Despite the well-established link between an educated citizenry and a thriving democracy, very little priority is given to expanding access to education in this country.  Massive increases in the cost of higher education in the United States have put thousands of students in extraordinary debt, and left thousands of others without access to educational opportunities.  The student loan reform measures passed by the Obama Administration mark an important step in reversing this dangerous trend.

For decades, big banks and private lenders have dominated the student loan industry. To create incentive for banks to provide affordable loans to students, the government guaranteed the loans and provided massive subsidies for the lenders. This policy has allowed banks to function as middlemen, extracting massive profits while the government absorbs all the risk.  The result is a massive bill to taxpayers and students.

With Obama’s student loan reforms, big banks are removed from the equation.  Instead of guaranteeing and subsidizing loans through a third party, the government will simply loan directly to students, cutting out the middleman and, according to the Congressional Budget Office, saving tens of billions of dollars.  These savings will then be invested in the Pell Grant program—providing greater access to higher education for low-income students. The reforms also cap annual student-loan repayments at 10 percent of income, allowing graduates to overcome the incredible burden of debt.  Community colleges and minority-serving colleges also receive renewed investment.

Predictably, Republicans have spun student loan reform as a “government take-over.”  This is a strange claim considering the fact that the government has been subsidizing and guaranteeing loans for years.  The GOP is controlled by a rigid anti-government ideology incompatible with this pragmatic set of reforms.  Unfortunately, their opposition has stood in the way of these measures for decades, leaving countless young Americans to be crushed by inescapable debt.  They must move past their dogmatic beliefs and join Democrats in a commitment to pragmatic education reform as a national priority.

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