The Wall Street Journal had a very interesting article on the 12th about a government takeover few are noticing. The headline:
The Quietest Trillion
Congratulations. You're about to own $100 billion a year in student loans.
The details:
The Obama plan calls for the U.S. Department of Education to move from its current 20% share of the student-loan origination market to 80% on July 1, 2010, when private lenders will be barred from making government-guaranteed loans. The remaining 20% of the market that is now completely private will likely shrink further as lenders try to comply with regulations Congress created last year. Starting next summer, taxpayers will have to put up roughly $100 billion per year to lend to students.
Why, exactly, would private lenders be barred from making such loans? What is the purpose of eliminating the private market from the equation? Isn't this the same type of 'public option' being promoted in the health care bill? And where, exactly, will the government get $100 billion a year to cover this plan?
According to the article, the Congressional Budget Office (CBO) has reviewed the numbers and says that the programs will cost a fortune for the government to run and that the savings projected from the takeover are not anywhere near the official budget estimate, also called the 'score.' Despite the CBO assertions that the accounting is bogus, the accounting remains the official 'score' under the budget rules, "even though the official scorekeeper says it is wrong."
So when our representatives talk to us about the impact of this takeover, which numbers do you think they'll use????
The conclusion:
All of this is certain to pass the House, and the only chance for stopping it is in the Senate. If it passes, parents will soon have no choice beyond a Washington bureaucracy to borrow money for their college-bound children, and taxpayers will pay a fortune for the privilege.
I hope you'll read the entire article and then call your representatives and see if they can identify where they'd get the money to cover this additional cost - and you can also ask them how they can support a plan whose Enron-style accounting would land the private sector in jail.
