Your Opinion: Student loans not responsible for federal debt

Tony Smith

Jefferson City

Dear Editor:

When I returned from Vietnam, I used the GI Bill to complete a master’s degree. Education was treated as an economic building block. Today it’s a commodity.

A recent letter (5-14-2019) alleged an alarming increase in federal debt which was blamed, as usual, on President Obama. Student loan debt requirements were changed in 2010 which the writer claimed quickly increased student loan debt by 450 percent. This was said to cause the federal debt to balloon. Not so.

The federal government guarantees some student loans which are serviced by independent and private sources of money. This is like federally backed FHA home loans. When there is default, the federal government pays the lender.

Can such a system be gamed? Yes! In 2017 Betsy Devos loosened consumer regulations protecting student borrowers. This caused some states to try and crack down on abusive lending practices in their states to protect their citizens. The Trump administration joined a lawsuit by the Student Loan Servicing Alliance, an industry trade group, trying to thwart the states from blocking abusive practices. The Trump administration has tried to remove many consumer protections, which put you and I at greater risk.

Government-issued or government-insured student loans for tuition at for-profit universities are the biggest scam. Think of Trump University. Many of these schools offer little of value to students. The loan default rate here is up to 40 percent. By removing consumer protections and ensuring the for-profit university will be paid, this is like food stamps for these schools. Taxpayers get nothing from this.

Conservatives have turned on public education. Some want to be sure their children receive religious indoctrination. They use parochial schools or home schools. Others like Missouri billionaire Rex Sinquefield call public schools a form of slavery. Libertarians hate supporting anything with their taxes that benefit the public.

These views have helped foster education as a commodity. Think of charter schools which exist to make money. This year the GOP Missouri Legislature is trying to extend charters beyond KC and St. Louis. On average these schools do not improve education.

Being old fashioned, I support education as an economic building block. Good schools are one key factor to corporations relocating. Good education is an investment in our communities and the future.