Reforming the student loan process

The average American college student graduates with $20,000 in debt.  As part of the Affordable Care Act reconciliation process, Congress eliminated commercial banks from the process of lending government money to students.  This will save an estimated $61 billion over 10 years, which will be redirected to higher education and student aid, including an extra $36 billion for Pell grants to low-income students.

This is a good idea, but it is ironic that the Affordable Care Act eliminates the middleman commercial banks in student loans, but does not eliminate the middleman private insurance industry in guaranteeing health care. Nor is the extra aid likely to offset the soaring cost of college tuition.

It is like so much of what passes for reform these days.  It keeps things from being worse than they otherwise would have been, without actually making things better.

Click on this for a New York Times report on the legislation.

[Update 9/5/10]  I may have given President Obama too much credit.  Click on this to see why.

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