pageok
pageok
pageok
The Student Loan Market:

Lost in the shuffle among health care cost debates, the future of Fannie and Freddie, Ginnie Mae, the FHA, and so on, the student loan market is quietly shifting to become a federal government monopoly. The Wall Street Journal notes this in an editorial today, September 12, 2009, "The Quietest Trillion." The title?:

The furor over President Obama's trillion-dollar restructuring of American health care has left his other trillion-dollar plan starved for attention. That's how much the federal balance sheet will expand over the next decade if Mr. Obama can convince Congress to approve his pending takeover of the student-loan market.

The Obama plan calls for the U.S. Department of Education to move from its current 20% share of the student-loan origination market to 80% on July 1, 2010, when private lenders will be barred from making government-guaranteed loans. The remaining 20% of the market that is now completely private will likely shrink further as lenders try to comply with regulations Congress created last year. Starting next summer, taxpayers will have to put up roughly $100 billion per year to lend to students.

The private student loan market has been around for decades, so a natural question is how did it come to this? According to the Journal's editorial:

For decades, loans carrying a federal guarantee have been the most common way of borrowing for college. After raising money in the private capital markets, lenders made the loans, paying a fee to the government for each one. The government covered most of the cost of defaults while allowing the private lenders to make a regulated return.

The system broke down after Congress in 2007 legislated a return so low that no private lenders could make money holding these assets. To keep the money flowing to student borrowers, the government began buying the loans from private originators last year. But this larger federal role was intended to be temporary, with an expiration date next summer. The news from Washington now is that rather than scaling back federal involvement, the pols want the U.S. Department of Education to be the exclusive banker to America's college students.

Again according to the Journal editorial, the problem of having the government become the direct lender is that student default rates go up drastically - even though under current law, student loans are not, for example, generally dischargeable in bankruptcy. There are other questions not addressed in the WSJ editorial - how does the federal government plan to repackage those loans, and do what with them? If the credit quality deteriorates, is the federal government on hook not just for the unpaid student loans but for any losses on downstream securities based on them?

The government has been claiming lower default rates than private lenders, but most government loans have been to students at four-year colleges. The private lenders have serviced a higher percentage of students at community and two-year colleges, where defaults are more common regardless of lender. If the feds are now making and owning all such loans, expect default rates to soar. When the government hires contractors to collect on its loans, it pays them for simply calling the borrower, regardless of the result. Private lenders, on the other hand, make money from a performing loan and have a greater incentive to do careful underwriting and aggressive collection. The government will nonetheless start spending these illusory "savings" immediately, and this spending is certain to top official estimates.

This has been a topic of discreet discussion at universities among senior administrators, I think we can safely assume. How could how students pay for school not be? Mostly staunch Obama supporters, in my experience, these administrators and university leaders nevertheless have a strong suspicion that the federal government direct supplying university tuition funds will be followed by interventions in university management. Starting with price controls on tuition - it is not exactly a secret that subsidies aimed to aid student tuition bills largely wind up in school hands as tuition increases. Discussion among university administrators I know has centered on how to diversify revenue streams on the assumption that the federal government will try to control costs at the universities, in part to make up for losses by defaulting ex-students (or by defaulting ex-students at other institutions, such as two year colleges or technical schools where default rates are far higher; some of the issues here are akin to the insurance pool issues of health care reform, such as pooling of otherwise sharply different risk pools). (cont. below fold)

(show)

Curious 2L:
Maybe I understood the market incorrectly, but I thought the private lenders had no risk in these loans. The fee they pay to the government is paid by me as an origination fee. And if I default, well the government will pay them the guarantee and then come after me anyway. So how is it different to just cut out the middle man?

Also, isn't the market pretty much owned by sallie mae anyway? So who are these private banks you talk about and what was their market-share? Cause I was under the impression they were minuscule.
9.12.2009 1:32pm
Kenneth Anderson (www):
Curious 2L: I'll try to post up some links later, but it might be a little while as I have to go now to a ... law school faculty retreat! where we promised to de-internet. Meanwhile, if anyone has some useful background sources, I'd be interested in them as well ...
9.12.2009 1:35pm
martinned (mail) (www):
Here's an article from the New Yorker explaining how mind-bogglingly inefficient the student loan market used to be. Here's the kicker:


President Bush's 2007 budget shows, for instance, that it's four times as expensive for the government to subsidize and guarantee private loans as for it to issue those loans itself.
9.12.2009 1:45pm
Curt Fischer:

Starting with price controls on tuition - it is not exactly a secret that subsidies aimed to aid student tuition bills largely wind up in school hands as tuition increases.


But price controls on tuition will mostly help...the rich, those rich enough to have to pay the face value of their tuition bill in full, without financial aid or loans. And it will hurt middle-man loan repackagers and adminstrators who now can't get as large a piece of the pie. Also to be hurt will be the universities themselves, who can't jack up tuition, hand out financial aid to everyone, and reel in extra federal student aid dollars as a result.

I have a hard time getting worked up about federal intervention in education, because, well, they have always had quite a presence in this area. I guess there's an argument that more governmental meddling will only make things worse, but it's not like the government is poised to start messing around with this virgin, laissez faire market for the first time in history. It seems more a matter of degree rather than kind.
9.12.2009 1:45pm
Anon21:
I have read a couple articles in recent years suggesting that the cost of higher education is rising without any regard to the quality of the product delivered, and that price signals in higher education are so distorted that often, an increase in price actually attracts more "consumers." This latter effect apparently plays off the common perception that higher-priced schools are more prestigious. Under these conditions, and given the importance of access to quality higher education as a public policy issue, I think a reasonable case for government intervention in the higher education market in a more systematic way could be made.
9.12.2009 1:47pm
Blue:
First off, let's be clear--this is ONLY going to affect the government-guaranteed portion of the student loan industry. The truly private loans that students in private institutions and grad schools are NOT government-guaranteed and are NOT affected.

The Direct Loan program operates functionally the same as the private Stafford unsubsidized/subsidized program, at least as financial aid officers are concerned. The DL program does not "repackage" loans--the administration of repayment is handled by the Feds. This is actually a great benefit to student borrowers since there are no confusing sales of their loans through their repayment years.

If DL gets pushed lower into the community college systems, it is possible that will lead to a rise in default rates...but colleges watch those like a hawk because if they get too high they'll lose all of their Title IF funding (e.g., Pell) which would kill them.

