The Corner

Education

The Government’s ‘Predatory’ College-Loan Program

Leftists usually reserve the word “predatory” for private lending they don’t like, especially quick “payday” loans. But did you know that the feds are running a college lending program that also gets that description?

Yup — it’s the PLUS Loan program and in today’s Martin Center article, Anthony Hennen scrutinizes it.

He writes,

PLUS loans are open to graduate and professional students, as well as parents of undergraduate students. Students and parents can borrow up to the cost of attendance set by the student’s university, minus other aid the student receives. What that means is the federal government imposes no direct borrowing limit. If a school sets tuition higher and higher every year, a PLUS loan will cover the increase.

Participation in this kind of student lending has been rising. Parents are getting sucked in and the ready availability of federal money for grad school is a big factor in continuing the glut of graduate degree holders desperately looking for work to pay the bills.

PLUS loans are another example of counter-productive government policy, Hennen observes:

A great irony of programs like PLUS loans is that those free-flowing federal dollars have made education less affordable, as the Martin Center pointed out in a research review of how federal funding inflates college costs. Universities have shown little interest in keeping down costs so long as federal loans will continue to flow freely, no matter how harmful the effects are to those who use the program and to the national economy as a whole.

So why continue PLUS loans? Politics explains it — this lending program helps to keep some influential schools going, especially HBCUs.

However unlikely, the right move would be to get rid of PLUS loans, Hennen argues. He concludes, “Abolishing PLUS loans would preserve an abundance of money for students while sending college leaders a warning: don’t count on government largesse to subsidize high costs forever.”

The federal government should never have gotten into the financing of education and a good first step toward getting out would be to end this loan program.

George Leef is the the director of editorial content at the James G. Martin Center for Academic Renewal.

Most Popular

U.S.

How to Bend the News

This, from ABC, is a nice example of a news organization deliberately bending the truth in order to advance a narrative that it wishes were true but is not: Venerable gun manufacturer Colt says it will stop producing the AR-15, among other rifles, for the consumer market in the wake of many recent mass ... Read More
Elections

Story Time with David Brooks

His latest column imagines a future in which Elizabeth Warren wins the next presidential election. Warren won convincingly. The Democrats built a bigger majority in the House, and to general surprise, won a slim Senate majority of 52 to 48. After that election, the Republicans suffered a long, steady decline. ... Read More
Art

The Metropolitan Museum of Art Defaces Its Façade

The facade of the Metropolitan Museum of Art, designed by Richard Morris Hunt in 1902, contains four large niches that might display sculpture but have traditionally been left empty. This was prudent good taste on the Met's part, since sculpture on buildings is a tricky business that few artists in our age of ... Read More