Some of today's government policies make me scratch my head and wonder what they are doing up on Capitol Hill.
College is expensive, and it is important to look at it as the $86 billion business that it is. Students have to ask whether an expensive college education is worth the money.
I have been in college for about five years and have taken out a loan every year; they're going to total almost $30,000. I am part of the 44 percent of students who have student loans. The average student has $27,600 in loans, a total that is more than three times what it was 10 years ago.
For nearly half of all college students, it will take about 10 years to pay off loans.
To get a lower interest rate, many families and college students have decided to consolidate loans. But new legislation makes it so parents can no longer do that. Lenders, therefore, have higher interest rates and make more money.
In this case, Congress saved bankers and not students. Big lenders like Sallie Mae go to Congress and lobby and get them to agree to a 97 percent loan security on loans students have a hard time paying back. If students take out $30,000 in loans and miss a payment, the government gives the lending company 97 percent of the loan - they get that money, the 97 percent interest and compound interest.
Colleges and universities often push unaware students toward these lenders' programs because the schools get incentives in return. In the School-as-Lender program, lenders pay colleges to lead students to their programs.
To keep this up, private lenders went to Congress and lobbied them to agree to this legislation, giving out $2.7 million to congressional candidates. Congressman Chuck E. Schumer received $547,599 in this lobbying, Congressman Richard Shelby received $372,073 and Congressman Chuck Hagel received $88,550.
There may be hope at the end of the tunnel, however: Bill Clinton tried to get every student loan for college to go through the Department of Education. This program would cut out the middle man and the lower interest rates on loans, but the legislation never passed.
The next time you look at loans, the Department of Education may be the place to go.
They can't make a profit off of lending money.
John Turner is a junior sociology major. You can reach him at johnturner@dailynebraskan.com.
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