In any event, the real push for intervention in colleges--public ones at least--will be from the states that provide the lion's share of their funding, rather than the Feds.
9.12.2009 1:49pm
Blue:
Martined, you are exactly correct--the pre-2007 student loan program was appalling. There were cases bordering on the criminal where loan companies would pay kickbacks to universities to promote their expensive guranteed loans over better options.
9.12.2009 1:55pm
Cash (mail):
Having paid off my student loans years ago and not having kids myself, I no longer pay much attention to this.

But I'm under the impression that having the feds run the program -- one way or another it's finally all federal money -- is far more efficient than having banks involved.

And I seem to recall reading how university student loan officers were getting kickbacks to steer students toward certain private lenders and away from the cheaper federal program.

Sorry, but the private sector hasn't covered itself in glory on this one.

Involving banks without forcing them to bear risk means taxpayers are paying above-market rates for paper shuffling the feds are more than capable of doing at lower cost.
9.12.2009 1:55pm
A.:
Further federal intervention in the student loan market will lead to further degradation of education quality and more screwed students.

The purpose of all governmental intervention in education is to increase the number of students, but we already have too many students. A huge proportion of college grads get jobs unrelated to their degrees, and a huge number of jobs require college degrees unrelated to the work. This means that lots of people who have nothing to gain from their education besides a degree are going to college, goofing off, and lowering the mean to which all classes are aimed. A college degree isn't what it used to be, and costless access is one of the reasons.

What's more, federal loan rates no longer beat private loan rates. Staffords are fixed at 6.0 undergrad/6.8 grad. Grad plus are at 8.5 (all fixed). Private lenders are and have been giving out loans around prime + 1 or LIBOR + 3.75, i.e., variable-rate loans at about 4% with no origination fees. Granted, those aren't available to all students, but all the best credit risks are getting rates like that, so the federal borrower pool self-selects to the worst credit risks. Once federal loans were divorced from credit history, default rate increase likely became inevitable.
9.12.2009 2:05pm
Blue:
Er, a fixed 6 is a heck of a lot better note than prime + 1...and the federal loan has all sorts of provisions for deferment and forbearance that the private note won't have.
9.12.2009 2:11pm
Laura(southernxyl) (mail) (www):
I would like to see prospective students and consumers of student loans furnished with salary surveys showing what people who majored in their chosen areas of study have ended up making one, five, ten years out. All of them, not only the ones who went on to advanced degrees or found work in their field. I don't know how that info could be collected, sadly.

Yes, salary surveys are out there and people should look at them, but from my observation many don't. They end up with ridiculous amounts of debt (one person I know has six figures for a master's in choral conducting) and no real prospect for paying it off. Other than parents, I don't know who puts the skids on for people like this and says that the arithmetic just doesn't make sense. All of the pressure is the other way. The schools certainly aren't going to turn down anything they can get.
9.12.2009 2:11pm
A.:

Also, isn't the market pretty much owned by sallie mae anyway? So who are these private banks you talk about and what was their market-share? Cause I was under the impression they were minuscule.


Private banks that give decent rates include J.P. Morgan/Chase, Citi, Discover, PNC, and a few others. See http://www.finaid.org/loans/privatestudentloans.phtml .
9.12.2009 2:15pm
Law Student (mail):
We need student loan forgiveness!
9.12.2009 2:32pm
Blargh:
Keep government out of our MedicareStafford loans!
9.12.2009 2:38pm
A.:

Er, a fixed 6 is a heck of a lot better note than prime + 1...and the federal loan has all sorts of provisions for deferment and forbearance that the private note won't have.


How's that again? Prime's at 3.25; Prime +1 is 4.25. The average prime rate over the past year is 3.521. The average prime rate over the past eight years is 5.534, and that includes a full year of crazy-crazy 8.5 prime. You've got to think that the economy's going to blow up soon to think that prime + 1/no fee does worse than fixed 6 in the short run (and there's no real point in imagining we can predict the long run).
9.12.2009 2:42pm
3l:
Blue: I don't think you have any idea what you're talking about. Grad students, and those in private institutions still get gov't guaranteed loans. About the only reason that anyone takes out private, non-guaranteed loans is if they are attending a for-profit univ. (Univ. of Pheonix or the like), if they are attending a trade school that doesn't offer any sort of accredited degree, or if they need/want far more money than the formulas think that they need (also pretty rare).

My wife is a med student, I'm a law student, and we're both in private institutions. Between us, we have racked up more than 200k in loans, all federally-guaranteed. On top of that, I can't think of a single classmate with any private loans. Maybe some of the foreign students...

As far as I'm concerned, I think it's fine if the gov't takes over the industry. I have a good lender, a state-chartered private-non-profit that makes my loans for me, but they really do act as a middleman. They have to secure the capital to make the loan, but they take no risk- I pay an origination fee as part of each loan I take out, and the gov't underwrites the risk. Kind of a racket for those lenders out to make a profit. It's just like any other kind of lending, but without the risk of default to worry about. All you have to do is make your spread.

The reason that Congress decided to make the change to Federal Direct lending was because most of the FFEL lenders raised capital through the bond markets, and when those markets froze up last year, students who were supposed to get loans, who had been approved and all, got shit on at the last minute.
9.12.2009 3:20pm
Blargh:
True, but the issue is can you come up with the extra couple hundred a month when prime does shoot up to 8.5? Even if it averages out over the long run, it's that one year of high prime that gets ya - see, e.g. ARM mortgages...
9.12.2009 3:20pm
Le Messurier (mail):
A.: said:

You've got to think that the economy's going to blow up soon to think that prime + 1/no fee does worse than fixed 6 in the short run (and there's no real point in imagining we can predict the long run).


Well, a large number of economists do believe that the economy (or at least interest rates) are going to blow up "soon". Due to the amount of money we are and will be printing it is almost a forgone conclusion that interest rates will rise and rise A LOT. This in order to pay for the debt the US is accumulating. I certainly recall clearly when prime was well into the double digits. and that was thanks to a man who is now deeply involved in the Obama administration. Funding long term debt (student loans) with floating rate money is a fairly risky way of borrowing. I suggest reading your econ 101 text again for more understanding.
9.12.2009 3:24pm
Soronel Haetir (mail):

or if they need/want far more money than the formulas think that they need
(also pretty rare)


At least with undergrad I don't think this is very true. Even in the late 90s parents were already expected to kick in a great deal. And my understanding is that particular element has only gotten worse.

Since when are parents /supposed/ to be resposible for paying for their kid's post HS expenses? I know one person just entering undergrad who managed to beat that because she had spent a year in foster care.

