Obama Administration Jumping the Gun on Direct Lending
The Obama Administration is sending letters to colleges and universities letting them know that 100% direct lending is a done deal. Apparently, the Administration doesn’t think it needs to see what Congress will do on the issue.
It is doubtful that the legislative opponents of Obama’s plan will be thrilled with this action. It may even anger some proponents.
A coalition made up of lenders and others in the loan industry came out this week and proposed an alternative to Obama’s plan. The coalition is called America’s Student Loan Providers. From the proposal:
The Student Loan Community Proposal endorses the core principles of the Administration’s reform effort — using federal funds to guarantee the stability of student loan financing, eliminating subsidies to private lenders, and generating historic savings for student financial aid — while maintaining choice, competition, superior service for students and schools and preserving tens of thousands of local jobs in all 50 states.
Regardless of what happens on these questions about student loan reform, the Administration has made itself look arrogant in its actions.
There are plenty of different views on student loan reform, such as provided by Dr. Richard Vedder in recent House testimony. The Executive Branch shouldn’t have disrespected Congress by jumping the gun.
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