Would you like a student loan with your health care?

If you think you have a million reasons to oppose Obamacare, you now have one more. Congressional Democrats have included legislation in the health care reconciliation act to takeover the student loan industry.

 In a column that appeared earlier this week in  Minding the Campus, Peter Wood of the National Association of Scholars argues that the temptation to “save” money by foregoing fees and subsidies to private lenders raises many serious questions as to whether the policy is good for students, the nation and higher education. Wood writes:

 But it is not so clear that this plan is good for higher education or good for the nation.  It rests on twin premises both of which seem doubtful: that college is the best choice for nearly every teenager, and the nation will prosper if we can just award enough college diplomas.  I’d like to see a genuine national debate on these matters instead of a rush to put into place—with no debate at all—a financing scheme meant to lock us into that destination.

Direct Lending will turn the majority of college students into clients of the federal government, dependent on the government’s decisions about how much they can borrow and at what rate.  Direct Lending at the same time will solidify the government’s role as the main patron of the colleges and universities themselves.  The Direct Lending system would create an unparalleled choke point over higher education.  This might sound appealing to those who think higher ed is in need of a good throttling, but it isn’t very likely that the new opportunities to control what colleges and universities do are going to prompt an intellectual renaissance on campus or an end to the spiraling increases in costs. Instead, the choke point will be used to force colleges and universities to scale up and eliminate obstacles to expansion. Obama’s own program, remember, is to double the size of higher education by the end of the decade.   

Direct Lending, like Obama-care, is federal control dressed up to look like rational efficiency.  It isn’t on its face a “single payer” system.  After all, parents can still pay tuition out of pocket or mortgage their houses (if they have any equity left) to meet college bills.  And states can and will still subsidize their public colleges and universities.  Those state subsidies, however, are dwindling—and the cutbacks are sparking riots such as those on March 4, among students who have grown accustomed to thinking cheap college is a right.

Obama’s direct lending proposal makes the federal government essentially the “single payer” for college financing.  Centralizing this function in the federal government gives bureacrats even greater control over colleges and universities. Anyone who thinks this is a good thing  isn’t familiar with the last forty years of higher education in the United States.