All of this just ties back to the idea that tuition keeps going up because the loans are available. And I don't see it getting any better since we are now requiring teachers to have master's degrees. And why exactly does social work etc require such education yet pay crap? Or the example above of choral direction, that is just nuts.
9.12.2009 3:28pm
SuperSkeptic:
The purpose of all governmental intervention in education is to increase the number of students, but we already have too many students. A huge proportion of college grads get jobs unrelated to their degrees, and a huge number of jobs require college degrees unrelated to the work. This means that lots of people who have nothing to gain from their education besides a degree are going to college, goofing off, and lowering the mean to which all classes are aimed. A college degree isn't what it used to be, and costless access is one of the reasons.

True.

Martined, you are exactly correct--the pre-2007 student loan program was appalling. There were cases bordering on the criminal where loan companies would pay kickbacks to universities to promote their expensive guranteed loans over better options.

Truer! Some state A.G's began to address this problem, but not enough of them and certainly not to the extent that they can/should.

And I would caution everyone out there to check their private lender's contracts with regard to the "6 month grace period" after school but before repayment begins because some of them place an affirmative duty on you to specifically alert them when you re-enroll in grad school or law school as opposed to the undergraduate institution "rolling you over" so to speak (as the undergraduate institutions will tell you they have done for you). This could happen such that you are faced with the absurd situation of collection agencies calling you (or your mother) to collect undergraduate loans for lenders who were currently lending you money for law school. One could even get juiced $4,000-$6,000 on such a "contract" ...

Live and learn
9.12.2009 3:32pm
jdd6y:
I recently took a private loan to cover the 2nd year of an mba program at libor +0. That's way better than a stafford at 6.8%, fixed. My law school loans were under the old stafford and consolidated at 3.50%, principle deferred, w/ a 1.25% discount for direct deposit and 36 payments made on time (now that is a great loan absent deflation). Libor may go up but it will take years for that to happen (to get beyond 6.8%). If that happens, wages will probably spiral up do to the same inflationary pressures, enabling one to either pay off the loans or refinance them. 6.8% fixed (plus fees) is borderline usurious.

I don't know why the government is involved at all absent some family means testing for college students, only. Poor kids should be able to borrow to go to community college and then public schools (not private schools, let them use their endowments). Grad school should be worth it enough to where banks will make loans (particularly when even the private loans are non-dischargeable in almost all circumstances).

Subsidizing the students, as someone pointed out, is really just a professorial subsidy. Considering how little output most tenured profs really put out, many are paid far too much compared to what a free market would bear. They could make enough consulting to teach for free in many instances. Free overhead and free student workers -- how can McKinsey compete?
9.12.2009 3:34pm
Blue:
3L, many students in private institutions hit caps on government-guaranteed loans which force them to go into the private loan market for the remainder of the amount required to meet their need.

http://www.salliemae.com/get_student_loan/ find_student_loan/grad/grad_student_loans/stafford/

Note the lifetime limits:
$31K undergrad
$138K graduate

It's quite easy to bust those caps at private schools.
9.12.2009 3:42pm
ArthurKirkland:
State and federal student loan programs (complementing grant programs) seem the best course. Moving toward loans instead of grants, arranging repayment by percentage of income, requiring participating institutions to disburse endowment funds, and similar approaches could be tried, perhaps using states as laboratories.

If a government program every becomes half as bad as the subsidized-private-lender program has been, reconsideration might be warranted.
9.12.2009 3:42pm
Blue:

I recently took a private loan to cover the 2nd year of an mba program at libor +0. That's way better than a stafford at 6.8%, fixed.



You aren't comparing apples and oranges. The deferment/forebearance terms on the government loan will be far superior--and you are also eligible for ICR and public service loan discharge.
9.12.2009 3:49pm
Paul Allen:
It does not get much attention but the "6 in '06" plan enacted bit-by-bit by congress through 2007 bears a strong nexus to the chaos that followed in the financial industry.

1) Fair-return was eliminated in the student loan industry; inducing a panic and collapse.

2) Minimum wage increases that induced waves of unemployment among teenagers of middle-class households and first household income pop that set mortgage defaults rising

3) A massive expansion of corn ethanol subsidies and mandates that drove-up effective energy costs.

The rest of "6 in '06" wasn't enacted so this pretty much became a 1-2-3 punch that rolled the economy and financial sector.
9.12.2009 4:01pm
martinned (mail) (www):

Due to the amount of money we are and will be printing it is almost a forgone conclusion that interest rates will rise and rise A LOT.

Maybe you want to go and ask those economists again...

An increase in the supply of money leads to an increase in interest rates how? (Remember: interest is essentially the price of money.)

As for inflation, well, that depends. The new money that is being created at the moment mostly doesn't even end up in the money supply at all. (i.e. not in M1.) Even if you use a wide enough definition of the money supply (M2, M3) to include these amounts, the addition to the money supply is more than made up for by a decrease in the velocity of money. (In normal English: the banks are keeping this money in their pockets instead of lending it.) Which is why inflation is near or below zero at the moment.
9.12.2009 4:06pm
martinned (mail) (www):

The rest of "6 in '06" wasn't enacted so this pretty much became a 1-2-3 punch that rolled the economy and financial sector.

Good to know: the current recession is the Democrats' fault...
9.12.2009 4:07pm
Le Messurier (mail):

An increase in the supply of money leads to an increase in interest rates how?


The more money we print the less desirable it becomes, and the higher interest rates must go in order to sell our debt.
9.12.2009 4:35pm
road2serfdom:
Good to know: the current recession is the Democrats' fault...

Good point, Democrats did control the House and Sentate in 2007 (and 2008).
9.12.2009 5:44pm
Anon21:
road2serfdom:

Good point, Democrats did control the House and Sentate in 2007 (and 2008).

Yes, and by veto-proof majorities, as I recall. All Republican President George W. Bush could do was sit and watch as the Democrats made a bunch of sub-prime mortgages and forced his Treasury Department to let Lehman Bros. crash and burn. That poor, brave, victimized man.
9.12.2009 6:04pm
Anon21:
Above should be "made a bunch of sub-prime loans."
9.12.2009 6:05pm
byomtov (mail):
Due to the amount of money we are and will be printing it is almost a forgone conclusion that interest rates will rise and rise A LOT.

This is dead wrong. Inflationary expectations are very low. The yield on the 30-year Treasury is barely over 4%, and the 10-year yield is under 3.5%. If that tells you anything, it's that the market does not anticipate an outburst of inflation. See Bloomberg for details.

An increase in the supply of money leads to an increase in interest rates how?

