PRIVATIZE STUDENT LOANS
Better to address the underlying causes of tuition inflation than to exacerbate them.
By The Editors
A bipartisan group of senators has signed off on a compromise bill that will keep the interest rates on student loans from going up significantly this fall. The bill would tie the interest rates on college loans to those on U.S. Treasury bonds, an improvement to the extent that it links the cost of borrowing to something other than political expediency, but undesirable in that it keeps Congress actively engaged in the college-loan racket.
And a racket it is. The cost of college at both the undergraduate and the graduate levels has climbed far faster than the rate of inflation for years, and subsidized student loans are a significant part of the reason for that. The main effect of student loans is not to help more young people to go to college but to help college administrators pay themselves more — the students are only a pass-through for federal money. While the interest rates are nominally low, the amount that has to be borrowed to cover a semester’s tuition continues to rise. It’s like getting a great deal on financing but paying $200,000 for a Honda Civic. It is a scam. If college administrators were really worried about access to undergraduate education rather than fattening their own compensation packages, they would be supporting initiatives such as Texas governor Rick Perry’s $10,000 bachelor’s-degree project, toward which higher-education professionals have been notably cool if not hostile. READ MORE HERE