The Right Step on Student Loans

In 1823, Thomas Jefferson laid out in a letter his plan for public education in Virginia and more generally, throughout the United States.

The public education… we divide into three grades: 1. Primary schools, in which are taught reading, writing, and common arithmetic, to every infant of the State, male and female. 2. Intermediate schools, in which an education is given proper for artificers and the middle vocations of life; in grammar, for example, general history, logarithms, arithmetic, plane trigonometry, mensuration, the use of the globes, navigation, the mechanical principles, the elements of natural philosophy, and, as a preparation for the University, the Greek and Latin languages. 3. An University, in which these and all other useful sciences shall be taught in their highest degree; the expenses of these institutions are defrayed partly by the public, and partly by the individuals profiting of them.

Today, President Obama signed a series of fixes in the health care bill, which in itself is nothing to be proud of. There is part of the bill, however, that is worthy of note and, in my opinion, represents a good step in providing higher education in an affordable manner.

Starting July 1, all new federal student loans will be direct loans, delivered and collected by private companies under performance-based contracts with the Department of Education, according to officials. Interest rates for some borrowers will also be lowered.

The new law, which first passed the House in September, greatly expands the Pell Grant program for low-income students. The reforms aim to revitalize community colleges and increase support for institutions that serve minorities and historically black colleges.

This reform of the federal student loan programs will save taxpayers $68 billion over the next decade,” Obama said in his weekly address Saturday. “And with this legislation, we’re putting that money to use achieving a goal I set for America: By the end of this decade, we will once again have the highest proportion of college graduates in the world.”

Part of what differentiates America from the rest of the world is that we guarantee equal opportunity, but leave the outcome to the devices and ability of each individual. This insures that those who are willing and capable can succeed, no matter their background.

The old way student loans were handled was inefficient and expensive. For students, the government, the bank and the school all require separate applications. The school must then get in touch with the government to find out how much the student deserves and then the school must certify to the bank the student’s status and then the bank must send a promissory note to the student and  it goes on and on. Now, hopefully there will be one application – making it easier to apply and less intimidating for those who think they won’t qualify.

The old way, banks were given billion in subsidies to give out student loans. They make most of their money back over a 10 or 15 year period and so they pocketed billions in taxpayer dollars. While they were taking a certain amount of risk, it was risk that was too costly to subsidize via a middleman.

It makes more sense for the government to handle student loans. I know, I know, sounds crazy but it’s true. Because the risk is so great, it’s expensive for banks to give out loans over such a long span. The government really is the only institution that can afford to hand out billions over a long period of time.

In no way do I think I’m compromising my limited government values by feeling this way. Jefferson was clear in saying that government’s have purpose and it’s in all of our interests to educated the masses. An educated person is more productive and prosperous than an uneducated one. The cost of education is certainly cheaper than the cost of the effects caused by uneducated people. Uneducated people need welfare, unemployment and health care provided to them. They cause strain on our social system and pull down our economy, rather than contributing to it.

As Jefferson made clear, all people should be educated. Some, more so than others, but nonetheless all. And no one should be denied opportunity because they cannot afford it.

Condemn the Violence

I’m about as opposed to President Barack Obama’s health care plan as one can be, but never would I go this far.

There are more questions than answers after a gas line was cut outside the home of Congressman Tom Perriello’s brother.

According to the FBI, it is being investigated as a possible threat to the Congressman after he voted in favor of healthcare reform.

Two members of a local tea party group posted the home’s address online, mistakenly believing it belonged to Congressman Perriello.

Authorities say the gas line to the home’s propane tank was slashed Tuesday night, although investigators don’t think there was an immediate threat to his brother’s family.

This is why the tea party movement is bad for America. Very Bad.

There is no leadership; they answer to no one. There is no real platform; the government is just bad. While the group’s intentions are noble, because of the lack of leadership and clear platform, they are more prone to violence than organized groups.

Republican leaders should condemn the violence immediately. I do. America is great because in March of 1801, we became the first country in the world to conduct a peaceful transfer of power from a controlling party to an opposition party. A peaceful political process is one of the hallmarks of our system.

The Tea Party movement is fun to watch. It’s good to see so many people involved and interested. But the group needs leadership – and that leadership is inside the Republican party. It needs a platform – and not just government is bad. What it definitely does not need is more violence.