Redstate

Posted at 1:02am on May 4, 2008 Higher Education, Affirmative Action And The Sword Of Damocles in The Hands Of The ABA

By Pejman Yousefzadeh

Much has been made of the adherence maintained by a number of higher education institutions towards the policy of affirmative action. What hasn't been discussed at length is the fact that this adherence comes largely from the need of higher education institutions to bow and scrape before agencies that have the power to deny accreditation to institutions that do not toe the line regarding affirmative action.

Via Southern Appeal comes this editorial by Professor Gail Heriot (who is well known to people who read The Right Coast), which outlines the degree to which higher education institutions must bow and scrape when it comes to the issue of affirmative action. The need to bow and scrape very nearly got George Mason University School of Law in trouble with the American Bar Association.

Read on . . .

Posted in Culture | Education Policy — Comments (1)/ Email this page » / Read More »

Posted at 4:34pm on Apr. 18, 2008 Please Stop Helping

By Pejman Yousefzadeh

From today's Wall Street Journal Political Diary (subscription required), comes the latest example of how government assistance is no assistance at all, courtesy of Brendan Miniter. As people will recall, upon taking control of Congress, the Democrats promised to make college "more affordable" and passed laws to cap interest rates to do so.

The result of all this do-goodism?

By one count, some four-dozen student lenders have either curtailed loans to students in recent months or closed up shop entirely. Sallie Mae, the biggest, rolled out its Chief Executive Al Lord yesterday to warn of a "train wreck" in the $85 billion student loan market without a federal bailout.

The broader credit crunch is certainly playing a role, but Mr. Lord laid most of the blame on a Democrat-sponsored law that took effect in October. As part of her "First 100 Hours" agenda, Ms. Pelosi and Co. slashed interest rates banks can charge students in half to 3.4%, leaving Uncle Sam to make up the difference. Democrats also pushed through cuts to the fees the federal government pays to banks for underwriting student loans. "It's not even a matter of break-even. [The lenders] lose money on these loans if they originate them," one financial analyst told Dow Jones Newswires last month.

The Federal Family Education Loan Program likes to boast that it's now the dominant source of college loan funding, making "it possible for borrowers with no income, credit history, cosigner or collateral to get student loans at low interest rates." Talk about subprime. All this federal money is also a substantial reason for the rapid inflation in tuition costs. Every Congressionally-created problem must have a Congressional solution. Pelosi ally Rep. Mike Miller, chairman of the House Education and Workforce Committee, is now pushing legislation through that will both lift the cap on federally subsidized student loans and expand Uncle Sam's direct loan program -- completing Washington's takeover of the business and no doubt setting the stage for bigger meltdowns ahead.

Congress has succeeded in making the student loan business less profitable. It did not think about the consequences of this, of course, but it should now see--if there is any wit on Capitol Hill--that when you make a business less profitable via government fiat, you decrease the incentives for that business to continue in its previous robust fashion--if at all.

Et voilà, that is precisely what we are seeing. Student loan lenders can't make as much of a profit thanks to the caps on the interest rates they charge. As a result--especially given the current credit crunch--they are scaling back their activities or cutting out of the student loan business altogether. And this only serves to harm students.

Nice work, Congress. What do you do for an encore? Have Speaker Pelosi start brush fires in California?

Posted in Education Policy | I'm From The Government And I Am Here To Help | Policy | Student Loans — Comments (4)/ Email this page » / Read More »

Posted at 2:35am on Oct. 30, 2007 In Praise Of School Vouchers

By Pejman Yousefzadeh

Megan. McArdle. Rocks.