"Does Michele Bachmann Think Private Student Loans Are Illegal?"
Five of the 2012 GOP presidential hopefuls, including Rep. Michele Bachmann (R-MN), appeared at an Americans for Prosperity-sponsored forum Friday night, in a bid to win favor in that early primary state. For her speech, Bachmann read off a wish list of conservative goals that she claims she put together before the 2010 election. “I want to read to you what I wrote down about what we could do” if the GOP took back both house of Congress, she said.
But amidst the usual conservative laundry-list of tax cuts, oil drilling, and deregulation, Bachmann revealed her ignorance regarding higher education by proposing this item:
Uncle Sam would then legalize private student lending — imagine that! — and end the federal government’s involvement.
Of course, private student loans are perfectly legal today. Here’s where you can get one from PNC. Here’s Chase’s program. If those don’t work, here’s Citigroup’s program. About $10 billion in private student loans are originated each year.
Bachmann has likely been perplexed by the student loan reform passed in 2009, which cut private student lenders out of the federal loan program. Under the old system, private lenders were receiving taxpayer subsidies to originate federal student loans, acting as middlemen between students and the Department of Education. It was corporate welfare of the worst kind, since the private lenders received free money to do something that the Education Department did anyway, while taxpayers bore all the risk of students defaulting on those loans.
Plenty of Republicans have said that they would reverse that reform, and once again hand corporations taxpayer dollars to run a federal program. But no one has been more confused as to that law’s implications than Bachmann, who seems to be operating under the delusion that it ended the private student loan industry entirely. Of course, claiming that private student loans are illegal fits right in with her pattern of wild spin, double-speak, and outright lies.