FreedomTalks

Chairman Armey had his letter on student loans published in The New York Times.

Madeleine May Kunin has her heart in the right place (“A Math Lesson on College Loans,” Op-Ed, June 13), but calling for more government in the student loan market just doesn’t add up.

A direct federal student loan program would raise the cost of borrowing and worsen the dramatic growth of prices in the higher education market. Analysis shows that below-market financing is a prime driver of the rapid rise in higher education prices. Subsidized loans translate into higher tuition and greater dependence on borrowing.

Ms. Kunin’s plan would increase the collective debt carried by recent graduates. In addition, the data show that direct federal loans have a 5 percent higher default rate than federally guaranteed loans.

With all this in mind, why would we enlarge the program? If we mean what we say and want to help students, we should get the government out of the student loan business.

This entry was posted on Wednesday, June 20th, 2007 at 9:24 am and is filed under Campus. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.