Tuesday, September 18, 2007

The student loan program

This Michael Kinsley article taught me a great deal about how federally subsidized student loans work. Basically there are two kinds: one where the government gets banks to lend money to students by guaranteeing the loan and paying some or all of the 7-8% interest, and another where the government lends directly to students, and can borrow money to do so at 3-4% interest. Why would the government pay more money so that banks can do the lending rather than the government? Because those banks have been very cozy with Republicans (and are now getting cozy with Democrats now that they control Congress).

This seems to be another example of how Republicans screech with outrage when the government spends money to help people, but cheer with glee when the government spends ten times as much money to help a large corporation. Blank checks for war, miserly penny-pinching for health care and education. Not a good way to maintain an economically competitive nation in the 21st century, in my opinion. And Democrats need to fight on this issue more. If we aren't vigilant, they will just feed at the trough, too.

Note: there are some well-written rebuttals to many of Kinsley's claims in the comment section associated with this article. However, I don't know enough about the factual claims made to know who is right.


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