Above The Chatter: The Money-Changers

It's time to throw the money-changers out of the temple of higher-education. Senator Edward M. Kennedy, Nov 2006

Kevin Connor has a report "on the ties between the private student lending industry and the six Democratic anti-reform Senators" in "The Money-Changers in the Senate."

The student loan industry faces a serious challenge from advocates who question the reason for its existence, which is premised on massive, inefficient government subsidies.
With billions in profits on the line, banks have waged an intensive, multimillion-dollar political and lobbying campaign to maintain the status quo: subsidies for the banks, at students' expense.

Their expensive campaign has won them some support. On March 9, six Democratic senators—Blanche Lincoln, D-Ark.; Mark Warner, D-Va.; Tom Carper, D-Del.; Ben Nelson, D-Neb.; Bill Nelson, D-Fla., and Jim Webb, D-Va.—sent a letter to Senate Majority Leader Harry Reid to make him "aware of our concern" about reform efforts and urging consideration of "potential alternative legislative proposals."

What would prompt six senators to oppose efforts aimed at reducing lending costs by cutting out superfluous money-changers? The answer, of course, is the power of money, as deployed through a combination of campaign contributions and strategic lobbyist hires.
This report documents the extensive ties between the six senators and major players in the student loan industry. Read full report »HERE.

Sara Robinson puts forth several reasons why the conservatives want to keep the government out of the student loan business in her report, Student Loans: The Right's Hidden Agenda.

President Obama's "no-brainer" suggestion that the government get back into the direct lending business has such obvious fiscal merit that you'd think it would melt the heart of the most obdurate conservative. But it's getting resistance anyway -- which is proof that there's more than money at stake here. This proposal threatens two of the conservatives' most cherished goals; and they're willing to waste as much taxpayer money as it takes to keep us from backsliding away from the progress they've made.

The first goal is preserving privatization. The conservatives have been telling us for 40 years that there's nothing the government can do that the free market can't do better. Of course, most of us really get it now that "privatization" really means "paying 25% more for the same stuff and letting the private sector skim off the profit while sticking us with the messes." While privatization has worked well in some areas, it's been a disaster in others -- and this is one of them.
Robinson finds that the goal of the conservatives is to keep school loans with the private sector because of "the right wing's fundamental distrust of the middle class."
One of their big takeaways from the 1960s was that giving the masses a high level of education (as the GI Bill and the generous educational subsidies to the Boomers did) is one of the worst mistakes a would-be aristocracy can make. Send 'em to college, and the next thing you know, you've got a big, boisterous, pushy middle class pouring out into the streets demanding their "rights," asking the rich to share their wealth, questioning their bought-and-paid for government policies, and devising technocratic "fixes" to problems the corporate masters really would rather ignore. You can't manipulate 'em -- they're too smart for that -- so you can't make 'em do what you want. The upshot is exactly the kind of social chaos no self-respecting plutocrat should ever let happen on their watch.
Seen this way, defunding education -- especially higher education -- for the middle class and poor was one of the conservatives' most important (and effective) strategies for pulling the plug on the whole postwar progressive project. Best of all: over time, it blunted the influence of that despised class of degreed professionals (journalists, lawyers, accountants, engineers, biologists, etc. etc. etc.) who once aggressively monitored private industry on behalf of the public interest. Without those watchful eyes and ears, it got much easier for corporations to do whatever they pleased.

This essential hostility to higher education is the basic reason that there are now only two avenues left for a smart poor or middle-class kid who wants public help to get through college. The first is to sell your soul. The second is to sell your body.

Sell Your Soul

Soul-selling means taking on private student loans at interest rates so bogglingly high that you'll be up to your to eyebrow piercings in debt until you're 40. Once you're out of school and dragged down by that six-figure debt, they've got you trapped. The only way to afford an education is to sell your ideals for a corporate job you wouldn't have taken in your worst nightmares otherwise.

Sell Your Body

The other way is to demand that you underprivileged brats first join the military and put life and limb on the line in the service of the empire -- an experience that they reckon will make you safe to educate (assuming, of course, that you survive it at all, or aren't rendered senseless by a TBI). You'll be inducted into the military-industrial complex, indoctrinated in the conservative (or perhaps even fundamentalist Christian) worldview, broken of any insurrectionist tendencies, and rendered obedient and disciplined enough that any of that commie-fascist-terrorist liberal arts stuff they'll try to teach you later on at college will be less likely to stick.

What To Do?

This really is a no-brainer. Let's tell the conservatives that their ideas are out of date and wrong -- and then get the government back in the business of investing directly in our kids, and our future.