I don’t know the first government official (elected or otherwise) who took a concept from 1984 and determined that bills which were intended to exert more government control over citizen’s private lives were “reforming.” Maybe it is because reform sounds like medicine we should swallow (good little pill poppers that we are), not unlike tolerance.
For a better definition of reform, check out my earlier post on the topic.
Many of us have had it up to here with the health care reform (from 3200 to Baucus) but we now we have the Student Aid and Fiscal Responsibility Act of 2009 which is intended to reform the student loan process by removing private entities from administrating federal loans (among many other things).
Once again, this is not reform. Reform of the student loan process would involve removing the federal government from any role whatsoever in student loans of all sorts. If one wishes to remove private entities from administrating federal student loans, I’m for it, as long as there are no federal student loans to administer. Otherwise, going this direction is simply leading to more government control of education, more market manipulation (since the touted benefit of this approach will be to keep interest rates for loans on a firmer leash), and less freedom for borrowers and lenders to determine just how much risk each is willing to accept.
Heritage has some thoughts as well:
The Congressional Budget Office (CBO) has projected that eliminating FFEL would lead to significant cost savings for the government, enough to more than offset increases in the costs of the Direct Loan program and the other spending increases included in the bill. However, there are questions about whether the CBO’s projected cost savings will fully materialize if these reforms are enacted.
In July, CBO Director Douglas W. Elmendorf acknowledged that the original CBO projection did not adjust for the cost of market risk of increasing defaults that the federal government will assume with the shift to direct lending. In addition, there is a danger that taxpayers’ costs could balloon if the federal government proves less efficient in administering and collecting loans than current private-sector lenders, which have an incentive to administer and collect loans efficiently in order to maximize profits.
The federal government might be “less efficient in administering and collecting loans”? Get outta’ here!