An increase in expected inflation increases rates because it means lenders expect the value of the money they will be repaid with to decrease more rapidly. As we have seen, however, the market does not expect an increase in inflation. If it did we wouldn't be looking at those kinds of rates.
9.12.2009 6:24pm
martinned (mail) (www):

The more money we print the less desirable it becomes, and the higher interest rates must go in order to sell our debt.

I don't even know where to begin to explain how wrong this is. I think I'll leave it to wikipedia: Fisher's Equation. Feel free to let me know when you think you understand that one, and I'll give you a second one.
9.12.2009 6:31pm
Stash:
Seems to me this a boo-hoo for the passing of a gravy train and corporate welfare. If the government is going to finance education through lending, then providing a riskless if "regulated" return to banks seems unnecessary. I question the unsupported statement "a return so low that no private lenders could make money holding these assets." Starting in 2007? So no private student loans have been made for 2 years? And since when is a virtually riskless return of 6% so bad? I'd like to sign up for that. As for private banks' "careful underwriting": (a)what 18-year old has a credit history, and (b) given the guarantee, why should banks care? Indeed, in the same piece, it is stated that banks--not the government--are the ones making the high-risk loans.

As for aggressive collection efforts, this is a hoot. There had to be Fed Regs promulgated so that banks actually made an effort to collect a delinquent loan before turning it in for the guarantee. It seems that the WSJ has suddenly lost its ability to assess the effect of financial incentives. Why spend any real effort on collecting or working out a problem loan when you can just bill the government for it and move on? Banks' collection efforts are designed to comply with the regs. They have been caught faking documentation that they engaged in those efforts. Why would one expect them to make any effort beyond the minimum required to get a check?

As for ability to collect on problem loans, due the guarantee this is already the government's problem. Banks got the return on the good loans, and got rid of the bad. The government has numerous methods for collection not available to private creditors: tax refund intercepts, administrative wage garnishment, denial of federal contracts and grants. In addition, student loans are effectively nondischargeable in bankruptcy and there are no statutes of limitation. Most professional licenses can revoked for "willful failure" to pay a student loan. If it has to, the government could take a defaulted loan (with interest) out of social security when the student retires. There is no escape from student loan debt. And if you think that the government is shy about collections, I have three letters for you: I.R.S..

As for the regulatory boogie-man, hello, the government already places restrictions on schools that want their students to be eligible for guaranteed student loans. One of the most notorious ones, that for-profit schools seem unable to live with, is not to pay recruitors a commission based each student snagged. But maybe, just maybe, if the government received a return in addition to footing the losses, they would have less reason, not more, to more closely regulate schools. The government already pays the piper. Why pay a back-up band as well?

And when, may I ask, did the WSJ start favoring the distortion of capital markets? Guaranteeing student loans clearly draws capital away from better risks and business lending. If the WSJ is correct, we are talking $100 Billion in private capital being directed away from more productive uses.

True, the government will have to come up with the capital instead of merely budgeting for defaults ("subsidy rate") and paying the interest during the student's attendance and other deferments. That expense is simply gone, and, I suspect, it is much higher than the T-Bill rate at which the government can borrow it instead. Shouldn't budgetary judgments be based on net effects? The government is unlikely to operate as efficiently as private lending, but if it comes anywhere close to breaking even from repayments on student lending we ought to throw a party.
9.12.2009 6:43pm
ChrisTS (mail):
Cash:
But I'm under the impression that having the feds run the program -- one way or another it's finally all federal money -- is far more efficient than having banks involved.

There is an efficiency factor not considered by many outside of higher ed: the colleges and universities already have the staff to do all the form-filing, counselling, and student-record auditing, etc., that surrounds financial aid. BUT, currently, these folks are working with a variety of financial institutions, each of which has its own idiosyncratic demands, and this means a lot of time is wasted on moving the same data around to fit differing requirements of lenders.

If the Feds take it all over, there would be far less messiness - hence cost - to the institutions that must keep track of their students and their students' aid arrangements.
9.12.2009 6:58pm
ChrisTS (mail):
A.:


The purpose of all governmental intervention in education is to increase the number of students, but we already have too many students. A huge proportion of college grads get jobs unrelated to their degrees, and a huge number of jobs require college degrees unrelated to the work. This means that lots of people who have nothing to gain from their education besides a degree are going to college, goofing off, and lowering the mean to which all classes are aimed. A college degree isn't what it used to be, and costless access is one of the reasons.


Hmm. Well, the disjunct between later employment and 'degree' is not necessarily a terrible thing. A liberal education, in particular, prepares people for a whole range of careers - an especially good thing in a world of rapidly changing employment needs.

Secondly, that colleges and universities have students who are just goofing off is hardly a new phenomenon. What is different is that this group is no longer limited to the 'gentleman's' demographic. Of course, there may be more slackers in higher ed these days. But, at least one plausible explanation for that is that too many young people confuse 'getting a degree' with 'becoming better educated.'

Finally, higher ed access is never is 'costless.' Not in this country.
9.12.2009 7:05pm
ChrisTS (mail):
Laura:

Other than parents, I don't know who puts the skids on for people like this and says that the arithmetic just doesn't make sense.

But, once someone is out of college and is, presumably, at least 21 years old, who should put the skids on that person's decision to go to graduate or professioanl school and incur debt while doing so?

In my field, the norm is to tell undergraduates that they should not go to graduate school unless (a) they can pay for it as they go, or (b) they will get sufficient support from some program so they need not go into debt. The latter is not possible in all fields, of course.

But other than advising people to be leery of debt, what ought anyone else to do? Perhaps your friend getting the music degree chose to risk that indebtedness to pursue something s/he really wanted to do. We don't want the government or the schools saying 'No, you may not,' do we?

However, I have to say, how anyone could run up a 6 figure debt getting a masters in anything is beyond me. (Unless, it includes the undergrad costs?)
9.12.2009 7:13pm
ChrisTS (mail):
P.S. Laura:

You are correct, the data is 'out there,' but it is hard to get people to look at it. If they did, they would discover that B.A. grads in Philosophy - that most 'impractical' of fields - end up doing much more nicely than the accountanting and business majors. (Yay!)
:-)
9.12.2009 7:17pm
Mac (mail):

But price controls on tuition will mostly help...the rich, those rich enough to have to pay the face value of their tuition bill in full, without financial aid or loans



Must disagree to some extent. My daughter, a late bloomer, earns 22,000 per year, yet must pay full tuition, at ASU. Tuition has, I believed, about doubled in the last year or two due to reduced subsidies from the State. Tuition alone is around $10,000 per year and that does not include fees and text bookks. I do not know how they figure that someone who earns 22-24 thousand per year can pay 10,000 out in tuition and still support themselves. The Az Constitution states that tuition must be "as near a free as possible". (I am paraphrasing here.) I do wonder why we give Universities all this tax money when they can't think of a single solution to a reduction in funds than to double tuition.
Also, many people return to college in later years to improve their economic condition either because they did not go to college or they did and found out they chose completely worthless degrees.

