Mike the Mad Biologist

A Good Thing That Came from Healthcare Reform: A Student Loan Public Option

Posted by Mike on March 24, 2010
(6)
More »

One of the weird things (of many) about using the reconciliation process is that it can only be used once per session. So when the Democrats passed Romneycare, they also had to deal with getting student loan reform past conservative obstruction. From The Washington Post (italics mine):

The student aid initiative, which House Democrats attached to their final amendments to the health-care bill, would overhaul the student loan industry, eliminating a $60 billion program that supports private student loans with federal subsidies and replacing it with government lending to students. The House amendments will now go to the Senate.

By ending the subsidies and effectively eliminating the middleman, the student loan bill would generate $61 billion in savings over 10 years, according to the nonpartisan Congressional Budget Office.

Most of those savings, $36 billion, would go to Pell grants, funding an era of steady and predictable increases in the massive but underfunded federal aid program for needy students. Smaller portions would go toward reducing the deficit and to various Democratic priorities, including community colleges, historically black colleges and universities, and caps on loan payments.

The bill’s greatest impact would fall on the more than 6 million students who rely on Pell grants to finance their education. Pell, launched in 1973, once covered more than two-thirds of total costs at a public university. It now covers about one-third.

The student aid measure was initially framed as a boost to the Pell program. Now it is seen as its salvation. Democratic leaders say that without a massive infusion of cash, the maximum grant could be scaled back by more than half to $2,150 and at least 500,000 students could be dropped from the program.

Think of this as a public option–you can apply directly to the government for a college loan. Of course, if the federal government were to play the role of healthcare insurer….TEH SOCIALISMZ!!

(6)
More »

Comments

  1. #1 JohnV
    March 24, 2010

    A reactionary acquaintence of mine commented that eliminating federal subsidies of private loans was “an important part of socialism is controlling who gets educated”.

    The dumbassery of his statement is compounded by him, predictably, being one of those people who rails about how colleges are nothing but “liberal elite brainwashing facilities”.

    It was all I could do to walk way.

  2. #2 katydid13
    March 24, 2010

    In addition to the fact that it will save lots of money, it seems to be that direct loans have better customer serivice than some of my friends seem to get with private, federally backed loans. Consolidating my direct loans was painless, since they were never sold managing and paying them was painless, and I never had problems getting the right tax forms. Other people without direct loans seemed to have more customer service programs.

    This would have seemed like a no brainer, but I believe it’s been kicking around for almost 20 years now. I know it came up in a deficit reduction simulation, I did as an undergrad, back when George H. W. Bush was president.

  3. #3 Art
    March 24, 2010

    Student loans were like paying someone else to screw the hooker. It’s twice as expensive, and not half as much fun, as doing it yourself.

  4. #4 Paul Murray
    March 24, 2010

    A student-loan-public-option-attached-to-the-health-bill? Frack! Whatever happened to governments unashamedly ponying up for the education of the best and brightest because it’s a wise investment in a country’s future?

  5. #5 mike
    March 25, 2010

    ‘ A reactionary acquaintence of mine commented that eliminating federal subsidies of private loans was “an important part of socialism is controlling who gets educated”.

    The dumbassery of his statement is compounded by him, predictably, being one of those people who rails about how colleges are nothing but “liberal elite brainwashing facilities”. ‘

    What is the contradiction here? Don’t worry, I’m not expecting an intelligible response from someone who uses words like “dumbassery”.

    Anyway, it’s pretty obvious that we have way too many people going to university and most of them either study useless subjects like sociology or art history or just don’t study much of anything at all. Maybe if we stopped flushing billions into these federal programs then students would get the message that university is a place to learn something that will help you contribute to society, not a place to dick around and be an adolescent for four more years before becoming a paper-shuffling corporate/government bureaucrat. It seems like as a nation we’ve unquestioningly accepted the assumption that more years in school = more/better education and we don’t bother to look at what/if the students are actually learning anything worthwhile.

    As a side note, I think the root cause of this phenomenon is that middle class parents as a whole all want their believe their children are “special”, and sending them off to college allows the parents to pretend for another four years that little Johnny or Janey is going to become a doctor or a famous playwright rather than (at best) an Assistant to the Regional Manager at some node of a corporate/government hive.

  6. #6 student aid
    April 21, 2010

    this is the great posting it’s pretty obvious that we have way too many people going to university and most of them either study useless subjects like sociology or art history or just don’t study much of anything at all. Maybe if we stopped flushing billions into these federal programs then students would get the message that university is a place to learn something that will help you contribute to society thanks