The Next Government Takeover: Student Loans

[Garcia Bronco]

The Next Government Takeover: Student Loans
by Matt Lewis

There has been much speculation that today’s Massachusetts Senate race is a referendum on health care. That may be an understatement. My guess is that this senate race could have even larger repercussions.

During an appearance on “Fox News Sunday,” this past week, Senate Minority Leader Mitch McConnell put it well when he said that President Obama’s plan to bring about “change” to America wasn’t merely limited to health care. As McConnell noted,

“This arrogant attempt to have the government take over one-sixth of the economy on the heels of running banks, insurance companies, car companies, taking over the student loan business, doubling the national debt in five, tripling in 10. You’ve got … sort of widespread public revulsion.”

Indeed, health care is not all that hangs in the balance. A September Wall Street Journal columnoutlined President Obama’s next move (presumably, after passing health care): A $100 billion a year government takeover of school loans.

Obama’s allies already pushed the bill through the House, and it now resides in Sen. Tom Harkin’s Senate Health, Education, Labor and Pensions (HELP) Committee, where hearings are soon to be scheduled.

What is more, a Scott Brown victory, which would deprive Democrats of a filibuster-proof majority, may still not be enough to deter the liberals from passing it.

Harkin has threatened to “fast track” the legislation by using the reconciliation process, a maneuver which would allow Democrats to pass a bill with a simple majority (as opposed to 60 votes).

Still, while a Scott Brown victory wouldn’t mathematically eliminate the possibility of a student loan takeover, it would greatly deter liberal Senators from pushing for yet another unpopular big government grab – especially via the controversial method of reconciliation.

Regardless, should Harkin and Obama succeed, all private lenders would be excluded from making government-guaranteed student loans. There will be no government-guaranteed loan option for students other than federal loans (and, as the Journal notes, “The remaining 20% of the market that is now completely private will likely shrink further as lenders try to comply with regulations Congress created last year.”)

Democrats claim the bill would save millions, but they fail to mention it will cost jobs — tens of thousands of private sector jobs — (as if we could stand to lose jobs right now). Aside from that, the bill would obviously transfer even more control from the private sector to the government.

It’s also worth pointing out that this move contradicts previous statements made by both President Obama and Senator Harkin. For example, during his September 9, 2009 speech to Congress, President Obama said, “My guiding principle is and always has been that consumers do better when there is choice and competition. That’s how the market works.”

Likewise, during a July MSNBC appearance regarding the public option, Senator Harkin said, “The one thing, I think, the people understand that we have to have is, we have to have choice and competition.”

The question, of course, is whether or not all this talk about “choice” and “competition” is just talk.

Most likely, the threat of electoral defeat will have a greater impact on whether or Senators support this bill than the need for rhetorical consistency. As such, it’s fair to say that Scott Brown’s campaign transcends even the health care debate – his victory on Tuesday could dramatically impact Obama’s entire effort to “transform” the American system. It would send a message loud and clear.
http://biggovernment.com/2010/01/19/the-next-government-takeover-student-loans/

[gyldenlove]

“This arrogant attempt to have the government take over one-sixth of the economy on the heels of running banks, insurance companies, car companies,

Someone had to take over, private industry proved beyond any doubt that they could manage. I love how these people still believe that the market will solve everything just after they needed the government to bail their asses out of the problems THEY created for themselves - morons.

[Hizaki]

This is a very good subject you brought up Garcia. I will respond with a video that explains how government programs and guaranteed student loans drive up tuition in the US. It is a very good video to listen to if you have about 10 minutes of free time. It discusses the subject much better than I could ever put into words.

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[cutthemdown]

Someone had to take over, private industry proved beyond any doubt that they could manage. I love how these people still believe that the market will solve everything just after they needed the government to bail their asses out of the problems THEY created for themselves - morons.

You solve through regulation not govt takeover. Obama is going to be sorry he took this socialist route. People in America won't stand for govt running everything.

[Garcia Bronco]

Someone had to take over, private industry proved beyond any doubt that they could manage. I love how these people still believe that the market will solve everything just after they needed the government to bail their asses out of the problems THEY created for themselves - morons.

