Bush privatized govt's student loan programs, creating a new industry that squeezed $$$billions$$$ out of families and prospective students who were in the programs to begin with because they couldn't afford to borrow money the standard way at the standard rates. IOW, another banking ripoff. Obama has threatened to close the govt's privatization program, calling it "wasteful", as indeed it is. The response was predictable: industry lobbyists are gearing up to buy themselves some pols.
IF EVER there were an example of "socialism for the rich, capitalism for the poor,'' it's the nation's student lending system. Industry giants receive government subsidies to originate and administer government-backed student loans. These loans bring little to no risk and huge profits, even as college students and graduates struggle under the weight of crushing debt during a down economy.
President Obama wants to save taxpayers $80 billion over the next 10 years by eliminating wasteful subsidies to the private student loan industry. That money would be far better spent on expanding direct federal loans to students. But after the House passed a student loan reform bill last fall, the industry has dumped tens of millions of dollars into lobbying.
And the argument they're using to advance their intensely selfish agenda is no surprise either. Obama's move to save students from pedators and taxpayers from shelling out $billions$ of unnecessary subsidies is, of course, socialism!!! Naturally.
Predictably, the lenders who want to hang onto their government subsidies have smeared Obama's efforts as a "government takeover'' of the loan industry, and have claimed that it will lead to lost jobs at Sallie Mae and other large loan companies. The rhetoric is misleading. These loans have always constituted a government program, since the government has absorbed the vast majority of their risk and cost. Moreover, private companies would still service the loans; they just wouldn't originate them or receive subsidies.
IOW, instead of being able to generate $billions$ in profit for running a govt program, they would get a reasonable fee for the service they provide. These days, it's apparently "socialist" to offer an industry a reasonable profit for providing its services rather than an obscene one way beyond the bounds of both sense and proportion.
But if you're a fan of (meaning, "invested in") the absurd and expensive privatization of student loans, don't waste any sleep worrying. The industry lobbyists will simply buy a few Senate conservaDems and Obama's proposal will die.
Which he must know already, so the question arises: is the threat just a ploy to get the student loan industry to contribute as much as its Wall Street confreres? If so - and it's possible - it will almost certainly work. If so - and it's more than possible - it's just one more sign that the conservaDems have turned the Democratic party into the GOP with a different name but the same face and the same tactics representing the same constituency.
The rich.
Powered by Zoundry Raven
Comments