Up until Obama signed the health care reform act into law, college student loans were primarily handled by the private sector. Now, they will be the responsibility of the Federal government. Obama claims that $68 billion will be saved by "eliminating the middle man" (meaning the banks). However, if all the factors are taken into consideration, this will be another losing Federal operation that was best served in the private sector.
What has just happened with Obama's signature into law is that a tax generating activity, the student loan business, has been moved completely into the category of a Federal expense that must "now" be fully funded by the taxpayers of America and, probably, at a much higher administrative cost than it was when this activity was in the private sector. That's because private sector workers will be replaced with Federal workers who are unionized. They will get salaries that are 75 to 80% higher and their health care costs and retirement benefits are typically higher than that of any private sector job.
My guess is that the quality of administering those student loans will also suffer. Students will find themselves in long lines at some federal office trying to apply for or straighten out any problems with their loans. There will definitely be problems, as is always the case when the Federal government gets its hands on something.
In summary, once again, we will lose tax revenues and it is you and I that will have to fund another poorly managed and poorly run Federal operation whose costs will far exceed its operational cost when it was a part of the private sector. This is another example of the Democrats and Obama finding ways to grow the deficit: both by increased spending and by elimination of a reliable source of tax revenues. The Federal government has never been known to be the low cost provider of anything and this will be another case of that.
Subscribe to:
Post Comments (Atom)
Posts
1 comment:
I heard another angle today that was extremely interesting. It is that by taking over the student loans, the government now has its foot in the door of private colleges....and can dictate the policies of those colleges and create quotas for them, etc. Where Obama is concerned there is nothing the government will not touch. He couldn't get in the front door of the privately held universities, so now he is going in the back door. If one student of a private college uses a government backed student loan (and all student loans will be) then public money is going into a private school...hence the government then has the "right" to call the shots. Why even have a board of directors? We have the czars.
How's that for one more example of Obama's insidious and heinous circuitous schemes?
Post a Comment