The Health Care and Education Reconciliation Act of 2010 with its rider,the “Student Aid and Fiscal Responsibility Act” claim that government savings of nearly $20 billion would be recognized by the passage.

Whether government should be primarily involved in overseeing more than 80%-100% of educational loans depemds on your personal outlook and study of American history of education since its early days.

If society as a whole believes that a well-educated public will increase the economic status of the country, students should not have to incur debt for education. They should rather receive non-recourse outright grants, depending only on maintaining passing grades and adhering to the rules of the institution they choose to attend.

Since there would be no loans involved, but only personal incentive to develop their brains and ancillary skills, students should be highly motivated to meet the guidelines for personal success, whether as a would-be mechanic or scientist!

There would have to some adjustments in American society’s thinking, however.

Consider, for example. instead of giving a student a Pell Grant in full at the beginning of a school year, students should receive their funds in stages (monthly?) based on performance accomplished.

If a student stops his or her education voluntarily, the grant wpuld simply stop if not in attendance at the college.

That would tend to pevent individuals from using their education funds to subsidize their personal living habits. It should stop the overcrowding of classrooms at the beginning of a semester, simply to find a thirty percent decrease in enrolment a few weeks later!

Similarly, higher standards of admission should be demanded of entering students, whether at two-year or four year public colleges.

Of course, the various levels of government bureaucracies insist on “equality” without setting any minimum standards, especially at “open ernollment” junior colleges.

Private colleges, of course, should be able to decide entirely on their own standards, not subject to a federal bureaucracy.

Unfortunately, for too many students, attendance at college, whether two or four year, public or private, has come to mean solely learning for a potential paycheck. instead of seeking knowledge.

The “knowledge” offered by the present higher education system makes it fairly clear that “free enterprise capitalism” does not effectively mix well with a paternalistic state!

If Sallie accepts more of my money, via taxes, what’s in it for me? will they lower my interest rate, implement amnesty by rolling back my principal to the original amout? I doubt it.

The root cause of this issue is the cost of education, how can it be so high???

Employers shouldn’t value a degree so much, that may drop the cost of college — seriously, i’ve worked in several major US Cities (NYC, Columbus, Austin) and the kids that come out of school today (except for the truly smart ones) are not well educated.

As department head, I learned quickly that a good thirty percent of my enrolled students at the beginning of a semester dropped classes as soon as they had received their government guaranteed student loan or grant funds. Few ever returned, using the funds as a form of “redistribution” to support themselves or their families instead of using them for the education for which they were intended.

As with the mortgage crisis, blame rests on all the participants, from Main Street to Wall Street!

The student loan industry will be the next big bail out – and like the mortgage bail out, it is AVOIDABLE, and is being created by the same forces that created the home loan crisis.

That is, Congress’s failure and neglect to provide the REQUIRED oversight, to the industry.

Congress knew as far back as 1975 that things in the student loan industry were messed up. They even knew of a group of students who were VICTIMS of trade schools, who would never be able to pay off their debts. YET this same congress never offered any relief from that crushing debt. – instead they removed all consumer protections from student loans. The only loan exempt from bankruptcy protection.

WE the people at Student loan justice, spent the last 4 months in email creating the 27 item call for student loan reform found on the VOPTSSLF blog. WE also have another blog showing a historical timeline of Higher Education and student loan companies activities, as well as some media published articles.

There is a solution to this fiasco.. but it will mean the banksters (some fat cats) won’t get as big a piece of pie as they want.

Its either that, or the taxpayers will suffer.

Guess with this congress, it means taxpayers suffering.