Introduction:

“If America wants to invest in the future, it should bank on students”. This is the title of a commentary article that appeared in the Opinion section of the Austin American Statesman on September 24, 2009. According to the article, Congress is considering important legislation this year that will decide whether to take student loan programs away from private companies, and place them under the management of the Federal Government.

This article offers supporting opinions and facts for a 100% government controlled student loan program. It contends that privatization is not working the way it should, and that the federal government will be able to manage the program more effectively. The writer believes that large private companies, and their executive leaders, are making exorbitant profits by: misusing government subsidies; increasing interest rates on existing loans, at the expense of students; and allowing government to shoulder all the risk for loan defaults. In addition, the author believes this proposed change to government control may save the program 87 billion dollars over the next decade which could then be available to fund additional student loans. It is acknowledged that the shift to government control might cause additional job-losses in the private sector, but the writer believes that helping more students go to school may promote new business creation, and new jobs in the future that will outweigh immediate job losses.

If you have any interest in student loans, it would be a good idea to familiarize yourself with these proposed changes.