If there is a tuition reduction, she and others who must rely on student loans, would have a better chance of graduating without owing far more than they can probably ever pay off.
9.12.2009 7:18pm
Geoff (mail):
I'm with the majority of commenters in deriding this objection as a hand-out for private companies (the government guarantee provides a riskless - and pointless - return for lenders), but wanted to make one more point:

Mr. Anderson writes that "[a]gain according to the Journal editorial, the problem of having the government become the direct lender is that student default rates go up drastically." I can't find support for that in the editorial.

In fact, the editorial says,
"The government has been claiming lower default rates than private lenders, but most government loans have been to students at four-year colleges."
The WSJ argues that this is deceptive given the fact that most defaults occur in other types of institutions, which may be true, but certainly doesn't support the poster's contention. The editorial does assert that default rates are "certain" to soar if the government moves ahead with its plan, but obviously that isn't borne out by the current evidence, and none other is provided. A simple contention that the private sector is always better than the public just doesn't apply in this instance, given the facts at hand.

I would love to see someone make a principled argument for the government to continue to guarantee private loans through other companies (I can understand an argument to have the government stay out of the market entirely, but that's not the WSJ position). I haven't seen it yet.
9.12.2009 7:20pm
ChrisTS (mail):
Subsidizing the students, as someone pointed out, is really just a professorial subsidy. Considering how little output most tenured profs really put out

Sigh. Right, all those highly paid professors who 'produce' nothing.

many are paid far too much compared to what a free market would bear.

This claim is based on ...what? If your thinking is that student loans mean the relevant market is not free, would you also claim that mortgages, credit lending, etc., mean the relevant markets are not free?

They could make enough consulting to teach for free in many instances.

???? No doubt this is true for a handful of fields, but not for the majority.
9.12.2009 7:23pm
ChrisTS (mail):
oops: accountanting should be accounting. Got too excited by the data.
9.12.2009 7:24pm
ChrisTS (mail):
Somewhere up thread, someone made the point that prospective students and their parents often succumb to the 'if it's so expensive, it must be good' syndrome. This is correct.

Unfortunately, they also succumb to the 'I need a single room with a private bath, and a huge workout space with television and all the latest machines, and a food service that is open 24/7 and serves sushi' syndrome. (Not to mention the 'I cannot get up before 10 and I must be done with those silly classes by 4 for my athletic committment' syndrome.)

Much of the rise in tuition in recent years has been driven by the competition to offer luxury accomdations and facilities. Of course, there have also been the pressures to add all the latest technologies, provide support for every variety of disability, and pay for everymore expensive equipment for labs, etc. Still, the portion of any college's expenses that are going to offering a lifestyle rather than an education is troubling.
9.12.2009 7:32pm
ChrisIowa (mail):
Chris TS

Unfortunately, they also succumb to the 'I need a single room with a private bath, and a huge workout space with television and all the latest machines, and a food service that is open 24/7 and serves sushi' syndrome.

You forgot the car.
9.12.2009 7:35pm
ChrisIowa (mail):
Why is it that Colleges and Universities do not invest parts of their endowments in their own student's student loans?
9.12.2009 7:38pm
Mike McDougal:
There are too many crappy schools out there. The loan guarantees should be eliminated so that market forces can prevail and force horrible schools out of existence and eliminate distorting subsidies. Of course, this would require that the loans be private, not public.
9.12.2009 8:18pm
Ak:
Given the near certainty that the government is going to continue to pursue policies to drive college enrollment higher than the "natural" state because they view higher college enrollment as a self-evident good thing, I can't really see that much more harm coming from this. And if it does lead to pressure to decrease tuition, then perhaps that will finally inject some sanity into the college market.

I have yet to see anybody suggest that the explosive increase in tuition rates has in any way improved education. At best the argument for it is "Keeping up with the Jones", where the Jones' are the next door college providing jacuzzis and multimillion dollar gyms. So if colleges are unable to control themselves, the federal government should limit what they're allowed to charge students who are going there on federal loans.
9.12.2009 8:28pm
ArthurKirkland:
It's not just the students who succumb to the "single room, private bath" mindset.

A university administrator told me of being called to a room, on move-in day, to confront an outraged parent creating a disturbance consequent to her discovery that there were two beds in her son's room. She apparently had not read (or, at least, understood) the housing contract, nor any of the descriptions of accommodations in brochures or on-line, nor the invoice, nor the letter identifying her son's roommate and encouraging the two students to contact each other before school began -- in her mind, it was inconceivable that her son might be expected to share a dormitory room with another student. She compared it to an expectation that her child would be compelled to share a toothbrush or a pair of undershorts.

He told me he didn't tell her that some rooms hold three students, for fear she might expire on the spot.

(It turned out the family had requested a "double" accommodation rather than a "single" because they thought it meant a larger -- yet, curiously, less expensive -- room.)

He also told me research indicated that plenty of students and parents were influenced by cafeterias and single rooms more than by academics.
9.12.2009 8:35pm
Paul Allen:



The rest of "6 in '06" wasn't enacted so this pretty much became a 1-2-3 punch that rolled the economy and financial sector.

Good to know: the current recession is the Democrats' fault...

Good point, Democrats did control the House and Sentate in 2007 (and 2008).



I do not see the need to devolve into naked partisanship. Policies have consequences. The enacted components of "6 in '06" caused havoc.
9.12.2009 10:20pm
Laura(southernxyl) (mail) (www):
Chris:


But, once someone is out of college and is, presumably, at least 21 years old, who should put the skids on that person's decision to go to graduate or professioanl school and incur debt while doing so?


Correct me if I'm wrong (I'm sure someone will) but if a bank has reason to think that a person won't be able to pay back a loan, and there's no gov't guarantee, so that the bank will be out money if the person doesn't pay it back, the bank would have some motivation to say "I'm not lending you $100K for a degree in choral music." I remember buying a house in 1990 and the hoops we had to jump through to assure the bank that we would be able to pay that loan. At that time the guideline they gave us was to take our annual gross income, multiply by 2, and that was all the house we could afford. Boy, that went away, didn't it? and look what happened.


