Student Loans, and Returns on Investments

by wok3

Saturday, April 03, 2010 at 06:45 AM EDT

Talking recently with an avid Fox News viewer (VERY avid), she told me of the government’s take over of the student loans, and how regular banks would no longer be a part of this. Critics have said that this revision will cut out the middleman, and effectively make the government the only real place to go to get an affordable loan. I suppose if one still wanted to get a loan for a higher percentage, that they could.

The new student loans, due to take hold in 2014, would limit the percentage of income on those that took the student loans, and erase the balance of loans if the students worked in the public sector for 10 years. If the loan had not been paid off in 20 years but the former student had made all their payments on time, that balance would also be erased.

Now colleges and universities already use Federal funding, and have for quite some time. There has never really been much of a brouhaha about this. This will likely change as the election this year, and then again in 2012 roll around, as the GOP (in between visits to bondage clubs) will no doubt attack this plan vigorously.

Sure, these loans will make it difficult for commercial banks to compete with them, but where is the belief that the privately run free market will always trump the government’s efforts? Is there really no way a commercial bank could compete? Perhaps they are too busy using bailout money to come up with a good plan, who can say.

One thing about the government paying for college: Some of this countries best years were a direct result of the massive G.I. bill after the second World War. The middle class grew, standards went up, as more and more were able to attend places of higher learning. There were a number of other factors of course (we just kicked the crap out of a bunch of our competitors, and even our allies needed time to rebuild), but the fact remains that the more citizens we can get into college and universities, the better off the nation will be. As for the new program, you can call it socialism if you are mentally deranged and don’t notice people paying money back I guess, but why not look at this as an investment on our own country? No one will be forced to take the loans, and while spending money is always something that should be done carefully, this should not mean that we simply stop doing it.

Exactly what sort of return on their investment would any private company get if they invested nothing in themselves? I know some argue that any money spent by the government on things ranging from Social Security to programs like this student loan plan think that these ideas are against the core principles of this country, and as long as those same people never ever use a road or highway, call for the police or fire department, or any other of a host of things never mentioned in the Constitution, then I won’t call them a hypocrite. I will still call them an idiot of course, but then that is my right.