Yesterday the New York Times published an editorial about the Student Aid and Fiscal Responsibility Act entitled, "The Student Loan Scam." The lede says:
The federal college loan program that pays private lenders a generous subsidy to make loans that are guaranteed by the government is an enormous waste of money that has long served more to enrich lenders than to help students.That is why the Education and Labor Committee passed the Student Aid and Fiscal Responsibility Act with bipartisan support yesterday. As the New York Times editorial explains:
[It] would end the unnecessary private lending subsidies and plow the savings into important education programs. The bill, for example, devotes $40 billion to the all-important Pell grant program, which has allowed millions of poor and working-class students to attend college.Learn more about the Student Aid and Fiscal Responsibility Act and read the entire New York Times' editorial.
It would spend $8 billion on early-education programs and $10 billion on an initiative aimed at strengthening community colleges. It sets aside $4 billion for a school modernization and improvement program.
The consolidated program proposed in the bill would in no way expand government. The loans would be handled through colleges. They would be serviced and collected by private companies and nonprofits that are already lining up to get the work. By forcing the companies to compete, and to undergo periodic re-evaluations, Congress could get a good deal for taxpayers and better service for borrowers.
