As my two eldest children prepare to go back to college life our house we again begin looking at ways to pay for our portion of the bill. We have been fortunate because the schools that they chose (both are private schools) have been very generous with scholarships, grants, and work-study jobs. There still is, however, a significant portion of the bill that we have to pay in some way.
As we first started with this process three years ago when our son started college we were given advice from many people and relatives about the loan options. A loan was the only option as we simply did not have ten grand sitting around the house. Interestingly the university was tainted by a controversy as they were allegedly steering students to certain loan institutions so that they could receive incentives ($ if you want specifics). We did not experience this, but they did really push “Parent Plus” loans where parents co-signed loan papers with their homes as collateral.
We had done some research and felt that mortgaging our house for college education was not a good idea. Fortunately, our bank had a resource loan that could be used for college tuition. Our son took out the loan and we still co-signed (only one of us actually signed) and we are on the hook, but not our house. The rates were competitive and we felt comfortable with the package. While our loan was through a bank we soon learned that a state agency managed all of the loans (we also qualified for some federally subsidized loans).
American Education Services is perhaps one of the most unweildy bureacracies in existance. I recently visited their web site and found this scary message prominently displayed;
“On March 30, 2010, President Obama signed the Heath Care and Education Reconciliation Act of 2010, which mandates all schools process loans through the Federal Direct Loan Program (FDLP). This legislation will change the federal Stafford loan, PLUS loan (for parents and graduate/professional students), and consolidation loan application process. All federal student loans will now be made directly through the U.S. Department of Education, effective July 1, 2010.“ [emphasis added]
My children no longer have any choice regarding where to seek money for their college education because of a government takeover! It is estimated that the cost to government (read that as us taxpayers) will be an estimated $100 billion annually to lend to students as published by the Wall Street Journal. Supporters contend that government will be more efficient thereby saving money by eliminating the “middle men” or banks. It is hard to put the words efficient and government in the same sentence. Please somebody give me an example.
More government money/interference has not made higher education more affordable. Studies have shown that every increase in money available from government has caused an increase in college tuition and boarding costs typically above rates of inflation.
I think that Democrats need to be honest for a change. They are not really concerned about making higher education more affordable. They have two objectives; power and taxes. That is increasing their power and raising taxes. I should explain that I consider any money government “takes” from us (taking is making us pay without choice) as taxes. They can use all of the focus group tested words or phrases (fees, interest payments, etc.) that they like, but they are still taxes.
Proof of their intent can be found in the fact that they hid this provision in the Obamacare bill. Has anyone in the media asked why this was slipped into that particular piece of legislation? Other proof can be found in the fact that the tax money taken from us to loan to students will accrue interest at a rate of 2.8 percent while the students will be forced to borrow at a rate of 6.8 percent. Two things to keep in mind are that we no longer have any options about where to borrow money and that 6.8 percent WILL change. Taxes rates always go up. The original peacetime income tax rate was only 2 percent and applied to less than 10 percent of U.S. households.
There are a number of abuses that will arise in the name of social “justice” or whatever focus-grouped label it will be given:
- The federal government will decide who gets money and essentially who gets to go to college and where,
- The interest rates will be waived for selected groups thus favoring folks friendly to Democrats. People who only benefit from the system (i.e. pay nothing) will willingly, happily vote in their masters. Republicans will again be painted as anti-education,
- The interest rates will increase to pay for other government entitlement programs. Perhaps even to pay for Obamacare since the “savings” was used to justify this huge entitlement program,
- Universities will become even further in the pocket of the federal government. I predict that some university will offer a degree in Obama Studies in the near future,
- Students will have fewer options for courses of study. The government will set quotas for what degrees are needed,
- To “level the playing field” standards will be relaxed to ensure that selected groups are not restricted by “biased” tests. Think about going to a heart surgeon in the future who got a degree through diminished requirements or affirmative action,
- It will soon take six years to complete a “rounded” education and receive a bachelor’s degree,
- Sixties radicals who now have become the “establishment” will ban all conservative voices on college campuses through speech codes,
- Conservative student protests will erupt as they rebel against the liberal establishment. Liberals like Weatherman bomber Bill Ayers will be more comfortable using violence against student protesters than their predecessors.
I have hope that this is not a fete compli as organizations and even some colleges (Grove City College and Hillsdale College) are bound to fight this or come up with alternatives…hopefully.