This is healthcare?
It seems the Democrats are have now put an amendment into the healthcare reconciliation bill that would authorize the federal government to own Sallie Mae, thereby enabling the federal government to directly provide student loans (rather than guarantee loans made by private lenders).
Regardless of the merits of the proposal (more on that in a bit), I’m a little lost in seeing how this is related to healthcare, healthcare reform, or medicine in any way. There’s a reason for that.
The idea here is that since this proposal is slightly more popular than HCR as currently constituted, adding this rider will make the HCR bill more palatable to liberal House members. Of course, death by lethal injection is also more popular than the current HCR bill, but I don’t see anyone lining up for their lethal shot cocktails. But I digress.
Now, back to those merits of direct government lending to students.
The way the system currently works is this: student needs a loan to help pay for college, say $25,000 over four years. Student has no credit history. Student’s parents don’t have $25,000 in collateral to put up, nor do they have the type of credit rating to effectively cosign the loan. So, the federal government steps in to insure the loan – if the student reneges on the loan, the government pays and then assumes the debt. As part of this trade-off, the government insists that interest and other repayment terms are kept within their guidelines.
Despite occassional glitches, the system works. Millions of people go to university and learn. They repay their loans. Life goes on.
Of course, Dems say this about improving affordabilty. They just can’t explain how that works. And by sneaking it into healthcare, they can attempt to complete the take-over of the finance industry along with the healthcare industry.
I work in the private student loan industry and have seen first hand governments intrusion into this sector of finance. Since Oct of 2007 we have seen so many private student loan servicers go out of business. Thousands of jobs were lost, with more to come now that they have piggy backed this Student Loan bill with Health Care.
That could very well mean my job also.
March 21, 2010 at 11:39 pm
Now, there’s an anecdote for Nancy Pelosi.
Jeff, I hope all will be well for you in the coming months.
March 22, 2010 at 6:28 am
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