You don't bail them out. You let them fail. Better business will rise in it's place. It's not instant either, but damn if it isn't right or fair.

[cutthemdown]

You don't bail them out. You let them fail. Better business will rise in it's place. It's not instant either, but damn if it isn't right or fair.

Besides we have banktruptcy for companies that are savable.

[Garcia Bronco]

This is a very good subject you brought up Garcia. I will respond with a video that explains how government programs and guaranteed student loans drive up tuition in the US. It is a very good video to listen to if you have about 10 minutes of free time. It discusses the subject much better than I could ever put into words.

<object width="560" height="340"><param name="movie" value="http://www.youtube.com/v/AIcfMMVcYZg&hl=en_US&fs=1&rel=0&color1=0x234900&color2=0x4e9e00"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/AIcfMMVcYZg&hl=en_US&fs=1&rel=0&color1=0x234900&color2=0x4e9e00" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="560" height="340"></embed></object>

I'll check him out when I get home. I am pretty sure I know what he's going to say and he's right. Bottom line...it fixes the market.

[The Lone Bolt]

You don't bail them out. You let them fail. Better business will rise in it's place. It's not instant either, but damn if it isn't right or fair.

Well if it didn't mean the collapse of the entire economy (as many experts have argued) you might have a point. But over the last couple of years we've had no other reasonable options.

Remember, TARP began under the bush admin, so pegging the bailout on Obama is disingenuous.

[Bob]

Someone had to take over, private industry proved beyond any doubt that they could manage. I love how these people still believe that the market will solve everything just after they needed the government to bail their asses out of the problems THEY created for themselves - morons.

Your level of trust without evidence of trustworthiness is astounding -- if you trust this admin -- how about the last one? If you dont trust the last admin, why would you give powers that can be extended & abused by the next one?

[Hizaki]

Well if it didn't mean the collapse of the entire economy (as many experts have argued) you might have a point. But over the last couple of years we've had no other reasonable options.

Those two sentences are nothing else but media hype. The many experts were either talking heads or economists well indoctrinated in Keynesian economics, both spouting propaganda. Why is this so hard to understand?
The first sentence has some truth to it. If we would have let all the institutions and businesses fail and just bit the bullet we would have had to endure some very difficult times. But that is the point. We have to have a recession / depression after decades of indulgence, borrowing and reckless spending. There is absolutely no way around it. The bailouts just delayed the inevitable. All it does is it gives the economy some boost until the next election. It’s a political move.

The second sentence is just false. We have another way, and that is the direction we should have taken. It is the way of being fiscally conservative, cutting back on the size of government and ending our endless wars. Of course no spineless politician in their right mind would steer us that way, because it would be greatly unpopular. We, Americans, are spoiled and want everything on a silver platter. Of course I am generalizing and there are exceptions to this, but it’s true for the majority. We have grown accustomed to our lavish lifestyles, our borrowing and spending and don’t want to give it up. It’s understandable, but it has to happen.

Think of the US economy as a heavy heroin user. We keep shooting up, shooting up, partying and just being careless. As long as we keep getting our fix we are fine, reality does not have to set it. But at one point you either quit – which will be very painful and filled with suffering – or you overdose and die. Every time you shoot up again, it will make it more difficult to quit and we will have a longer rehab period. That is essentially what the bailouts are to the economy: a quick fix, that will make us all feel better for the time being.

[Pseudofool]

Universities are strapped for cash. Tuition increases has more to do with lack of revenue and pulled gov't funding than anything else.

[cutthemdown]

Universities are strapped for cash. Tuition increases has more to do with lack of revenue and pulled gov't funding than anything else.

It's simple really charge more for the schooling. If the money isn't there then you have to get it from students. If some then can't go to school that is something we will have to deal with. We can't keep making money out of thin air though. It's not Dems fault though. Repubs are too blame even more because they are supposed to be the ones who keep spending under control.

We have to stop the bleeding, the govt is broke.

