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Originally published on Forbes.com on September 20th, 2012

Alan Collinge is the founder of StudentLoanJustice.Org and author of The Student Loan Scam: The Most Oppressive Debt in U.S. History – and How We Can Fight Back (Beacon Press, 2009).He has a bone to pick with the Romney campaign on the issue of student loans. Given that he lived at Zuccotti Park, the center of Occupied ]Wall Stree], for two months last fall, I found it intriguing that Collinge would dare lecture Republicans on conservative ideals.  So, here is the interview:

Q:  So what is your beef with Romney and Ryan on this issue?

A:  A few months ago, I penned a column that asked why Congressman Paul Ryan would, in his budget, call for an accounting change that made the new “Direct” lending system appear more expensive.  Well, that question has been answered with the roll-out of the Romney-Ryan plan for higher education. The plan calls for a shift back to the old style of student lending, where the government doesn’t make the loans directly.  Rather, it only guarantees the loans, made by private banks, like Sallie Mae.

Q:  So, why is this bad, and where does the finger point?

A:  Under the old program, the government paid the banks extra subsidies and lots of them.  This includes interest subsidies while the students were in school, deferment subsidies, guarantor subsidies, and other subsidies that, collectively, made the old program hugely expensive for the taxpayers.  A big-government, spending bonanza if there ever was one.

Make no mistake:  whatever criticisms one may have about the new lending system, being a spending burden on the taxpayer is absolutely not one of them.  To revert to the old system means the government will no longer make interest on the loans, and will also have to begin, again, to pony up the subsidies mentioned above.

Given Ryan’s prior budget maneuver, it appears strongly that credit for the Romney-Ryan plan for higher education goes chiefly to Ryan, not Romney.  So I have to ask:  How on earth can Ryan and Romney say that they are committed to reducing government spending when their plans for higher education scream the opposite?

Q:  What, then,  would a “true conservative” prescribe to address the student loan problem?

A:  The true, conservative move for higher education would be to return standard bankruptcy to all student loans, thereby forcing the government to freeze, or even lower the federal lending ceilings for these loans.  This would quickly, and surely compel a significant decrease in the price that the colleges could charge for their product.  It would also decrease government spending.  It would also show average Americans how the “invisible hand” can actually work for them, instead of against them.

But Ryan and Romney, apparently, are more interested in making money for their banker-buddies inside the beltway than standing up for conservative principles.  They may throw some rhetoric out about free-markets- which has always been a lie for the case of federal student loans-but this sort of talk is as disingenuous now as it ever has been.

Q:  Any final thoughts? Advice for the Republicans perhaps?

A:  The truth is that the Republican party has signed on to a higher education plan that calls for more government spending, not less.  And one that flies in the face of true, conservative principles. It is disgusting.  It is shameless.  It is pathetic. True conservatives across the country had better open up their eyes, and soon, to this and similar tricks being played by Republicans inside the beltway. Forcing Ryan and Romney to rethink their position on this particular issue- before the election- would be a good place to start.

Q: Stop holding back Alan.  Tell me how you really feel.

A: “Where to begin…”

——————-

There is a perennial debate as to whether it is better for “the market” or government to do various things.  The system proposed by the Republicans seems to be the worst of both worlds.  Private interests profit, while the taxpayers bear the risk.  It strikes me as crony capitalism.

You can follow me on twitter @peterreillycpa.