times ^ | June 29, 2005 | Masthead Editorial

Posted on 06/29/2005 12:05:49 AM PDT by neverdem

Forty-two members of the Republican rank and file in the House sent a powerful message to their leaders last week when they joined with Democrats and voted to close an outrageous loophole that allows lenders to skim billions of dollars from loans that should be going to needy college students.

At issue is a special category of student loans for which the government guarantees lenders a gargantuan return of 9.5 percent, even though the prevailing rate charged to students is lower than 3.5 percent. The loans, backed by tax-exempt bonds, were created in the 1980's, when interest rates were high, to keep lenders in the college loan business. Congress tried to phase out the high-interest loans in 1993, when rates declined and federal subsidies were no longer needed. But the lenders have contrived a series of bookkeeping tricks that have kept the system going, despite damning reports by the Government Accountability Office, the Congressional Budget Office and outside advocacy groups. More recently, the House Republican leadership has seemed determined to keep the gravy train running for the banking industry.

The amendment, sponsored by Representative Chris Van Hollen, Democrat of Maryland, is likely to be tied up in a rules dispute. But the Republicans who broke ranks to support the bill put leaders on notice, and set the stage for a very public battle over the issue that should begin after the July recess.

(Excerpt) Read more at nytimes.com ...


TOPICS: Crime/Corruption; Culture/Society; Editorial; Government; News/Current Events; Politics/Elections; US: District of Columbia
KEYWORDS: colleges; federalaid; loans; republicanparty; universities
The Times' Masthead Editorial gets it right once in a while, less than a broken clock. This is one of those times. But I would like to take it one better. If we need to subsidize higher education, why not limit it to students whose majors are in science or engineering. We have a plethora of left wing organizations subsidizing the arts. Let them fund undergraduate studies in the arts. Why shouldn't they be the ones funding those who need, by and large, remedial education. How much do the arts add to our gross domestic product? Our film and TV industry contributes plenty, but at an intangible cost of enraging jihadis and enriching Chicom copyright violators.

BTW, I omitted the last sentence. I think you can guess their conclusion.

1 posted on 06/29/2005 12:05:49 AM PDT by neverdem
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To: neverdem

Excellent point about the value of different degrees. We certainly get a better return on subsidizing those who are science and engineering majors. If someone wants to major in art history or women's studies, they should go to the back of the student loan line.


2 posted on 06/29/2005 12:15:45 AM PDT by DuckFan4ever (Liberals lie)
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To: neverdem
I don't want to subsidize anybody's education.
3 posted on 06/29/2005 12:15:55 AM PDT by Lancey Howard
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To: Lancey Howard

Lancy....
it's worth it. The return we get for subsidizing the education of doctors and engineers is well worth it. Those people will be able to pay a lot more in future taxes than they would as uneducated laborers.


4 posted on 06/29/2005 12:18:03 AM PDT by DuckFan4ever (Liberals lie)
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To: Lancey Howard

I don't mind investing in America's future. I like the idea of funding science and engineering majors only, although there are probably a few other majors that are of value, as well. I would probably add business-related majors to the list.

I don't believe we need to fund everyone's education, either. But I think it's important that we help those who need it, and want it.


5 posted on 06/29/2005 12:25:20 AM PDT by Quick1
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To: DuckFan4ever

I agree, I dislike a great deal of federal spending, but I think college loans are a good idea. I know a ton of people who improved their family trees with that help.


6 posted on 06/29/2005 12:33:47 AM PDT by SoDak
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To: SoDak

I am on the fence on subsidizing education. First, we built a strong middle class on doing just that after WW2 and throughout the 1960's via the GI Bill and Pell Grants. Now as the tuition keeps rising and rising, less are able to attend (even with student loans). I am looking at trying to send my son to college in 6 year--probably a $20,000 per year cost by then.

The state schools have gotten so expensive, they cost about what the private did 15 years ago.

Granted, I am saving some money for his college education via 529's, but at the same time not quite able to max out my own retirement funds (who knows if SS will even be around in 30 years?), and I still have my own student loans of approx. $15,000 left to pay off. Don't get me started on housing costs. I make under 50 a year as a registered nurse. Dh is an union electrician but has been laid off for almost half the year--no major building going on yet in the Northeast and it's almost F'ing July. We're now considering relocating which has its own large set of difficult issues. (We live in upstate NY)

The X Generation is tired of paying the bill and getting squat in return. COL increases keep going up for SS and Medicare/prescription but screw the younger generation to get an education so they can pay for it all.

My parents never managed to save for their retirement although they retired anyway. My mother isn't 65 yet and has poor health (smoker) so I basically purchase her meds when she needs me to. My father retired at 62, is now 65 and complaining he has to find a job and has health problems (smoker) as well. Dh's parents are busy filling and decorating their McMansions and taking vacations so most likely won't be able to afford retirement for another 10 years (when they most likely will have no choice). So no help coming from there for the boy in contrast to the assistance to the prior generation.

Sorry to whine but the whole situation is vastly grating to me as I always considered myself independent and fended for myself and generally opposed government taking money from one to give to another. Something has got to give.


7 posted on 06/29/2005 4:17:10 AM PDT by LuceLu (Intelligent people are always open to new ideas. In fact , they look for them. Proverbs 18:15)
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To: neverdem

The main thing that subsidies have dome it to make education much more expensive.


8 posted on 06/29/2005 7:55:23 AM PDT by Atlas Sneezed
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