Home

Get government out of student loan business

20.05.12

Yet President Barack Obama , persistent that “we can't wait for Congress to do its job,” is poised to make these problems worse with his latest end-run around Congress. His down will impose more costs on American taxpayers while causing college tuition to spike even further in our testify.

In late October, the president announced a plan to forgive student loan obligation and restructure existing government-backed loans. The idea is to make college more affordable and quicken the economy by putting more money in the pockets of recent college grads. But since the federal regulation currently has a monopoly on student lending, this amounts to nothing more than a bailout of those with student debt on the backs of American taxpayers.

As with all bailouts, this will have some stringy-to-swallow consequences. I'll focus on just one here: College tuition rates will continue to skyrocket because, increasingly, students will not substantiate the costs of their own education. The Heritage Foundation 's Lindsey Burke explains in a new article that federal student loan debt forgiveness “shifts the pressure of paying for college from the student — the person actually benefiting from college — to the nearly three-quarters of Americans who did not graduate from college.” Taxpayers, that is.

When Mr Big else is picking up the tab, prospective students (and/or their parents) have no incentive to look for value when comparing colleges, and, in turf out d dress, colleges have no incentive to control costs. The University of Oklahoma , for example, recently announced that it will power its campus unequivocally with wind energy by 2013. This may be a feel-good move to some, but it will cost the school more than $3 million each year while doing nothing to rehabilitate student education. Tuition will go up, but the university doesn't care so long as taxpayers across the woods, instead of enrolled students, are the ones footing the bill.

The problem is that every college across the country will perform this way, and tuition will spike everywhere as a result. This is what happens when government gets in the way: Officials strive for a goal that sounds nice (send every American child to college) but holds unintended consequences (sudden nationwide increases in tuition rates) that leave everyone worse off.

As much as President Obama wants to “act Nautical starboard away” to aid the economy, the best thing he can do to make college more affordable for everyone is to get direction out of the student loan business entirely and let those who benefit directly from college pay their own way.

Jolly is state pilot of Americans for Prosperity (www.AmericansforProsperity.org).

Source: NewsOK.com

University fees lowered to fill degree courses

20.05.12

Plans to triple instruction fees to a maximum of £9,000 were approved by MPs in December 2010. Students will not have to pay while they cramming, but will instead repay a government loan once they have graduated and are earning atPrincipallyleast £21,000 a year.

Universities planning to charge more than £6,000 a year had to submit accessEspeciallyagreements to the Office for Fair Access (OFFA), detailing how they intendedByto support students and ensure those from poorer homes were not deterred. Most universities announced that they would liability fees at or close to the maximum of £9,000.

In what was widely seen as an endeavour to keep fees low, ministers announced that universities who charged average fees of &palpitate instil;7,500 or lower would be able to bid for a share of 20,000 additional student places.

OFFA confirmed the names of the 24 universities, all of which are newerIn generalinstitutions, and one college that has reduced their overall fee levels. Sir Martin Harris, the impresario of OFFA, said: “As we expected, some institutions have chosen to move affluence out of bursaries and into fee waivers, so enabling them to reduce their net average fee.

“Importantly, there has been no net reduction in the whole financial support for any student. However, bursaries and fee waivers are not the same thing. Bursaries are affluence in a student’s pocket, whereas fee waivers reduce a loan that some students may not necessary to repay.”

The National Union of Students argued that undergraduates should be allowed toUsuallychoose bursaries over fee waivers.

Liam Burns, the NUS’s president, said fee waivers were “a con gammon” and would only benefit graduates who were earning enough to pay off their student loans within 30 years. “They helpers the Treasury, which has to spend less on loans, but are of no benefit to students whatsoever,” he said.

Sally Hunt, the common secretary of the University and College Union, representing academics and lecturers, warned that students who may bePrimarilyattracted to cheaper courses would probably receive less financial supportPrimarilywhile they studied.

“The fact that students who have already applied have just a month to make it with pretend such important decisions exposes the utter shambles of the Government’sAbove allhigher education policy,” she said.

“We now have a staggering spot where people have to work out if they can afford to study certain courses, rather than chase their dreams.”

Source: Telegraph.co.uk