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About Oregon daily emerald. (Eugene, Or.) 1920-2012 | View Entire Issue (April 5, 1995)
EDITORIAL Let direct lending save federal cash For the past year, the University has served as a test ing ground for a new federal student loan system, designed to improve the old lending system by elimi nating costly middle men from the process instead of having students seek out loans from com mercial banks and guarantee agencies, which are in turn guaranteed by the federal government, the new system has students borrowing money directly from the govern ment itself. By removing the banks from the equation, the lend ing process is more streamlined and substantially cheap er, both for the government — whll b no longer has to pay banks for students' defaulted loans — and students who now can choose from a variety of repayment plans, none of which ( barges more than 8.25 pen ent in annual interest. It is about as close to a win-win situation as you’re likely for find coming out of Washington And there ,uc still ■ ntn s Recent congressional efforts to slow down the imple mentation of the now landing system — President Clin ton wants it in all colleges by 1997-68 would limit the number of direct loans to 40 percent of nil new loans, as measured by volume, That would leave the remaining 60 percent of loans to be issued by banks, under the same old costly and inefficient system as before The rationale for this 40 percent cap is shaky if the new system is cheaper than the old system, and easier, what possible reason could there be for blocking it? The banking industry, obviously, can think of a whole lot of reasons The White House predic ts a $12 billion governmental savings through direct lending, and most of that money will come out of banks' profit margins. It’s little surprise, then, that banks are among the most vocal opponents of direct lending. But opposition to the new program has come from some less predictable corners. Some student groups, including tne Oregon Student bobby, have voiced con cern that the repayment plans that accompany the new loans actually i ost students more money in the long run — especially if students choose some of the longer-term arrangements that can delay full repayment as long as 25 years. That argument is true — a 20-yuar loan will always cost more in interest than on equally largo 10-year loan — hut It is not enough to justify opposition to tho pro gram. So long as students are fully informed about the economic implications of each repayment option, then the now system still b*ats the old one. The lobby should concentrate its efforts on seeing that students are so informed, rather than simply describing the program as “robbery.” Direct tending should be allowed to expand to all U.S. campuses. Moneyed interests and fears aside, it's the best way to keep college costs down, without bankrupt ing the federal government. Orvfion Daily Emerald ■I.l i’ K.'J i.’.Tnrr Th* P&ty f i» fx4>- vf'**} .1.*-.• M •- • y-«iaf »VJ T u«»']Ay *f*5 Tbuf Hs3£y ffv» Js^rr.^us* t»y I Qj . Inc . a* £*© lk*nrtJNf*^f d Cfcoporv f Tfv© r«i 6*&\1 opm a!** **><>«*.>«>«’wS**’ | <t> *i4m’"■-?•• & U«*c»' A'Xl ■■’■■ 4 )< ffHI A**v>t ^(5*1 TH* f "Ufrmkj til pfiivdf* pfOptrty Tr%« »«mov# Of tty UNr stay th# *ictvs OMy f'nerafcj l\te*8?v ft* of fNKpws ift jpfQMPutfltM Ednof W» ChMK Katy Soto l ector Editor mM Editor N*w» An E ititof Frt*i»nc« Editor UMMfl inotn ftoftO* tVwfrv*** Icyi ftofenoi*'. N«w» tailor Retw* :i Mm Sport* Editor Ohm K**rt/ Supplement* E<*tor !"V.a^ Night E &\or «r* a Me» ** AllOCiaif Idnort *’■» *'• >'*' •? u. ‘ ^ f r- M.,! P-.-rr'* t .'N*a‘ J* GflJWWMrtiV Co*6An PoMhy. Htph0 fc'dukjWkxv H-W $*JS« ,;ii. V. •'.*»» Cv-W, A, , i. 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Fomas \ On March 29, a series, of rallies was held on col* lege campuses at ross the country Nalurallv. the Universe Iv took part in this activity, the so-called "National l)ay of Cam pus Action Against The 'Con tract On America."' 