Friday, July 13, 2012
Peter Schiff: Why the Government Should Not Be in the Student Loan Business: What Could be Done Instead
One problem with the Affordable Care Act was that the Federal Government essentially socialize the Student Loan Industry. Which means when people can't afford to pay back their Student Loans, for example they can't find a job that meets their level of education. So they take jobs that doesn't put them in position to pay back their Student Loans and it isn't the Federal Government. That gets stuck with the bill of people not being able to pay back their Student Loans, its the people who fund government that get hooked for it. At no fault of their own meaning the Tax Payers but when you have banks and the Private Sector in the business of Student Loans and you regulate them properly. People now have choices in where they can go to get their Student Loans and these business's, have to compete with each other for customers, which brings their prices down. Because their customers know they have competition, you let government run the show, now they are in charge of everything and set their own prices. Because they know the people have nowhere else to go.
I'm not with Libertarian Economist Peter Schiff on what I would do instead, just that I agree with him that the Federal Government shouldn't have a complete monopoly. Over the Student Loan Business and the Federal Government shouldn't be involved in this as far as running it. But just serve as a regulator of the Student Loan Industry and perhaps a financier of for people who want to run Student Loan Services. And turn what they are currently doing over to he States to run their own Student Loan Services if they decide to do so as well as Non Profits in the Private Sector. Which would help to lower the costs of the Interest Rates in the students loans, because you would eliminate For Profits running up their rates, just because they believe their is a market to pay them. Making Students Loans unaffordable for a lot of people who actually need them.
The fact is the Federal Government doesn't have all the answers and is certainly not the most efficient organization around. Which means they should really only be in the business of running things that only they can do well and only they should be doing. And Student Loans is not one of those fields, there are much better ways to have college more affordable, then the Federal Government simply running everything.