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College Subsidies Become "Entitlements" On Fox

Reported by Ellen - September 21, 2009 -

Guest blogged by Brian

On Saturday's Forbes on Fox (9/19/09), the panel discussed President Obama's plan to make college affordable for all by revamping the college loan program. Sure enough, It wasn't long before the "S" word was thrown around and the loan program was being made to sound like welfare for college students. With video.

Steve Forbes, son of Malcolm Forbes, who didn't have to worry about paying for college (or anything else, in all likelihood), said "Over 10 years, this will add another trillion dollars to government liabilities… The idea that the government can do anything more efficiently than the private sector, even if subsidized, well just look at Fannie Mae, Freddie Mac and the Amtrak."

Forbes continued, “This is part of Obama’s plan to make college education another entitlement, a freebie in the next few years. Very nice, but unaffordable.” Maybe Forbes doesn’t realize it but school has become unaffordable for lots of students already. And the "freebie" obama is proposing is a loan.

Quentin Hardy said, "Boss, I’m sorry, but I'm bugging on this one. Look, we valued higher education, we thought poor people should have access to it… We gave a whole bunch of money to the private sector to make student loans. They then bungled them, and leveraged them, and traded them from Chicago to Warsaw, and made a mess of it. We're talking about cutting them out of it, and giving the loans directly to students. To me that's cutting out a couple of layers of waste and fraud and bureaucracy, net good."

The "s" word came first from panelist Bill Baldwin. "The trouble with you, Quentin, and your socialist friends is that whenever you see something big you want to nationalize it."

Hardy said, "Yeah, like free elementary education."

Evelyn Rusli said, "They (the government) are the lender of last resort… When we give these subsidies to lenders, that’s a huge amount of waste right there. This reform will actually cut that out. About $87 billion in savings that will actually go to paying loans for other students who are low income, for example. That’s actually helpful for the system… Subsidies are not always evil.. The government’s role in student loans has been enlarging since this past year.”

Hardy said, "The US Postal Service sends a letter for 45 cents, what does Fed Ex charge?"

Baldwin replied, "Well, I think the service is a little bit better at Fed Ex."

Asman said, "Fed Ex doesn't lose money the way the Post Office does."

Hardy said, “If they (the Post Office) charged twelve bucks a letter, they’d make money and you’d complain about them.”

Forbes came up with the explanation that college costs are going up rapidly “because we’re subsidizing it. We’re hurting students, not helping them.”

Tell that to a middle class family struggling to figure out a way to pay for college, who may now find an easier way, because the bill is likely to pass.”