Yesterday, Goldman Sachs CEO Lloyd Blankfein announced a generous $500 million dollars in funding for small businesses. Why? In contrition for the whole ruining-the economy-and-having-taxpayers-bailout-his-company-thing. Wowsers, $500 million for the hundreds of billions we spent to save your ass! That puts us about even, right guys? Right? Read More »
There's a rational, reasonably immediate solution to a good part of the economic disaster. The banks won't like it but you will. But first the sad facts.
There’s a must read article posted on Saturday by Michael Kinsley at Slate that takes a fascinating (and depressing) look at corruption in the student loan industry. The federal student loan program, which has been “stricken by scandal in the recent months,” guarantees loans to students and pays off the interest to banks. The problem is that the government is paying twice the interest on these loans compared to ones it guarantees for itself to pay off the national debt. And it's a big problem--the subsidy costs taxpayers four billion dollars a year. And who’s at the source of the problem?
Not those head-in-the-clouds Democrats. It's Republicans, who adopted the student loan "industry" in its infancy, like a stray cat, and have nurtured it and protected it ever since. There actually is a parallel student loan program that does use government funds. It was started in the early days of the Clinton administration. It costs less to operate, and it has not been tainted by scandal. But when the Republicans regained control of Congress in 1994, they pushed through a law forbidding the Education Department to encourage the use of this program. As a result, direct federal loans account for only 25 percent of all student loans.
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