Massive federal takeover of higher education is one of the “fixers” being added to Obamacare!

Peter Wood of the National Association of Scholars writes:

Dear Larry:

Obama-Care as you rightly point out is a life and death issue. That means that the efforts to pass it necessarily overshadow everything else. The Democrats, knowing that, are using the “reconciliation” as cover to pass some other dubious and politically unpopular legislation. They are stuffing Obama’s takeover of higher education into it as well. What Obama Care is to medicine, Obama Loans are to college. They will consolidate federal control of higher education finance in the Department of Education. Obama wants this as part of his plan to double college enrollments by 2020 (from 18 million to 36 million) and make the United States the nation with the largest percentage of college-degreed citizens in the world. Right now, the nation that holds that enviable position is Russia, with 55 percent. This level of higher education has made Russia the powerhouse of innovation and productivity we see today, hasn’t it? Why would it work out any differently for us? Contrary to Obama’s promises, showering the country in empty credentials awarded to tens of millions of young people who have neither the talent nor the motivation to succeed at a real college education won’t improve the economy. It will, however, create a huge cohort of government clients.

That’s how the Obama loans (called “Direct Lending”) come into it. Anyone who wishes to attend college and needs to borrow money to do so will have only one choice: borrow from the Department of Education. DOE will choose who gets the loans, how much, and under what terms. Voila! The great majority of college students are instantly long-term government clients who will spend the first decades of their working lives paying down their debt to Obama Loans.

The new program also locks into place the position of the federal government as chief patron to almost all colleges and universities except the super-rich (e.g. Harvard, Yale, Princeton) and the handful of scrappy we-take-no-government –funds exceptions (e.g. Hillsdale and Grove City). Anyone who thinks the government will not make use of this leverage to impose its own priorities on what is taught, who teaches, and how colleges manage themselves, must not have heard of Title IX, the DOE Office of Civil Rights, and the host of previous infringements on the academy that grew up under the much weaker federally-guaranteed student loans program.

This development has come up so suddenly—just last week!—that few people outside higher education have awoken to the danger. What danger would that be? Just as Obama-Care threatens to destroy high quality health care in America by reducing medical services to sub-mediocrity for all but the elite, Obama-Ed threatens to destroy higher education by making it the intellectual equivalent of today’s high schools. College for everyone regardless of ability is college for no one.

Part of the Obama Loan program is to take the “savings” (currently estimated at $67 billion over 11 years) from eliminating fees to private lenders and recycle the money as grants to low-income students and favored colleges. So the government program will have the additional angle of forcing the students who borrow from the government to pay for the education of others who will be spared the borrowing.

I have written about this twice: “Obama-Care Meets Obama-Ed” and “Obama Loans, Who Collects?

LA replies:

Dear Peter,

I haven’t yet gotten into this side of Obamacare, and the main reason is, I can’t make sense of it. With the tremendous difficulties the Democrats have in adding changes to the legislation that are related to the legislation, HOW and WHY would they add a completely unrelated bill to the legislation? Are you saying that among the “fixers” that they intend to add to the Senate bill in the House is this education bill? How by any stretch of the imagination could a completely new bill be passed by reconciliation? As it is, they have to be very careful only to include in the “fixer” bill those items that can pass by reconciliation lest the Senate Republicans challenge the item.

Peter Wood replies:

I can’t offer a very good explanation of HOW the Democrats expect to pull this off, but WHY is pretty clear:

1. They don’t have the votes to pass Direct Lending over strong opposition from Republicans and some Democrats.

2. The arcane “rules” of reconciliation allow only one reconciliation bill per year. So to sneak this past the opposition, they really have no choice but to combine it with Obama Care.

3. Some Democrats calculate that Direct Lending will actually improve the chances of passing Obama Care, since Direct Lending has been scored by the Congressional Budget Office as “saving” $67 billion over 11 years. The money would be no sooner “saved” than squandered on other Obama programs, but it looks better to moderates to be able to say they “saved” something.

4. This is really their best chance at advancing Obama’s takeover of higher education. Direct Lending finances all his other education moves.

As to the HOW—the answer I guess is that this is a pure power play. The Democrats are seizing power from the American people with the health care bill. Why stop there? I don’t see that the Democratic leadership is any way concerned about Republican challenges. This is pretty much a coup against the rule of law.

LA replies:

Thank you so much for your further explanation. As I said, the reason I had not taken in this story before, though I had seen articles on it, was that it made no sense to me. Now it makes sense.

This is almost as great a revolution as Obamacare, and it’s just sneaking through.

Posted by Lawrence Auster at March 16, 2010 02:56 PM | Send

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