The Rice Thresher (Houston, Tex.), Vol. 81, No. 3, Ed. 1 Friday, September 3, 1993 Page: 5 of 16
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OPINION
THE RICE THRESHER FRIDAY, SEPTEMBER 3. 1993 5
Loan program promotes inefficiency
Vivek
Rao
Beginning in the 1994-95 school
year, college students will no longer
have to deal with the frustration in-
volved in obtaining student loans, ac-
cording to the Clinton "more govern-
ment is good government" Adminis-
tration.
The new federal student loan pro-
gram, which became law in August, is
hailed by many in Washington as a
Editors
Notes I
money-saver for students as well as
the government. Given the federal
government's dismal track record in
its handling of taxpayer money, how-
ever, this plan will probably do little
more than replace the shortcomings
of the old system with new deficien-
cies.
The federal loan program currently
in place has ban ks act as agents for the
government In exchange for provid-
ing student loans, banks receive inter-
est on the loan as well as compensa-
tion in the event that a student de-
faults on the loan—both provided cour-
tesy of the average citizen's wallet
The new plan .which will be phased
in over five years, hopes to eliminate
the "middle agents" and save billions
of dollars that would otherwise be
earned by the banks as interest. Stu-
dents would also benefit in that they
would no longer have to brave inter-
views with bank employees; instead,-
they would only need to make a short
trek to their educational institution's
financial aid office.
Additionally, students would pay
less ^n interest, thanks to the
government's feigned desire to help
students instead of making a profit
The new program will also provide
graduates who have financial difficul-
ties more time to repay their debts.
These changes should enable every-
one to benefit
In the world of Washington, how-
ever, reality and theory are rarely in
agreement The creators of this plan
may have had good intentions, but
these changes in the student loan pro-
gram can lead to only one of three
things—inefficiency, inefficiency, or
inefficiency.
How often have government esti-
mates of the savings that would result
from federal intervention been proven
correct?Truc, theTrcasury would save
considerably by not paying banks in-
terest. But government organizations
lack the efficiency of private busi-
nesses— businesses that do almost
everything they can to control costs.
This aspect of the private sector has
always been bad news for employees
that fail to do their jobs quickly and
accurately, butcustomers have almost
invariably benefited from prompt ser-
vice and low prices.
With government, those in charge
are more concerned with rewarding
loyal supporters than searching for
people who are most qualified. Since
their salaries are in no way affected by
how much agencies spend, there is
little incentive to strive to achieve and
maintain a high level of productivity.
As a result, the new program will cost
Americans more than it will save.
Additionally, students will find the
new loan program less "user-friendly,"
notmore.Thosewhodoubtthisshould
have a conversation with members of
theClassof "97 who have been awarded
federal scholarships.
Due to unforeseen difficulties (a
result of the confusion that accompa-
nies the arrival of a new Administra-
tion in Washington), many scholar-
ship applicants were forced to wait
months to learn if they had been
chosen.
Even worse, most had no knowl-
edge of the delay, and many mistak-
enly assumed that their applications
had been rejected.
For instance, those who were cho-
sen National Science Scholars by the
U.S. Department of Education re-
ceived no notification until five months
after the promised reply date. Addi-
tionally, the value of the award was
less than the estimate, another ex-
ample of the unpredictability of gov-
ernment
The new federal student loan pro-
gram is the result of calls for change,
butitisachange for the worse. If only
"governmental inefficiency" were an
oxymoron, things would be different
But separating the two words seems
as difficult as paying off the federal
debt by 19% —a possibility, but one
that is virtually unattainable as long as
Congress is unwilling to make sacri-
fices in their own districts.
Until we create that Utopia, wo can
do little more than hope that the new
student loan program will not be as
disastrous as some of Big Brother's
other attempts to help the "common
folk."
Vivek Rao is a Baker College freshman
and the Assistant Opinion Editor.
Politics
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Physics conflict not forseen
FROM PAGE 2
the political system, as worth nothing.
If anything, such comments show the
contempt for Middle America which
has constituted much of left-wing po-
litical discourse in contemporary his-
tory. President Clinton, in his rhetoric
at least, tried the pull the Democrats
away from such elitism in 1992. Ifsuch
an attitude of condescension returns
to the fore in Democratic circles, the
party's fortunes will only suffer. If
that's the case, the anti-Clinton vote
will only grow, as will our populist
movement Keep on talking, Joe.
You're only helping us.
At any rate, thanks to the Thresher
for helping stir interest in our group,
and we encourage all interested stu-
dents and faculty to come by and tike
part in our activities.
David Rhodes
Mark R. Yzaguirre
Co-Founders,
Rice Chapter
I^ead or Ijeave/
United We Stand America
To the editor:
It has come to my attention that the
Physics Dcpartmentis being criticized
for their attempt to move PHYS 101 to
Monday-Wednsday-Friday. They in
fact made this change last spring with
the knowledge of their dean and my
office. It raised no flag at the time
because they had offered that course
on that schedule several years ago. It
was not noticed until recently that it
would give students enrolled in the
"bigthree"and HUMA101 four MWF
classes. The department continues to
believe that the course is better taugh t
MWF, but when the schedule prob-
lem Wiis discovered .they volunteered
to revert to Tuesday-Thursday for this
semester.
The administration is studying
ways to prevent this sort of disruption
in the future.
James Williamson
Registrar
Are You
Whether you are or not, we want
you!
Write for the Opinion section.
Join the Opinion staff meeting Fridays at noon
in the Sid commons.
For more information, contact David Hale
at the Rice Thresher.
527-4802. -
Do it. You'll be cool.
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Howley, Peter & Epperson, Kraettli. The Rice Thresher (Houston, Tex.), Vol. 81, No. 3, Ed. 1 Friday, September 3, 1993, newspaper, September 3, 1993; Houston, Texas. (https://texashistory.unt.edu/ark:/67531/metapth245845/m1/5/?rotate=90: accessed July 18, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting Rice University Woodson Research Center.