If there was one thing Glenn Beck hated (except for that time he was for it) it was the bank bailouts. That's why it's been so surprising to hear him rail against the student loan reform bill that was included in the health care reconciliation package. According to Beck, Student Aid and Fiscal Responsibility Act, or SAFRA, would amount to the government "taking over" education, meaning "[y]ou are not going to get any private dollars for education." Sounds scary:
In reality, the bill eliminates the Federal Family Education Loan (FFEL) Program, which currently allows banks and other lending institutions to issue student loans that are insured by the federal government. In other words, the lending institutions make money from the interest they charge students, but if a student defaults, the government picks up the tab. So, it's not as if the banks that handle federally guaranteed student loans are currently operating in a private free market.
If that weren't enough corporate welfare, in FY2008, several FFEL lenders found themselves unable to secure private investors and actually borrowed from the Department of Education in order to keep issuing student loans. That seems like a bailout Beck would have opposed.
The SAFRA bill simply cuts the middle man and issues these federally backed loans directly from the Department of Education. As CBS News' Stephanie Condon noted, SAFRA "would slash subsidies the government gives loan companies like Sallie Mae," and "would save the government billions of dollars."
Furthermore, contrary to Beck's suggestion that the bill will eliminate private lending, Private Education Loans will still be available to students who need such loans to cover their full tuition and other costs of attending school.
Why is Beck opposed to a program that saves money and is the antithesis of a bank bailout? Is this going to become something else Beck has to deny he ever said?
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