Saturday, October 17, 2009

Headed for Disaster.

Congressman George D. Miller has sponsored and released a new student aid bill, HR 3221. You can read it yourself here:

This bill eliminates the Federal Family Education Loan Program. This is a program in which banks make loans to students, and the loans are guaranteed by the Federal government. The benefit of this program is that banks will loan money to anyone regardless of credit history or income as long as they meet the enrollment requirements at an approved school. The banks benefit somewhat from subsidies paid to them by the feds, but mostly by enabling them to establish relationships with desirable (college-educated) borrowers who often extend their dealings with the banks beyond repayment of their student loan debt. This generates revenue for the lenders by way of bank accounts, mortgages, car loans, CDs, etc.

The program has had some difficulties, with some lenders bending rules regarding borrower solicitation and improper relationships with schools. (It bears pointing out here that much of that mess had to do with PRIVATE loans, not FFEL loans.) The program does have its share of problems, and is in serious need of reform.

However, the Democrats have a bug up their asses about the FFEL because their competing program, the William D. Ford Direct Loan Program, has not attracted as many schools and borrowers as they hoped at its inception in 1993. It's a Clinton initiative; William Jefferson "Cum Stain" NAFTA Clinton. He's a handitard, a liar,and a national embarrassment. But I digress.

Schools and students hate the DLP because it's grossly inefficient and more expensive for borrowers. FFEL loans are cheaper, you see, because those big evil banks give their borrowers incentives in the way of reduced or eliminated fees and interest rate reductions. The feds don't do this because they're more evil than the banks.

Since the Dems are in charge, they're using this as an opportunity to make their shitty loan program successful, by God. President Obeekaybee, George D. Miller, and some other fat greasy politicians drafted the afformentioned student aid bill. The bill eliminates the FFEL in favor of the DLP, as I've stated, but fortunately gives non-profit FFEL guarantors first crack at servicing the loans. This is mostly because the current DLP servicer, a company called ACS, sucks nuts at it.

Good for me, you see, because this means I'll probably get to keep my job. Also bad for me, because I have two children whom I'd like to send to college, and now it's going to cost me a whole boatload of extra loan fees to do it.

"But, Babs!" you may say. "Eliminating the FFEL will be COST EFFECTIVE, and that money is going to Pell grants!"

So say the sponsors of this bill, although most economists beg to differ. Problem here, though, is that middle class people like myself don't qualify for Pell. I make too much money, you see. Most people make too much money, except for people who make bad life decisions. You know, like single mothers and people on welfare and the chronically, willfully underemployed.

If I had spent all my adult years hopping jobs so that I always earn entry level wages, I'm sure I'd qualify for grant money. Silly me, working for all these years, never getting fired or leaving a job unless I had another one waiting. Silly me for not pumping out a boatload of kids to different fathers. What the hell was I thinking?

Not only does this bill increase Pell grants on the backs of the overtaxed middle class, it also sets aside $1.2 billion for historically black colleges and universities. There's a load of schools like this, built post-slavery to educate blacks. All kinds of special allowances are made for them because their graduation rates and grade point averages are abysmal. The president thinks this can be fixed by giving them money, and that the problems have nothing to do with the culture in which these kids are raised, which does not value education or responsibility.

The bill also gives $12 billion to community colleges so that 50% of the population will have post-secondary education within the next ten years or so. Don't get me wrong; trade schools are good. We need plumbers and mechanics and roofers. Community colleges are also great places to get your first two years of college. Associates degrees? Useless. And when 50% of the population has a degree, what's it worth? Not much. And all these students graduating with these degrees will need jobs, which are disappearing over the border at an alarming rate. No one seems to be mentioning this, however.

There's more in this bill that has my blood pressure soaring, but I'll be typing all night if I try to cover it all. Suffice it to say that this piece of legislation causes the student aid system to ream the middle class and reward bad behavior even more than it already does.

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