[barryr]

Whenever it seems government funds something, there is always problems with it. As some have pointed out, you don't bail out companies that fail or are failing. There are ones right there ready to take their place, but not if get taxed to death, which is a common problem too.

More schooling is great, but more schooling for what job? You'll see people needing a college degree to just deliver pizzas since the jobs are scarce and so far, I don't see much interest or speed in our president to change that.

Again, the economy can not truly come back until more people have jobs. Healthcare isn't going to do it.

[TailgateNut]

It's simple really charge more for the schooling. If the money isn't there then you have to get it from students. If some then can't go to school that is something we will have to deal with. We can't keep making money out of thin air though. It's not Dems fault though. Repubs are too blame even more because they are supposed to be the ones who keep spending under control.

We have to stop the bleeding, the govt is broke.


What a dumbass comment.

We are already so far behind the curve when compared to the education levels of students in other countries. So, IYO, let's make it even more difficult to be competative in a global market.ROFL!

Re costs: don't even get me started.

[TailgateNut]

Whenever it seems government funds something, there is always problems with it. As some have pointed out, you don't bail out companies that fail or are failing. There are ones right there ready to take their place, but not if get taxed to death, which is a common problem too.

More schooling is great, but more schooling for what job? You'll see people needing a college degree to just deliver pizzas since the jobs are scarce and so far, I don't see much interest or speed in our president to change that.

Again, the economy can not truly come back until more people have jobs. Healthcare isn't going to do it.


Lord Dunceroy speaks again!

[Rohirrim]

What a dumbass comment.

We are already so far behind the curve when compared to the education levels of students in other countries. So, IYO, let's make it even more difficult to be competative in a global market.ROFL!

Re costs: don't even get me started.

Yeah, but a lot of those countries subsidize the educations of their best and brightest. Why would we do that?

Goldurnit! That would be socialism!

[TailgateNut]

Yeah, but a lot of those countries subsidize the educations of their best and brightest. Why would we do that?

Goldurnit! That would be socialism!


No doubt!:~ohyah!: The horror of educating our next generation. We already have some serious failures with gen X and Y , might as well create another generation of dumbasses. Perfect for the Republicans to send off to the next ill conceived war!

[Garcia Bronco]

Universities are strapped for cash.

Some are...some aren't like anything else.

[Garcia Bronco]

What a dumbass comment.

We are already so far behind the curve when compared to the education levels of students in other countries.

Not really. It would really depend on what you measure now doesn't it? Plus, stupid reports like that compile information in all different ways making the conclusion pointless.

[elsid13]

Some are...some aren't like anything else.

Even those with the largest endowments are seeing signification reduction. State schools, which make up the majority of higher eduction choice in this country are especial "hurting" with loss of tax revenues.

[Arkie]

Someone had to take over, private industry proved beyond any doubt that they could manage. I love how these people still believe that the market will solve everything just after they needed the government to bail their asses out of the problems THEY created for themselves - morons.

Multiple choice. Who do you think are the morons?

A. Private industry that was bailed out
B. Government
C. The American People

[barryr]

Lord Dunceroy speaks again!

Gee, a post where you say nothing. How shocking from the little girl.

[Rohirrim]

While we flush our wealth down the ****holes in Iraq and Afghanistan and are going into trillions of debt, China and India are spending their money on their people, their schools, their students and their infrastructures. Let's paint a picture of the future, eh?

[ElwayMD]

Yeah, but a lot of those countries subsidize the educations of their best and brightest. Why would we do that?

Goldurnit! That would be socialism!

and some of those countries also eliminate the weak from their academic programs in their early teens, we don't. That's part of the reason why our numbers look worse than other countries. It's easier to pay for the education of a small group of students vs. the millions of college students we have in our country.

[rastaman]

You solve through regulation not govt takeover. Obama is going to be sorry he took this socialist route. People in America won't stand for govt running everything.

People in America won't stand for Predatory Fascist Corporatism either!

[Dukes]

People in America won't stand for Predatory Fascist Corporatism either!

Just once it would be nice if you posted without a buzzword you heard someone else say.