by Deb Cupples | Thursday, the U.S. House passed the "Student Aid and Fiscal Responsibility Act of 2009" by 253-171 votes (see roll call). The bill ends taxpayer subsidies to private lenders in the student-loan business -- which would save us taxpayers an estimated $80+ billion.
Given that our financially shaky nation could use every $80+ billion it can get its hands on, you'd think that ALL Washington politicians would favor ending wasteful subsidies (i.e., welfare) to private lenders -- especially Republican politicians who call themselves fiscal "conservatives."
But noooo: the vote nearly split along party lines, with most House Republicans opposing it. According to the Independent Mail --
"Republicans warned that instead of saving the government money, as Democrats promise, the bill could wind up costing the government more money."
The Ohio 15th District blog commented:
"The Republicans just can't understand why young people are turning and running away from the Republican Party."
It's downright bizarre that so many Republican politicians claim to be business oriented while failing to grasp a simple, business principle: cutting out a middleman saves money. Put another way,
Every tax dollar spent subsidizing a private lender's overhead, employees' salaries, profits, and corporate jets is one less dollar to actually lend to college students.
And legitimate middleman-costs are only part of the equation. Waste, fraud, and abuse on the part of private lenders added even more to the taxpayers' tab.
Check out this page at Higher Education's "New America Foundation" for links to stories about apparent corruption, including kickbacks, conflicts of interest, and luxury trips -- all of which cost money and may have been directly or indirectly subsidized by us taxpayers.
Now, of course, the bill goes to the Senate. God knows what'll happen to it there.
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