Health care isn’t the only sector of our nation’s economy that is well on its way to a government takeover. In addition to the health care overhaul, the ill-titled Student Aid and Fiscal Responsibility Act (SAFRA) has been attached the health care reconciliation bill that has passed in the House and is pending in the Senate. That bill is expected to pass the Senate any day.
Fortunately, SAFRA isn’t as bad as it once was, but that isn’t saying much. Now the bill is essentially a broad reorganization of the student loan program. It eliminates private lenders from federal aid programs, in addition to providing $36 billion in additional funding for Pell Grants.
So, similar to how the passage of health care reform without the “public option” was still a near government takeover of health care, SAFRA in its current form is one gigantic step towards a government takeover of the student loan sector of the United States economy.
Cato Institute scholar Neal McCluskey sums up the latest version of SAFRA by saying that “while a great deal of the spending has been stripped out, reconciliation would still tighten the federal government’s already iron grip on college financing. It would also plow billions more into Pell grants despite decades of evidence that schools just eat such increases by raising prices.”
Don’t be fooled into thinking the only higher education reform options are either a nationalization of the student loan market or even more subsidies to private student loan lenders (crony-capitalism). If the government left the higher education market, there would be no need for either.
– Elizabeth Young