Best Business Commentary
Student lenders are finally facing some well-needed scrutiny, says Michael Kinsley in Slate. The student loan bill “will do little to curb the cost of college,” says John Wasik in Bloomberg.
Borrowing for college. And borrowing . . .
Student lenders are finally facing some well-needed scrutiny, says Michael Kinsley in Slate. The “student loan ‘industry,’ as it is comically referred to in the newspapers,” wouldn't even exist if the government didn’t give it “free money.” Most federal borrowing, including a government student loan program, carries interest rates of 3 or 4 percent. But the government guarantees and “pays part or all of the interest” on private student loans that charge 7 or 8 percent. It took a kickback scandal, but Congress “passed a bill substantially reforming the student loan program” and cutting subsidies. “It is what any levelheaded businessperson would do.”
The student loan bill “will do little to curb the cost of college,” says John Wasik in Bloomberg. If you want to understand “why business has been great for the $85 billion college-loan industry,” look as the soaring cost of college. The record “35 percent surge in inflation-adjusted tuition and fees since 2001-2002” is mainly due to two things: “greater demand” for a college education and “little resistance” from families facing “ever-loftier” bills. If you need to borrow, the federal government offers the best deals on loans. But incredibly, nobody—not private lenders, not Congress—will help you find the best loan package.
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
MOST POPULAR ON THE WEEK
- Why China's Communist Party is headed for collapse
- How to make perfect fried rice in 6 easy steps
- Obama doesn't have a manhood problem — but conservatives certainly do
- Why Antonin Scalia was right to defend a drug dealer
- He said he was leaving. She ignored him.
- 31 TV shows to watch in 2014
- Why we need a maximum wage
- 10 things you need to know today: April 23, 2014
- Why Mindy Kaling — not Lena Dunham — is the body positive icon of the moment
- Why atheism doesn't have the upper hand over religion
Subscribe to the Week