In my field, the norm is to tell undergraduates that they should not go to graduate school unless (a) they can pay for it as they go, or (b) they will get sufficient support from some program so they need not go into debt. The latter is not possible in all fields, of course.


I would think that if an undergraduate has finished the BS in whatever field it is, and knows that she has an aptitude and a desire for a program that she has a good likelihood of finishing an advanced degree in, AND that advanced degree will definitely handle the debt load, then she should go for it. At 21 a person should be a lot better placed to make that decision than at 18.


But other than advising people to be leery of debt, what ought anyone else to do? Perhaps your friend getting the music degree chose to risk that indebtedness to pursue something s/he really wanted to do. We don't want the government or the schools saying 'No, you may not,' do we?

However, I have to say, how anyone could run up a 6 figure debt getting a masters in anything is beyond me. (Unless, it includes the undergrad costs?)


Yes the 6 figures was the total debt for undergrad and masters, and it was at a small private university. I'm not thinking that the gov't or the school should say "no you may not", I'm thinking that the market should have been allowed to work so that no bank would have lent her that much money that she would never be able to pay back. In all of the counseling that kids get in high school, the financial aid counselors at colleges, the bank people that offer the student to sign on the dotted line, all of the pressure is to act like everybody else and just take it on. Been there with my kid - they promise the moon and the stars. Seriously. (No, she has no student loans. She ended up going to a small state school, on academic scholarships. No prestigious name on the diploma, but a good education (I am in a position to judge) and a j-o-b.)
9.12.2009 10:26pm
Allan Walstad (mail):
[ho, hum...] Another example of government intervention in the market leading to problems that are blamed on the market and serve as the excuse for more government intervention.

Make that "unconstitutional federal intervention."
9.12.2009 10:33pm
theobromophile (www):
State and federal student loan programs (complementing grant programs) seem the best course. Moving toward loans instead of grants, arranging repayment by percentage of income, requiring participating institutions to disburse endowment funds,

Arthur, that's a huge problem (and one that most people don't acknowledge as a potential disaster). While we can all look at Harvard and Yale and know that, with $20 billion (or so) endowments, they could probably give more subsidies, the vast, vast majority of the thousands of colleges and universities in this country lack that option. Forcing them to disburse their endowments could literally bankrupt them.

A lot of endowment spending (or saving) at many schools is used for building. Obviously, buildings aren't updated on a totally regular basis, in which a school can just hand out, say, a million a year and know that everything will keep rolling along. Some schools went through big building phases in the 1960s and need to update or replace all of those buildings at once. Other schools may expand or create a graduate programme that needs an academic hall, graduate student housing, and the like - none of which results in a nice, steady payout by the school.

Furthermore, schools should be less like the federal government (spending a lot during good years and getting creamed during bad times), not more! If schools are saving their endowments during high-return years so that they can offer more financial aid (or at least not find themselves completely underwater) in bad years, more power to them.

Getting the feds involved in telling them how much to shell out each year is a recipe for disaster. Cure worse than the disease, and all.
9.12.2009 10:49pm
David Welker (www):
I find Kenneth Anderson's analysis to be intellectual vacuous in this case, although in the past he has made some decent arguments and I consider him to be above average for a VC contributor.

His lame "slippery slope" argument fails. Since the Federal Government already guarantees private loans, it in fact could use that power to regulate educational institutions and tuition and such already. There really is no difference here, unless the theory is that private lenders would use their lobbying influence (subsidized by taxpayer dollars) in order to convince Congress not to regulate educational institutions. Is Kenneth Anderson really arguing in favor of a pernicious political lobby financed by taxpayer dollars? I don't think so. But if not, there is no reasonable basis for believing that Congress would gain any power over educational institutions that it does not already have.

I don't know why Kenneth Anderson would make such an obviously flawed argument. I guess that is what happens when ideology comes before careful thinking. I think this is also illustrative of the problem I have with slippery slope arguments. People, especially anti-civilization libertarians, think they can make these arguments even when they are obviously implausible upon any amount of reflection.
9.12.2009 10:50pm
Chas C-Q:
No mention so far of the GIVE Act, which would have any students receiving federal "largesse" (meaning, essentially all of them, after this) "volunteering" for Obama's civilian army.
9.12.2009 11:02pm
David Welker (www):
I should point out another thing irritating about this particular post by Kenneth Anderson. And that is the lack of care in talking about the benefits of eliminating the middle man - namely lower costs and an end to certain abusive practices by private lenders.

For example, the case of the law student whose $230,000 debt was turned into a $400,000 when 25% fees were added not once, but allegedly twice, when his student loan was transferred from Sallie Mae to collections. This is basically the sort of thing that Mr. Anderson is implicitly praising when he talks about the wonderful benefits of aggressive collections. Some of us do not think that is a good thing.

Good job in making such a one-sides blog post, Mr. Anderson. It takes a lot of skill to produce such a one-side thoughtless analysis. Good job not even making the slightest effort to explore or educate your readers on both sides.

Finally, it should be noted that there is just no point or using private capital if the government is taking all the risk - it is not as if the government cannot raise adequate capital on its own. As the IRS has demonstrated, the government CAN be a very aggressive collector if we want it to be. As I recall, at one point people recognized the costs of hyper-aggressive collection processes and instituted a taxpayer bill of rights.

Is the theory REALLY that private lenders have a competitive advantage in acting like assholes when it comes to aggressive collections? Because, I believe that is the only argument that Mr. Anderson has going for him.

Oh wait. Private lenders also have an incentive to do more careful underwriting. Such an assertion makes you wonder about what part of the phrase "government guarantee" does the Editorial Page of the Wall Street Journal not understand.

I guess the only place to get good financial news nowadays is the Financial Times. Because the Wall Street Journal has gone straight to hell.
9.12.2009 11:12pm
ChrisTS (mail):
Chris Iowa:
You forgot the car.

So far, they are not asking us to provide a car. But, you are right: they DO demand free parking.
9.13.2009 12:53am
ChrisTS (mail):
AK:

At best the argument for it is "Keeping up with the Jones", where the Jones' are the next door college providing jacuzzis and multimillion dollar gyms. So if colleges are unable to control themselves, the federal government should limit what they're allowed to charge students who are going there on federal loans.


It is unfair and inaccurate to claim that colleges are unable to "control themselves," as I hope my earlier post indicated. Colleges - especially tuition driven colleges without huge endowments - are competing for qualified students. It is the prospective students and their parents who are the source of the pressure to invest in expensive, non-academic, frippery.
9.13.2009 12:58am
ChrisTS (mail):
Arthur K:
He also told me research indicated that plenty of students and parents were influenced by cafeterias and single rooms more than by academics.

