To listen to the President now, you would think that all students are going to be bankrupted in two months and it will be the Republicans’ fault. Well, I don’t know how many students will be bankrupted, but the history doesn’t line up with the current story line.
The article reports some of the details of the Higher Education Act:
…(The act would) ban private companies from offering federally guaranteed student loans as of this July. Congress has already passed laws in recent years discouraging private lenders from making loans without a federal guarantee. But most college financial-aid departments still want private companies to originate and service the guaranteed loans. That’s because the alternative—a public option run by the Department of Education—has been distinguished by its Soviet-style customer service.
Unfortunately, the Higher Education Act passed, along with Obamacare.
An article posted at Heritage.org provides some background on the current flap about the interest on these loans:
After gaining control of Congress in 2007, then-Speaker Nancy Pelosi (D-CA) and Rep. George Miller (D-CA) championed H.R. 2669, legislation that only temporarily phased down interest rates for subsidized Stafford Loans made to undergraduate students over four academic years, at which point the rate would revert back to 6.8 percent.… [E]xtending the 3.4% interest rate on subsidized Stafford Loans made to undergraduate students for one year would cost roughly $6 billion.
This current ‘crisis’ was set up!
Heritage further reports:
Debate over interest rate hikes are part of a larger problem with federal involvement and ever-increasing subsidies for higher education. The cost of attending college has increased 439 percent since 1982 (after adjusting for inflation). Continuing to increase federal subsidies hasn’t helped reduce college costs and has likely exacerbated the problem over the decades.
Maybe we should consider the fact that as student loan money has increased, the cost of college has increased. The fact that there has been a 439 percent increase in the cost of attending college in thirty-years (even after adjusting for inflation) should tell us something.