Privatization, "Big Government," and Student Loans: A Cautionary Tale

[Sikander]

Originally posted by Ted Striker
Privitization is not the panacea that the reactionaries make it out to be. In many cases it has made things much more worse or expensive.

Some big government programs work, and work really well.

It's like anything, they can be either good or bad.

Just because something is "privatized" doesn't mean that it is well contemplated, or anything more than a kickback scheme for that matter. California's "privatized" energy system is an excellent case in point, system so poorly designed that failure was a foregone conclusion. Even a privatized system must be designed to take advantage of the things that the private sector does well, just as government systems must take advantage of government economies. The best of all worlds is when systems are designed so that their subsystems are parceled out to whichever system fits them best. This requires a lot of intelligent and honest management, and at least the oversight must come from the government.

[Dinner]

The solution to our nation's shortage of engineers and other high value degrees is easy. Everyone who majors in designated high value fields gets 100% free tuition while people who choose to major in low value fields (dance, sociology, what ever) end up with little financial aid. Students will chase the money.

[axi]

You could simply pay your engineers more money.

[Ramo]

Or put greater emphasis on math and science earlier on. See the Magnet programs.

[Sikander]

I was afraid that the magnet program would erase my hard drive.

[Ramo]

Dude....

[chequita guevara]

Originally posted by Boshko
Aaaaaah, that explains why the private student loan companies offered me such insanely low interest rates (just over 2%) if I refinanced my government loans to their private loans.

IIRC, those are not government subsidized.

[Dinner]

Originally posted by axi
You could simply pay your engineers more money.

We already pay the top in the world which is why we're sucking in huge numbers of engineers from Europe and Asia. I would like to see citizens encouraged to do those but right now they can take finger painting as a major and get the same student aid as a major the economy wants.

[chequita guevara]

The reason for the difference is: when a private bank hold your student loan, the government is paying your interest. When the government holds your loan, no interest is being paid at all. The same when you have a deferrment.

[Ramo]

Totally disagree. Universities should be about intellectual curiousity, not grinding out cogs for the economy.

That said, universities ought to axe some of their more rediculous degree plans.

[chequita guevara]

Originally posted by axi
You could simply pay your engineers more money.

We pay our engineers lots, as Oerdin notes. The problem is, we don't stress math and science enough in school or make it interesting to kids.

[Dinner]

Originally posted by chegitz guevara
The reason for the difference is: when a private bank hold your student loan, the government is paying your interest. When the government holds your loan, no interest is being paid at all. The same when you have a deferrment.

That sounds almost the same as Bush's motivation to privatize social security.

[chequita guevara]

Yeah, like we need to be giving money away to banks for no reason. Not only do the banks get guaranteed interest payments, but the get artificially high rates, too (right now, anyway). That's only because our interest rates are so low at the moment, and student loan rates are set by law. In addition, you cannot declare bankruptcy on a student loan. If you default, they start taking it out of your tax refunds.

[GePap]

Re :engineers

We need more vocational schools, and new institutions designed to teach engineering and such exclusively. If you want to give them extra money, fine, but the idea of cutting money form other fields is absurd. Heck, if we all did direct loans instead of the subsidized, the billions in savings could be passed along to engineering pet projects.