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Wednesday, December 04, 2019

Betsy DeVos Suggests Federal Student Aid Should Be A ‘Standalone’ Entity

U.S. Secretary of Education Betsy DeVos delivered prepared remarks at a training conference for Federal Student Aid (FSA). FSA, bureaucratically housed within the U.S. Department of Education (DOE), is the office responsible for doling out “more than $120 billion a year in grants, work-study funds, and low-interest loans to approximately 13 million students,” according to the DOE’s website. According to the site, more than 21 million students last year applied for federal student aid in some form. FSA dates back to 1965, when its mission was established by the Higher Education Act.

DeVos suggested that FSA be bureaucratically restructured as a “standalone government corporation”:

"One has to wonder: Why isn’t FSA a standalone government corporation, run by a professional, expert, and apolitical Board of Governors?"

Structural reform at the FSA — and re-evaluating how the federal government entangles itself in the student loan enterprise, more generally — ought to be music to the ears of conservatives.

Conservatives routinely assail the perverse incentive structures that lead many quixotic teens to take out large-scale loans en route to all-too predictable and ubiquitous leftist indoctrination on the university campus. Here is how Inez Feltscher Stepman articulated the sentiment earlier this year for the Claremont Institute’s American Mind site:

"William F. Buckley wrote God and Man at Yale seven decades ago. Yet the university system still enjoys full public financial backing as though it had not degenerated from the elevated institution of yesteryear into an archipelago of training camps for Leftist activism. Whether Democrats or Republicans are in charge, Congress continues to increase its student loan investments, the lifeblood that has enabled insane cost increases well above inflation rates, as well as billions in direct grants to universities. …"

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6 comments:

Anonymous said...

The reason college costs so much is because of student aid. You can only charge what people are willing to pay. So, give people money for college and the costs go up and never mind their inability to pay it back later,.

Anonymous said...

Obama had eight years to fix it but only made it worse.

Anonymous said...


That's the point, 1:33. The more the government gets involved, the worse it gets. Universities see it as a big pot of gold, and that 'somebody' will bail these students out.

Anonymous said...

Let's see. There was Sally Mae, then Fannie Mae, what's this going to be called Sammie Mae? Nobody pays the government back. A bank will try everything to get their loan money back. The government will just decide who has to pay it back, and who doesn't, based on race, ethnicity, economical background, etc. White students will have to foot the default loans, while the minority loans will be "forgiven" when they don't pay them off. Nah, just let the banks keep on hounding the graduates that borrowed all that money.

Anonymous said...



A friend told me the other day about somebody who recently finished school to be an orthodontist.

She said he has just over 1 million in student loan debt.

I can't imagine someone would be that dumb.

Anonymous said...


Let's come back to the baseline question: Should the government be involved in post-secondary education, and if so, to what extent?

It's immediately evident that the ability to borrow a large sum of money with collateral consisting of a possible sheepskin and uncertain employment prospects is dubious at best. Left to market forces, engineering students would probably find it easier to borrow than 'studies' majors because they'd be more likely to find a job that would enable them to repay the loan.

The various loan programs serve to insulate the colleges from cost issues. They can raise tuition safe in the knowledge that Johnny or Susie can borrow the increased fees.

If Johnny or Susie had to come up with most of the cost from their resources, or family, colleges would need to really sharpen their pencils to provide the best value possible in the way of education provided for dollar spent. That is generally not the case today.

We used to provide a subsidy, up to a point, to a loan from a bank for educational expenses. Back in the day I used a modest loan for the final year of my undergraduate studies but had earned the rest of my tuition. Down the road graduate studies were paid from earnings and savings.

Reform is badly needed so that qualified and deserving students can pursue useful and meaningful studies that leave them with active career prospects.