Critique of Article about the Future of Student Loan Programs

The Author of this Article, Molly M. Clafflin, is a recent graduate of Stanford Law School. She is offering her opinions about proposed legislation that could take student loan programs out of the hands of for-profit private banks and shift them to an existing government program. Her audience appears to be other students, government officials, and anyone with an interest in how student loans will be funded in the future. Since she is intelligent enough to be a graduate of Stanford Law School and probably, has significant experience as a recipient of student loans from the current system. It will be interesting to hear her point of view.

Claflin: If America wants to invest in the future, it should bank on students

After reading the article, I can understand her arguments that support the shift to a government run program, but am suprised that a current or prospective lawyer would not take the time to cite some of the facts she is using to support her arguments. I would like to be able to see other articles or specific reports cited (or even mentioned by name), so I can check to make sure I agree with her interpretation of those reports.

I agree with the author that the future of student loan funding is critical to the viability of our society. The one sure thing in this world is that "change" is always happening. Nothing will ever stay the same. Therefore, society and its people have to have productive, effective ways to grow and change or they will perish. In our capitalist society, money is the first step to accessing higher education. I doubt many people would disagree the me or the author on this point.

Clafflin states in her opening paragraph, "students are the best investment government can make". I'm assume she means that the best way the government can invest our tax dollars is in the education of its citizens. I will agree with her on this point too.

When she starts to discuss the enormous profits made by Sallie Mae in the 90's it seems like she is starting to focus more on corruption in big business, and profits made in an over zealous bull market than she is on the most effective ways to manage student loan money in our current economic environment. Sure, a lot of profit was made on wall street with the government backed money, and some top people made out extremely well. Some of those people were in government too. I don't have any reason to believe that a 100% government run program wouldn't have had the same or worse issues during the same time period.

When you get through all of the author's statements of personal, emotional opinion, there isn't much real evidence to show that the government will manage student loan programs any more effectively than private companies. With privatized programs, the government has the ability to outsource the management and distribution of our tax dollars earmarked for student loans. Government also has the ability to regulate private banks in any way it sees fit. The companies have a fiduciary responsibility (ethical responsibility) to act in the best interest of the government. If companies fail to meet those fiduciary obligations, then our government can put them in jail. If this doesn't happen, then it is a failure of government, and its citizens not a failure of private business. This is just my way of looking at the whole issue.

It all sounds simple to shift things to the government. However, I would like to see more facts about how the current government program works. How much more will it cost the government to manage additional student loan money internally as opposed to simply paying subsidies to others to take on that responsibility in these difficult economic times.

The author almost starts to contend that it is wrong to make profits on student loan money. I contend that profit should be expected whenever money is invested. I hope our government will make as much money to offset my taxes, as private companies made for me as an investor. Shouldn't we all expect that? I would like to hear the author's argument on this point in her article.

It really seems that Clafflin has taken a one sided view of this whole issue without considering all the relavant facts. Maybe, she is right in her ideas, but she has to do much more to convince me.