Editorial: Eliminating federal student loans would be disastrous: News of the Day

Nov 14, 2011 Issues: Education

 

Rick Perry’s gaffe at last week’s GOP presidential debate may have stolen most of the headlines, but some posturing by two other candidates should have garnered equal dismay. Both Ron Paul and Newt Gingrich called for the abolition of federal student loan programs, saying they had failed the American taxpayer.

The absurdity of this idea cannot be understated. This editorial from last weeks’ San Jose Mercury News took Paul’s and Gingrich’s ideas to task, highlighting the importance of giving as many Americans as possible the opportunity for higher education:

An educated workforce is precisely what government should be investing in for the long-term. It's no different from other kinds of infrastructure -- roads, bridges, broadband service -- that help everyone prosper. Leaving this to the private market would be devastating to poor and middle-class students, to businesses and to our future prosperity.

Millions of low- and middle- income students rely on these federally-backed student loans to help pay for college. Without access to these funds, they would be forced to wade the waters of wasteful and predatory private lenders – highlighted in this 2008 report by the National Consumer Law Center – putting college out of reach for most.

The passage of the Student Aid and Fiscal Responsibility Act (SAFRA) last year eliminated wasteful subsidies paid out with taxpayer dollars to private lenders and expanded the Direct Loan (DL) program to cover more than 600 schools across the nationaly and internationally. The program is essentially guarantees students access to low-cost federal college loans, in any economy.

If Paul’s and Gingrich’s vision came to fruition, poor and middle-class students around the country would not be so insulated from market fluctuations. They would not be guaranteed access to student loans, and thus, might not be able to afford attending college. This would be detrimental to America’s economic competitiveness and overall health.