Just in case anyone sensed an ebb in the tide of government intrusion into private markets, the House of Representatives recently voted to keep Americans under water. Amid the hysteria surrounding health care reform, the passage of H.R. 3221, an education bill marked by a government takeover of the student lending industry, went largely unnoticed.
According to the Democrats on the House Committee on Education and Labor, the Student Aid and Fiscal Responsibility Act of 2009, as it is ironically titled, intends to “make historic investments in our economic future by improving early education opportunities and making college dramatically more affordable – and all at no cost to taxpayers”. If it were proper protocol to fill the rest of my allotted space with a repeating “bahahaha,” you could stop reading now. But bear with me; it gets better.
When President Obama’s plan goes into effect on July 1, 2010, the government’s market share in student lending will increase from 20 percent to 80 percent.
Once readers wade through all the liberal-speak, it becomes clear that not only is the economic claim as ludicrous as it sounds, butmore importantly, this bill is no gift to American students. Rather, as Chester E. Finn, Jr., Senior Fellow at the Stanford University Hoover Institute, is quoted in Forbes, it is a “bureaucratic hodgepodge.”
Perhaps the bill’s most troubling aspect from a student’s perspective is its proposed reform to the student lending industry. And, as we have come to expect from this administration, for “reform,” read, “takeover.” H.R. 3221 eliminates the Federal Family Education Loan (FFEL) program, under which loans were made to students by private lenders and guaranteed by the U.S. government. It will be replaced by direct lending from the federal government. According to the Wall Street Journal Opinion section, which calls it President Obama’s “other trillion-dollar plan,” the government’s market share will increase from 20 percent to 80 percent when the plan goes into effect July 1, 2010.
While Democrats argue that eliminating private lenders and loaning directly to students will allow them to save $87 billion, which will be applied to reducing the deficit or increasing federal student aid, the Wall Street Journal points out that, “in a remarkable letter to Senator Judd Gregg, CBO Director Douglas Elmendorf admits that government accounting is bogus.”
“You wind up losing competition, you wind up losing choice, you wind up losing value-added service,” when the government becomes the sole provider of loans, said David Mohning, Executive Director of Vanderbilt’s Office of Student Financial Aid and Undergraduate Scholarships.
Notwithstanding the incredible burden it levels on taxpayers, which the Wall Street Journal estimates at $100 billion per year, the bill has been met with a cool reception by many in higher education. The Wall Street Journal reported that a group of three-dozen college administrators, including one representing the University of Notre Dame, signed a letter to Congress expressing their reservations about the legislation.
Vanderbilt communicated its own concerns through its Office of Federal Relations in Washington, D.C. David Mohning, Executive Director of Vanderbilt’s Office of Student Financial Aid and Undergraduate Scholarships, is skeptical of the wisdom of such large-scale government involvement.
“That’s a very significant increase in volume and activity, processing, and everything that goes into the program that I’m not convinced the government is capable of handling,” he said.
While Mohning noted that the short-term effects on students may be minimal, he also points out that, over time, consumers stand to lose when the government becomes the sole provider of student loans. “You wind up losing competition, you wind up losing choice, you wind up losing value-added service.” Apparently the Division of Motor Vehicles does not inspire confidence in the government’s ability to provide customer service.
The House voted 253 to 171 to enact the legislation, almost entirely along party lines. If the bill passes the Senate, Washington bureaucrats can add student lending to an already crowded pocket of industries they control.
Before assuming that the bill intends to enlighten ignorant children the nation over, only to be opposed by tight-fisted Republican curmudgeons, it is helpful to note that it serves powerful Washington lobbies more than students in genuine need.
Nowhere is this clearer than in its green schools provision, which requires 50 percent of the funds allocated for public school modernization in the 2010 fiscal year, and 75 percent in 2011, meet environmental standards, including LEED rating.
Furthermore, it establishes an “Advisory Council on Green, High-Performing Public School Facilities” (read: green czar). When faced with children in genuine need of educational opportunities, this bill identifies sustainable building as a priority.
So the next time you hear liberals bemoaning the lack of education in this country, remember that while they do care about the children, apparently they care about the trees more. But as long as taxpayers are footing the bill, they can have both.
Patrick McBride is a freshman at Vanderbilt University. He can be reached at patrick.j.mcbride@vanderbilt.edu.
Tags: barack obama, green schools, H.R. 3221, student lending
