As the democratic candidates prepare for the 479th democratic debate, I wanted to know their positions on reforming the scandal that is government support and oversight of student loans. As you may know, we recently learned that college financial aid offices have been steering students towards preferred private lenders in return for payments to the colleges and their financial aid officers. Equally concerning is the fact that college tuition has been rising at a rate far greater than inflation and more and  more students are relying on private loans to finance their education. These private loans and their onerous terms have serious long term consequences on students well after graduation.

Below are two links to excellent articles on the state of private student loans. A couple items that struck me:

The federal government guarantees the repayment of private student loans, effectively subsidizes the private lenders at a cost far greater than if the government made the loans itself.

Provisions of the recently passed bankruptcy bill mean that individuals who declare bankruptcy must still pay back their student loans. The credit card industry also successfully lobbied to get a similar provision for credit card debt included in the bill.

Here are the links:

http://www.newyorker.com/talk/financial/2007/08/13/070813ta_talk_surowiecki

http://www.nytimes.com/2007/06/10/us/10loans.html?ex=1339128000&en=5c61dde21f9202ed&ei=5088&partner=

Not surprisingly, all of the candidates talk of “strengthening” education and creating “opportunities” for students, but most have few specifics. The following is brief overview of the positions of the front runners for the democratic nomination. Anyone who is concerned about fairness, government accountability, and the ability of any individual to obtain the level of education they are capable of should be interested in this issue.

On Hillary Clinton’s website under the “Issues” heading for Strengthening the Middle Class it states that as president, Hillary will “Make college more affordable.” Well, I guess that’s a start…

http://www.hillaryclinton.com/issues/middleclass/

Barack Obama’s website goes a bit further it promises to increase federal college aid, free up money for student aid, and protect student borrowers.

http://www.barackobama.com/issues/education/

John Edwards’ website provides the most details, including a proposal to eliminate federal subsidies for private lenders and issue all loans directly from the federal government (despite what “free market” types might tell you, this would actually save the government billions of dollars). Interestingly, the Edwards site was the only one with a “search” function allowing you to easily find his position on the issues.

http://johnedwards.com/news/press-releases/20070511-college-opportunity/index.html