1 attended our own version, which was under the leadership of the Student Insurgent and the Survival Center and what I saw was extremely disappointing Hook burning (which 1 thought liberals were against), obscenities blared over the loud speaker, rabid accusations of CIA conspiracies in South America, mean-spirited atta< ks on Speaker of the House New t Gingrich in summation, a group of students who seemed to he protesting simply for protesting's sake This is worrisome due to the fail that this issue at hand should not be treated in such a frivolous manner The “( mitrat t With America'’ is dangerous For those of us who are opposed to it. however, we should not allow the debate to be extended toward the heart strings and paranoia of the far left Fighting the contract should he logit al and rational Although the supporters of last week's rally called the con tract a mean spirited attack on fairness and decency." this is not true It is a promotional gim tnu k where main interests, con trary to the rhetoric of the House Republicans, li« with large cor porations and the wealthy The main problem with party line liberal arguments, such as those which 1 heard last week, against the contract is that they are indictments against the GOP and conservatives as a whole. This is wrong. The fight should he against the policies, not the personali ties. of Newt Gingrich, Dit k Armey K-Tex and the rest of the House Republicans Also, we must remember that not all right-winger support the i on tract Many Republican senators (and let's face it. the Senate is the true battleground), have fought the contract in some capacity Our own Mark Hatfield, ( hair man of the Senate Appropria tions Committee, gamed notori ety as the sole GOP vote of dis sension on the balanced budget amendment, which led to its defeat His partner. Bob Pack wood. chairman of the Senate Finance Committee, recently said he would not support any new tax cuts until the deficit is reduced, which the House Republicans are trying to do this week Many loading conservative thinkers have also come out against the contract Robert Bork. who if his nomination was not defeated would have been the most conservative man to ever sit on the Supreme Court, fought the balanced budget amendment because he felt that it was unconstitutional. Herbert Stein, who was Richard Nison's chief et onom ii advisor, eloquently discussed the negative aspects of the con trac t in a recent issue of The Sew Republic The Concord Coalition, which is led bv the conservative's con servative. former Sen. Warren Rudman R N H . dismissed the budgetary provision* of the con tract as trickery meant to satisfv public opinion rather than solve the nation's problems Unlike Bork. Stein. Rod matin. Secretary of Labor Rolwrt Reich and many other intellec tuals. the arguments presented here last week were not based upon objective facts They were mean, obnoxious, and the truth was skewed for the sake of argu ment This should seem Strangely reminiscent, because it was almost exactly the type of debat mg which the House Kepuhli cans have used to bolster their contract in the first place. Those of us who are against the i ontrnct should rise above the bickering which we suppos edly despise. As a contrast to the new form of foammg-at-the mouth political discourse, we should hold ourselves to the highest standards possible There is no need for us to yell and scream, for the facts are on our side. For example, the balanced budget amendment, which Gin grich and his colleagues have given the catchy name, the "Fis cal Responsibility Act," really doesn't balance the budget at all Page 32 of the contract states that the amendment would "require that total outlays for any fiscal year do not exceed total receipt* for that year " Sim ply put, the government i annot spend more than it takes in. Then, on the same page, the cen tral t states that "the resolution defines receipts as all rtn eipts except those derived from bor rowing, and outlays as all out lays except principal payments on the debt." I'll ink about it If you were balancing your own budget, and you had a problem borrowing too much money (as our govern ment does) wouldn't your task be easier if you simply did not include the money which you run up on your credit cards as income, and then excluded the principal payments as an expense? This amendment is a |ok«, not a solution Instances sui h as this in< widespread through the docu ment, and this is what should be fought No more st reaming, no more misinterpretation. If the American people are given the fails which they deserve, in a manner which is in their inter est, Republican and Democrat, conservative and liberal, they will all understand the negative implications of the "Contract With America " Primo A / Fontana is a colum rust for thf Emerald.
