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Barack Obama  |
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Rob Kailey is a working schmuck with no ties or affiliations to any governmental or political organizations, save those of sympathy.
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Sun Mar 01, 2009 at 17:46:36 PM MST
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| Something funny happened on the way to privatization. Rather than saving taxpayers much money, in a range of programs, we simply wedded the worst of government (unresponsive monopoly) to the worst of the private sector (excessive profit) without getting the best of the private sector (meaningful competition) or of government (meaningful political accountability).
Student loans is one area where that happened. Many loans currently processed are federally guaranteed, but handled through for-profit companies like Sallie Mae. The fact that the loans are backed by the feds means that taxpayers shoulder all the risk, but private companies rake in fees for, well, not much.
The Obama Administration proposed moving the federal student loan system to one entirely handled through direct loans, which cut out the middle-man. Here's the Republican response: But there's already been pushback from Republicans. Rep. Howard P. "Buck" McKeon (Calif.), ranking Republican on the House Education Committee, lashed out against the proposed shift, calling it a "government takeover of the private-sector-based student loan program, taking away options and benefits from students while adding tens of billions" of dollars to the deficit. Somehow, loans guaranteed by the federal government are "private-sector-based." That's a laughable claim. There is a private market for student loans. This does nothing to impact that. It just makes the public market an actual public market. That's a good thing. Now if only we could do this with Medicare Advantage (something, I should note, that both Max Baucus and Barack Obama have voiced support for already). |
| Matt Singer :: White House Looks to Save Students, Taxpayer Money; Republican Freaks Out |
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