Our Admissions and PR people frequently tell us they cannot 'sell' academics as such. At best, they can 'sell' specific programs based on graduates' success rates or cool facilities.

For the past 6 years I have been among faculty trying to revise the general academic curriculum at my college. As far as I can tell, marketablility for the gen ed curriculum comes down to 'cool' structures and fewer requirements. The marketing folks want us to use language such as 'question one's relationship to the natural world' rather than 'understand the natural world' or even 'understand one's relationship to the natural world.'

Why? Well, it makes prospective students feel more comfortable.
9.13.2009 1:05am
ChrisTS (mail):
Laura:
I'm thinking that the market should have been allowed to work so that no bank would have lent her that much money that she would never be able to pay back. In all of the counseling that kids get in high school, the financial aid counselors at colleges, the bank people that offer the student to sign on the dotted line, all of the pressure is to act like everybody else and just take it on

I do not know that the banking market has not been allowed to work in such a way. Rather, I think it has not been prevented from operating in such ways. This might be one advantage of a federal role.

On the other hand, I cannot envision either the market or the government choosing to refuse loans to someone who really wants to pursue some area of study. The former will not because it would mean lost revenue; the latter would not because someone would raise objections to such 'abuse' of state power.
9.13.2009 1:11am
ChrisTS (mail):
theobromophile:
the vast, vast majority of the thousands of colleges and universities in this country lack that option. Forcing them to disburse their endowments could literally bankrupt them.

Thanks for that. I do think wealthy institutions should pony up to provide more aid to students; unfortunately, many excellent colleges and universities are not so blessed. Interestingly, many of the schools with fat endowments have lower discount rates - give less 'back' to students - than those with lesser endowments.

I have to note my own effort to avoid speaking of 'well-endowed' and 'less-endowed' schools. :-)
9.13.2009 1:16am
big picture guy:
what has to be realized as a prerequisite to this conversation is that by placing student loans of any type (private, public, DOE insured or not) out of the relm of bankruptcy, not just for a limited time after school but indefinitely) the government is already intruding FAR into the market

by insuring some lender against default-it goes even further.

so were are deling already with a highly protected and regulated market-in favor of the lenders for the most part (which supposedly helps the borrowers b/c it frees up credit)

on the other hand-it frees up credit for people who shouldn't borrow (like 150k for the basket weaving degree from private expensive school)

so now the lenders want to claim that the government is getting more involved-taking away avenues of lending (whether insured or not) that it only had because of the government in the first place?

here is a not so hypo: private lender insists upon a cosigner-then the principal is killed in an auto accident before graduating (with 150k in debt). loan isnt discharged by debt in the contract and cosigners are on the hook. if they are insolvent-most courts are holding even they cant discharge.

if you think that result unconscionable-it is. but thats only because the private lending market cant handle the risk of the opposite result right..(otherwise competition would create death discharge or cosigner bankruptcy discharge)

if you think ti unconscionable that an unemployed person cant pay because hes unemployed and cant get a deferment because the private lender would rather him default to get default fees and isn't worried about bankruptcy..it is. (but again-the private lenders cant seem to handle the risk)

so options
a) keep things the absurd way they are-with easy no risk to lender credit driving up demand and prices of tuition and spiraling up nondischargeable debt that cant be payed and will go...thus benefiting education and banks at the expense of students and other creditors of the students.
b) regulate private lenders who don't take government guarantees more so that they are not unconscionable-and see if that survives market.
c) kick the private lenders out and use only public options with generous foreberance and deferment and automatic death discharge
d) change bankrupcy rules.

i perfer D.
9.13.2009 7:56am
Laura(southernxyl) (mail) (www):

I do not know that the banking market has not been allowed to work in such a way. Rather, I think it has not been prevented from operating in such ways. This might be one advantage of a federal role.


Maybe I wasn't clear. If the MARKET was allowed to work without gov't intervention, the banking market wouldn't have had any motivation to lend money to people that couldn't pay it back. It would be the market itself preventing the banks from doing this, in the same way that it prevents them from flushing dollar bills down the toilet.


On the other hand, I cannot envision either the market or the government choosing to refuse loans to someone who really wants to pursue some area of study.


I can envision the market refusing loans to someone who really wants to pursue some area of study, but who short of winning the lottery will never be able to pay those loans back. Just as the market used to refuse mortgages to people who really, really wanted and felt that they deserved a $400,000 house but whose income couldn't support that loan.

Big picture guy, this is an excellent reason for parents who cosign loans with their kids to take out life insurance and even disability insurance on those kids. I can't imagine taking on major debt liability in that way and not doing that.
9.13.2009 10:15am
ChrisTS (mail):
Laura:

I understand your point, but think of the credit card industry. It seems to me that banks are often willing to loan money to those who are unlikely to be able to repay. AFAIK, the same was true of the mortgage industry even before the recent bundling and no-money-down nonsense, although banks were probably more cautious in the past.

Also, as I think about it further, I wonder how loan officers might assess the comparative risks of lending to people who want to pursue particular degrees. After all, there are some jobs in conducting, some people make good careers as artists, etc. Would the banks only help out those who already are relatively well off to pursue those areas? Would they try to evaluate an apllicant's talent or ambition?

Finally, note that anyone can apply for a loan to pursue one degree and then, money in hand, switch to another.
9.13.2009 12:04pm
ChrisTS (mail):
Sigh: applicant's.

I need either younger fingers or a voice to text device.
9.13.2009 12:06pm
Laura(southernxyl) (mail) (www):
Chris, I actually am old enough to remember when it was damn hard to get a credit card.


I wonder how loan officers might assess the comparative risks of lending to people who want to pursue particular degrees.


I wonder, too, but it would be nice to see some effort.

There are those who have no sympathy for people who make bad decisions. I have limited sympathy but I do have some. I have it for 18-yr-olds who are just entering the period in their lives when they can't count on adults looking after them. They aren't prepared to make life-changing decisions yet because they've never been in the position of even being allowed to - remember high school, when you had to ask permission to just go to the damn bathroom? All of their friends are getting loans and everybody acts like it's the accepted thing. In their experience, if something is a really bad idea, there's an adult there stopping them from doing it; or at least making them sneak around to do it. I was fortunate as hell with my daughter, that she actually listened to me about things like not letting the credit card companies who started calling her as soon as she turned 18 suck her into that bondage before she had an income of her own or any experience at all in paying her bills. But I imagine a lot of kids would listen if somebody would tell them: you want the school with the amenities, that's going to cost you X dollars a month for the next 30 years. Can't you be a little more Spartan for just a few semesters? So who is telling them?
9.13.2009 12:58pm
Soronel Haetir (mail):

Finally, note that anyone can apply for a loan to pursue one degree and then, money in hand, switch to another.


