Despite Historic Pell Grant Demand, Kline Defends Needlessly Subsidizing Private Loan Companies

Rep. John Kline (R-MN)

Rep. John Kline (R-MN)

Yesterday, the Office of Management and Budget released an updated version of its ten-year deficit projections, which upped the cost estimate for the administration’s reformed Pell Grant program by $27 billion over ten years.

The OMB reported that the increase “is driven almost entirely by technical revisions to reflect historic increases in the demand for Pell Grants as more individuals choose to go to college in a weakened labor market.” But that didn’t stop Rep. John Kline (R-MN), the ranking member on the House Education and Labor committee, from criticizing the administration for being fiscally irresponsible in its proposals for student loan reform:

The deficit is soaring, a substantial portion of the so-called savings in [the administration’s loan reform] may never materialize, and now we learn it will spend billions more than expected…The more we learn about this bill, the more obvious it becomes that there is nothing ‘fiscally responsible’ about it. These new figures are yet another reason Democrats should slow down and consider the consequences of the plan they’re recklessly rushing through Congress.

Is Kline blaming the administration for more people wanting to go to college than it anticipated? That seems like something we’d want to encourage instead of criticize. But this response is in line with the rest of Kline’s awful record in terms of doing what’s best for students.

The administration has proposed changes to the Pell Grant program that would expand the grant pool and ensure that the grants automatically increase to keep up with inflation, as opposed to requiring Congress to constantly adjust when the grants decline in value. In order to pay for this, the administration wants to end the practice of subsidizing private loan companies to originate and service loans.

Meanwhile, Kline’s response to historic grant demand (and the undeniable need to increase America’s level of educational attainment) is to defend the federal government unnecessarily subsidizing ostensibly private companies to the tune of $87 billion over ten years.

Republicans have already conceded that the proposed student loan reforms save money, yet they keep defending the status quo, out of some sense that “a government program is somehow less socialistic when business is allowed to take a huge cut.” Given that demand is higher than ever, it’s time to stop pretending that private providers are anything but middlemen, taking money that would be better spent on students.