If the lender were actually taking risks on student loans I would think the contract would specify the major, possibly even the courses, and probably the grades needed each term to continue the loan for the next term. I know a couple people who did employer-sponsored doctorate work under basically that setup.
9.13.2009 3:53pm
Ak:

Colleges - especially tuition driven colleges without huge endowments - are competing for qualified students. It is the prospective students and their parents who are the source of the pressure to invest in expensive, non-academic, frippery.


Well, of course colleges don't spend on useless fancy stuff for themselves, it's to attract students. But the practical result is that they essentially all do it and it is to some extent on society's dime. And it doesn't change the remedy, which is to place some sort of limit what they're allowed to charge students if the school chooses to accept federal loans.
9.13.2009 4:11pm
ReaderY:
Student loans are a form of welfare whose parameters are properly characterized by education policy. Commercial operaters combined with government guarantees creates a toxic combination introducing disruptive incentives causing losses. For example, when the federal government is guaranteeing the loans, it is commercially every bit as profitable to lend to high school dropouts going to cosmetology and dog-grooming schools as it is to lend to students going to Harvard and Yale. After all, if the government's paying, who cares? So long as they can rely on government guarantees, what difference does it make to banks if students ultimately receive any value for the money spent or improve their ability to repay? There's no commercial incentive to lend in an economically rational fashion or in furtherence of educational objectives which presumably the taxpayers are paying for,

The way to introduce discipline and rationality into the system is to have the party that takes the losses be the one making the decisions. The disjunction is what's making the system irrational.

In this case, because student loans are ultimately a government welfare program, the government is taking a loss. So long as this is the case, having the government make the loan decisions results in the most rational and least costly outcome. It ends the disjunction in the most logical way. The one who pays the piper calls the tune.

Libertarians might object to government welfare programs for education entirely, and might want government to stop subsidizing or guaranteeing student loans. This would of course lead us in a different direction. But so long as that's not happening, so long as taxpayers are forking over large sums for subsidies and guarantees, having the government both make the calls and pay the price is simply more rational than having banks make the calls while government pays the price .

Student loans are supposed to be a welfare program for students. Turning it into a welfare program for banks is doing nothing more than siphoning money from productive ends to unproductive ends. It's simply introducing a pure inefficiency into the system. Commercial operators can only be expected to behave rationally when they have incentives to do so. They don't here, so the better outcome ought to be obvious.
9.13.2009 5:29pm
ChrisTS (mail):
AK: I agree, unfortunately no small college wants to be the first to take the step.
9.13.2009 5:48pm
ChrisTS (mail):
Soronel:

I know that employer sponsored programs make these requirements, althought the ones with which I am familiar impose the burden of checking up on the employer itself.
9.13.2009 5:49pm
ChrisTS (mail):
Laura:

I suspect we belong to the same age group. :-)

I honestly do not have the answer. But that kids or their parents should assume the need to go deeply into debt for a BA or BS is just dreadful, in my view.

I teach at a small liberal arts college, my daughter is going to another, and I imagine my son will follow suit.
But very good educations can be achieved at larger public places that cost so much less. Of course, we sell our college's benefits as a 'slac,' and I believe in them. But I would never suggest anyone should load up on debt in order to attend one.

Perhaps one upside of the current recession will be a drop in the willingness of families and young people to incur enormous debt for college.
9.13.2009 5:57pm
ArthurKirkland:
I accept the label of 'welfare program' for student loan programs in the sense of 'advancing the general welfare.'

I borrowed money to fund my education. I now pay substantially more, each year, in federal taxes than I borrowed (and repaid, with relatively low interest) for undergraduate and graduate degrees. A spot at a good school was allocated by merit instead of by parental ability to pay.

That, in my view, is how government should work.
9.13.2009 7:47pm
ArthurKirkland:
I agree with Laura's observation that some compassion for teenagers pursuing an education is appropriate, and that someone reliable should be providing guidance concerning financial decisions regarding a college education.
9.13.2009 7:48pm
Eli Rabett (www):
Fifty years ago, Sherman Barber, then President of CCNY, proposed that college education be free, but that graduates be required to pay a surtax to cover the cost of their education.
9.13.2009 9:23pm
3l:
A belated reply to Blue: In grad school, you're limited to 8.5k in stafford loans per semester, some more than that for medical students. So the lifetime cap can only be reached if you spend close to ten years to get your degree. PLUS loans, which have no cap, lifetime or otherwise, make up the vast majority of the loans that grad students take out.
9.13.2009 9:37pm
Blue:
No, you're confused 3L—-that's the subsidized limit.

http://studentaid.ed.gov/PORTALSWebApp/ students/english/studentloans.jsp
9.13.2009 9:43pm
Soronel Haetir (mail):
ChrisTS,

If it were banking institutions making loans with similar terms, don't you think they would in fact require proof of continued eligibility before cutting the next check?
9.13.2009 11:16pm
ArthurKirkland:

Fifty years ago, Sherman Barber, then President of CCNY, proposed that college education be free, but that graduates be required to pay a surtax to cover the cost of their education.


Such a fine idea, it must have required powerful economic interests, weak ideology and poor decision-making to avoid implementation.
9.14.2009 12:46pm
maggy08 (mail) (www):
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Susan

http://pay-dayadvance.net
9.14.2009 11:46pm

Post as: [Register] [Log In]

Account:
Password:
Remember info?

If you have a comment about spelling, typos, or format errors, please e-mail the poster directly rather than posting a comment.

Comment Policy: We reserve the right to edit or delete comments, and in extreme cases to ban commenters, at our discretion. Comments must be relevant and civil (and, especially, free of name-calling). We think of comment threads like dinner parties at our homes. If you make the party unpleasant for us or for others, we'd rather you went elsewhere. We're happy to see a wide range of viewpoints, but we want all of them to be expressed as politely as possible.

We realize that such a comment policy can never be evenly enforced, because we can't possibly monitor every comment equally well. Hundreds of comments are posted every day here, and we don't read them all. Those we read, we read with different degrees of attention, and in different moods. We try to be fair, but we make no promises.

And remember, it's a big Internet. If you think we were mistaken in removing your post (or, in extreme cases, in removing you) -- or if you prefer a more free-for-all approach -- there are surely plenty of ways you can still get your views out.